**Exhibit 99.2**

 
|                                        | **miller and lents, ltd.**      |   | MARTIN G. MILLER (1948-1980)  MAX R. LENTS (1948-2001)  KENNETH B. FORDJAMES C. PEARSONGREGORY W. ARMES  CHRISTOPHER A. BUTTA  JAMES A. COLE  R. W. FRAZIERGEORGE SCHAEFERMICHAEL S. YOUNGGARY B. KNAPP  WILLIAM P. KOZA  STEVEN D. MILLS  ROBERT J. OBERST  CARL D. RICHARD  GUY M. MILLER  LESLIE A. FALLON   DAVID A. FENTON  STEPHEN M. HAMBURG  GARY W. PRIDDY |
|----------------------------------------|---------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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| INTERNATIONAL OIL AND  GAS CONSULTANTS |                            |
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| twenty-seventh  floor                  |                            |
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| 1100  louisiana                        | ** **                      |
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| HOUSTON, TEXAS 77002-5216              |                            |
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| ** **                             | TELEPHONE 713 651-9455          |   |
| ** **                             |                            |   |
| ** **                             | telefax 713 654-9914            |   |
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| ** **                             | e-mail: mail@millerandlents.com |   |
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|                                   | January 19, 2005                |   |
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|                                        |                                 |        |                                                                                                                                                                                                                                                                                                                                                                     |  |

 

POGO Producing Company 

5 Greenway Plaza, Suite 2700 

Houston, Texas 77046-0504

 
|   | Re:    | Reserves and Future Net Revenues |
|--------|--------|----------------------------------|
|   |   | As of December 31, 2004          |
|   |   | SEC Price Case                   |

 

Gentlemen:

 

At your request,we reviewed the estimates of proved reserves of oil, natural gas liquids, andgas and the future net revenues associated with these reserves that POGOProducing Company, hereinafter POGO, attributes to its net interests in oil andgas properties located in Louisiana, Texas, and Wyoming as of December 31,2004.  POGO’s estimates, shown below, arein accordance with the definitions contained in Securities and ExchangeCommission Regulation S-X, Rule 4-10(a) as shown in the Appendix.

 

**Reservesand Future Net Revenues as of December 31, 2004**

 
| ** **                  | ** ** | **Proved**    | ** ** |
|-----------------------------|------------|---------------|------------|
| ** **                  | ** ** | **Developed** | ** ** | ** ** | ** ** | **Total** | ** ** |
| ** **                  | ** ** | **Producing** | ** ** | **Nonproducing** | ** ** | **Undeveloped** | ** ** | **Proved** | ** ** |
| **Net  Remaining Reserves** | ** ** | ** **    | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Oil/Condensate,  MBbls.     |       | 5,018.7       |       | 1,248.7 |   | 36.7 |   | 6,304.1 |   |
| Plant Products,  MBbls.     |       | 316.0         |       | 286.3 |   | 0.0 |   | 602.3 |   |
| Gas, MMcf                   |       | 480,256.0     |       | 43,114.0 |   | 57,561.0 |   | 580931.0 |   |
|                        |       |          |       |   |   |   |   |   |   |
| **Future  Net Revenues**    |       |          |       |   |   |   |   |   |   |
| Undiscounted, M$            |       | 2,267,050.2   |       | 255,295.9 |   | 196,011.2 |   | 2,718,357.3 |   |
| Discounted @  10%, M$       |       | 1,125,488.6   |       | 127,556.1 |   | 110,998.5 |   | 1,364,043.2 |   |

 

We madeindependent estimates of 88 percent of the proved reserves estimated by POGO.We ranked and selected, for independent estimates and review, those propertieswith the largest reserve 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

 

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required to estimate its proved reserves and to project its future netrevenues, (2) in making its estimates and projections, POGO used appropriateengineering, geologic, and evaluation principles and techniques that are inaccordance with practices generally accepted in the petroleum industry, and (3)the results of those estimates and projections are, in the aggregate,reasonable.

 

All reservesdiscussed herein are located within the continental United States.  Gas volumes were estimated at the appropriatepressure base and temperature base that are established for each well or fieldby the applicable sales contract or regulatory body.  Total gas reserves were obtained by summingthe reserves for all the individual properties and are therefore stated hereinat a mixed pressure base.

 

POGO representsthat the future net revenues reported herein were computed based on pricesbeing received for oil, natural gas liquids, and gas as of December 31, 2004and are in accordance with Securities and Exchange Commission Regulation S-X,Rule 4-10(a).  The present value offuture net revenues was computed by discounting monthly the future net revenuesat 10 percent per annum.  Estimates offuture net revenues and the present value of future net revenues are notintended and should not be interpreted to represent fair market values for theestimated reserves.

 

Reserve estimateswere based on decline curve extrapolations, material balance calculations,volumetric calculations, analogies, or combinations of these methods for eachwell, reservoir, or field.  Reserveestimates from volumetric calculations and from analogies are often lesscertain than reserve estimates based on well performance obtained over a periodduring which a substantial portion of the reserves were produced.

 

In making itsprojections, POGO estimated well abandonment costs for certain fields, exceptwhere salvage values were assumed 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’s estimates include adjustments for gasbalancing.

 

The evaluationspresented in this report, with the exceptions of those parameters specified byothers, reflect our informed judgments based on accepted standards ofprofessional investigation but are subject to those generally recognizeduncertainties associated with interpretation of geological, geophysical, andengineering information.  Governmentpolicies and market conditions different from those employed in this study maycause the total quantity of oil, natural gas liquids, or gas to be recovered,actual production rates, prices received, or operating and capital costs tovary from those presented in this report.

 

In conductingthese evaluations, we relied upon production histories, accounting and costdata, and other financial, operating, engineering, and geological data suppliedby POGO.  To a lesser extent,nonproprietary data existing in the files of Miller and Lents, Ltd., and dataobtained from commercial services were used.  We also relied, without independentverification, upon POGO’s representation of its ownership interests, payoutbalances and reversionary interests, the current prices, and the transportationfees applicable to each property.

 

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Miller and Lents,Ltd. is an independent oil and gas consulting firm.  None of the principals of this firm have anyfinancial interests in POGO or in any of its affiliated companies.  Our fee isnot contingent upon the results of our work or report, and we have notperformed other services for POGO that would affect our objectivity.

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

 

CDR/hsd

 

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