**Exhibit 99.3**

 

**MILLER ANDLENTS, LTD.**

 

**INTERNATIONALOIL AND GAS CONSULTANTS**

 

**TWENTY-SEVENTHFLOOR**

 

**1100LOUISIANA**

 

**HOUSTON,TEXAS 77002-5216**

 

**TELEPHONE713-651-9455**

 

**TELEFAX713-654-9914**

 

**e-mail:mail@millerandlents.com**

 

January 18, 2006

 

POGO Producing Company

5 Greenway Plaza, Suite 2700

Houston, Texas  77046-0504

 
|   | Re:    | Reserves and Future Net Revenues |
|--------|--------|----------------------------------|
|   |   | As of December 31, 2005     |
|   |   | SEC Price Case                   |

 

Gentlemen:

 

At your request, we reviewed the estimates ofproved reserves of oil, natural gas liquids, and gas and the future netrevenues associated with these reserves that POGO Producing Company (POGO)attributes to its net interests in oil and gas properties located in Louisiana,Texas, and Wyoming as of December 31, 2005. POGO’s estimates, shown below,are in accordance with the definitions contained in Securities and ExchangeCommission Regulation S-X, Rule 4-10(a) as shown in the Appendix.

 

# **Reserves and Future Net Revenues as of December 31, 2005**

 
| ** **                 | ** ** | **Proved**    | ** ** |
|----------------------------|------------|---------------|------------|
| ** **                 | ** ** | **Developed** | ** ** | ** ** | ** ** | **Total** | ** ** |
| ** **                 | ** ** | **Producing** | ** ** | **Nonproducing** | ** ** | **Undeveloped** | ** ** | **Proved** | ** ** |
|                       |       |          |       |   |   |   |   |   |   |
| **Net Remaining Reserves** | ** ** | ** **    | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Oil/Condensate,  MBbls.    |       | 4,339.8       |       | 780.3 |   | 25.3 |   | 5,145.4 |   |
| Plant  Products, MBbls.    |       | 219.2         |       | 36.4 |   | 0.0 |   | 255.6 |   |
| Gas, MMcf                  |       | 403,638.0     |       | 35,240.0 |   | 102,842.0 |   | 541,720.0 |   |
|                       |       |          |       |   |   |   |   |   |   |
| **Future Net Revenues**    |       |          |       |   |   |   |   |   |   |
| Undiscounted,  M$          |       | 2,440,617.8   |       | 264,650.0 |   | 474,346.7 |   | 3,179,614.5 |   |
| Discounted @  10%, M$      |       | 1,192,068.4   |       | 135,283.4 |   | 222,792.1 |   | 1,550,143.9 |   |

 

We made independent estimates of 91 percentof the proved reserves estimated by POGO. We ranked and selected, forindependent estimates and review, those properties with the largest reserve

 

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present value. Based on our investigations and subject to thelimitations described hereinafter, it is our judgment that (1) POGO has aneffective system for gathering data and documenting information required toestimate its proved reserves and to project its future net revenues, (2) inmaking its estimates and projections, POGO used appropriate engineering,geologic, and evaluation principles and techniques that are in accordance withpractices generally accepted in the petroleum industry, and (3) theresults of those estimates and projections are, in the aggregate, reasonable.

 

All reserves discussed herein are locatedwithin the Continental United States. Gas volumes were estimated at theappropriate pressure base and temperature base that are established for eachwell or field by the applicable sales contract or regulatory body. Total gasreserves were obtained by summing the reserves for all the individualproperties and are therefore stated herein at a mixed pressure base.

 

POGO represents that the future net revenues reported herein werecomputed based on prices being received for oil, natural gas liquids, and gasas of December 31, 2005 and are in accordance with Securities and ExchangeCommission Regulation S-X, Rule 4-10(a). The present value of future netrevenues was computed by discounting monthly the future net revenues at 10percent per annum. Estimates of future net revenues and the present value offuture net revenues are not intended and should not be interpreted to representfair market values for the estimated reserves.

 

Reserve estimates were based on decline curveextrapolations, material balance calculations, volumetric calculations,analogies, or combinations of these methods for each well, reservoir, or field.Reserve estimates from volumetric calculations and from analogies are oftenless certain than reserve estimates based on well performance obtained over aperiod during which a substantial portion of the reserves were produced.

 

In making its projections, POGO estimatedwell abandonment costs for certain fields, except where salvage values wereassumed to offset these expenses. Future costs, if any, for restoration ofproducing properties to satisfy environmental standards were not deducted fromfuture revenues as such estimates are beyond the scope of this assignment. POGO’sestimates include adjustments for gas balancing.

 

The evaluations presented in this report,with the exceptions of those parameters specified by others, reflect ourinformed judgments based on accepted standards of professional investigationbut are subject to those generally recognized uncertainties associated withinterpretation of geological, geophysical, and engineering information. Governmentpolicies and market conditions different from those employed in this study may causethe total quantity of oil, natural gas liquids, or gas to be recovered, actualproduction rates, prices received, or operating and capital costs to vary fromthose presented in this report.

