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              EXTENSION AGREEMENT TO CONTINUE EMPLOYMENT AGREEMENT
                  BETWEEN JOHN O. MCCOY, JR. ("EXECUTIVE") AND
           POGO PRODUCING COMPANY, A DELAWARE CORPORATION ("COMPANY"),
                        DATED EFFECTIVE FEBRUARY 1, 1999

    WHEREAS, Executive and Company are parties to an "Employment Agreement" 
bearing an original "Effective Date" of February 1, 1996; and

    WHEREAS, February 1, 1999, (even date herewith) is hereby deemed to be 
the "Renewal Date" in that Employment Agreement; and

    WHEREAS, Executive and Company each wish to extend said Employment 
Agreement for an additional one-year period so as to terminate (unless 
further extended) two years thereafter, (to-wit January 31, 2001); and

    WHEREAS, Company desires to retain the services of Executive for the 
benefit of Company and its shareholders, and desires to induce Executive to 
remain in its employ for that extended time period; and

    WHEREAS, Executive has agreed to continue to serve as an employee of 
Company for the period specified herein from and after the date of this 
Extension Agreement; and

    WHEREAS, Company and Executive desire to enter into this Extension 
Agreement in order to formally secure for Company the benefit of the 
experience and abilities of Executive, and to set forth the agreements and 
understandings of Company and Executive; and

    WHEREAS, Company has advised Executive that execution and performance of 
this Extension Agreement by Company has been duly authorized and approved by 
all requisite corporate action on the part of the Company.

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    NOW, THEREFORE, in consideration of the foregoing and the mutual promises 
and agreements herein contained, and in consideration of the sum of $10 paid 
by Company to Executive, receipt whereof is hereby acknowledged by Executive, 
Executive and Company do hereby agree as follows:

    1. The Employment Agreement between Executive and Company bearing an 
"Effective Date" of February 1, 1996 and a "Renewal Date" which is deemed 
herein to be February 1, 1999, is hereby extended for an additional one-year 
period commencing February 1, 1999 and ending January 31, 2001, unless such 
employment period is hereafter further extended for an additional period by 
both Executive and Company.

    2. All provisions of the Employment Agreement between Executive and 
Company dated as of February 1, 1996, and as it is herein amended, are 
continued in full force and effect without change as if the Employment 
Agreement had been initially effective as of February 1, 1999.

                                       POGO PRODUCING COMPANY

                                       By: /s/ PAUL G. VAN WAGENEN
                                           -------------------------------
                                           Chairman, President and Chief
                                           Executive Officer

ATTEST:

/s/ JOE ANN KINGDON
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Assistant Corporate Secretary

                                       EMPLOYEE:

                                       /s/ JOHN O. MCCOY, JR.
                                       ----------------------