 

In conducting these evaluations, we reliedupon production histories; accounting and cost data; and other financial,operating, engineering, and geological data supplied by POGO. To a lesserextent, nonproprietary data existing in the files of Miller and Lents, Ltd.,and data obtained from commercial

 

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services were used. We also relied, without independent verification,upon POGO’s representation of its ownership interests, payout balances, reversionaryinterests, the current prices, and the transportation fees applicable to eachproperty.

 

Miller and Lents, Ltd. is an independent oiland gas consulting firm. None of the principals of this firm have any financialinterests in POGO or in any of its affiliated companies. Our fee is notcontingent upon the results of our work or report, and we have not performedother services for POGO that would affect our objectivity. The investigationsreported herein were supervised by an official of the firm who is a qualified,licensed Professional Engineer in the State of Texas with more than 20 years ofrelevant experience in the estimation, assessment, and evaluation of oil andgas reserves.

 

 
|   | Very truly yours,      |
|--------|------------------------|
|   |                   |
|   | MILLER AND LENTS, LTD. |
|   |                   |
|   |                   |
|   | By                     |  /s/  Carl D. Richard |
|   |                   |   Carl D. Richard |
|   |                   |   Senior Vice President |
|   |                   |
|   |                   |
|   | By                     |  /s/  R. W. Frazier |
|   |                   |   R. W. Frazier |
|   |                   |   Senior Vice President |

 

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**Appendix**

 

**ProvedReserves Definitions**

**In AccordanceWith**

**Securitiesand Exchange Commission Regulation S-X**

** **

**Proved Oil and Gas Reserves**

 

Proved oil and gas reserves are the estimatedquantities of crude oil, natural gas, and natural gas liquids which geologicaland engineering data demonstrate with reasonable certainty to be recoverable infuture years from known reservoirs under existing economic and operatingconditions. i.e., prices and costs as of the date the estimate is made. Pricesinclude consideration of changes in existing prices provided only bycontractual arrangements but not on escalations based upon future conditions.

 

1.                                       Reservoirsare considered proved if economic producibility is supported by either actualproduction or conclusive formation test. The area of a reservoir consideredproved includes (a) that portion delineated by drilling and defined bygas-oil and/or oil-water contacts, if any, and (b) the immediatelyadjoining portions not yet drilled but which can be reasonably judged aseconomically productive on the basis of available geological and engineering data.In the absence of information on fluid contacts, the lowest known structuraloccurrence of hydrocarbons controls the lower proved limit of the reservoir.

 

2.                                       Reserveswhich can be produced economically through application of improved recoverytechniques (such as fluid injection) are included in the proved classificationwhen successful testing by a pilot project or the operation of an installedprogram in the reservoirs provides support for the engineering analysis onwhich the project or program was based.

 

3.                                       Estimatesof proved reserves do not include the following:

 

a.                                       Oilthat may become available from known reservoirs but is classifiedseparately as indicated additional reserves.

 

b.                                      Crudeoil, natural gas, and natural gas liquids, the recovery of which is subject toreasonable doubt because of uncertainty as to geology, reservoircharacteristics, or economic factors.

 

c.                                       Crudeoil, natural gas, and natural gas liquids, that may occur in undrilledprospects.

 

d.                                      Crudeoil, natural gas, and natural gas liquids, that may be recovered from oilshales, coal, gilsonite, and other such sources.

 

Depending upon their status of development,proved reserves are subdivided into proved developed reserves and provedundeveloped reserves.

 

**Proved Developed Oil and Gas Reserves**

 

Proved developed oil and gas reserves arereserves that can be expected to be recovered through existing wells withexisting equipment and operating methods. Additional oil and gas expected to beobtained through the application of fluid injection or other improved recoverytechniques for supplementing the natural forces and mechanisms of primaryrecovery should be included as proved developed reserves only after testing bya pilot project or after the operation of an installed program has confirmedthrough production response that increased recovery will be achieved.

 

**Proved Undeveloped Oil and Gas Reserves**

 

Proved undeveloped oil and gas reserves arereserves that are expected to be recovered from new wells on undrilled acreage,or from existing wells where a relatively major expenditure is required forrecompletion. Reserves on undrilled acreage shall be limited to those drillingunits offsetting productive units that are reasonably certain of productionwhen drilled. Proved reserves for other undrilled units can be claimed onlywhere it can be demonstrated with certainty that there is continuity ofproduction from the existing productive formation. Under no circumstancesshould estimates for proved undeveloped reserves be attributable to any acreagefor which an application of fluid injection or other improved recoverytechnique is contemplated, unless such techniques have been proved effective byactual tests in the area and in the same reservoir.

 

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