**Exhibit 99.1**

 
|            |                  | RYDER SCOTT COMPANY |       |       |       |                      | FAX (713)  651-0849   |
|------------|-----------------------|---------------------|------------|------------|------------|---------------------------|-----------------------|
|       | PETROLEUM CONSULTANTS |                |       |       |       |
|       | 1100 LOUISIANA        |                |       | SUITE 3800 |       | HOUSTON, TEXAS 77002-5218 |                  | TELEPHONE (713)  651-9191 |
| ** ** | ** **            | ** **          | ** ** | ** ** | ** ** | ** **                |                  |   |
| ** ** | ** **            | ** **          | ** ** | ** ** | ** ** | ** **                | January 25, 2006 |   |   |
|            |                       |                     |            |            |            |                           |                       |  |  |  |  |

 

Pogo ProducingCompanyPost Office Box 2504Houston, Texas 77252-2504

 

Gentlemen:

 

At your request, we have prepared an estimate of the reserves, futureproduction, and income attributable to certain leasehold and royalty interestsof Pogo Producing Company (Pogo) as of January 1*,*2006. The subject properties are located in the UnitedStates in the states of Indiana, Kansas, Louisiana, Mississippi, New Mexico,Oklahoma, Texas, and in the state waters offshore Louisiana and in federalwaters offshore Louisiana and Texas. The income data were estimated using theSecurities and Exchange Commission (SEC) requirements for future price and costparameters.

 

The estimated reserves and future income amountspresented in this report are related to hydrocarbon prices. Hydrocarbon prices ineffect at December 31, 2005 were used in the preparation of this report asrequired by SEC rules; however, actual future prices may vary significantlyfrom December 31, 2005 prices. Therefore, volumes of reserves actuallyrecovered and amounts of income actually received may differ significantly fromthe estimated quantities presented in this report. The results of this studyare summarized below.

 

**SEC PARAMETERS**Estimated Net Reserves and Income DataCertain Leasehold and Royalty Interests of**Pogo Producing Company**As of January 1, 2006

 
| ** **                      | ** ** | **Proved**    | ** ** |
|---------------------------------|------------|---------------|------------|
| ** **                      | ** ** | **Developed** | ** ** | **Undeveloped** | ** ** | **Total  Proved** | ** ** |
| ** **                      | ** ** | **Producing** | ** ** | **Non-Producing** | ** ** | ** ** |
| ***Net Remaining Reserves***    |       |          |       |   |   |   |   |   |   |
| Oil/Condensate —  MBBL     |       | 27,030        |       | 20,242 |   | 15,456 |   | 62,728 |   |
| Plant Products —  MBBL     |       | 7,169         |       | 3,344 |   | 3,596 |   | 14,109 |   |
| Gas—MMCF                   |       | 185,928       |       | 60,494 |   | 103,156 |   | 349,578 |   |
|                            |       |          |       |   |   |   |   |   |   |
| ***Income Data***—***M$*** |       |          |       |   |   |   |   |   |   |
| Future Gross  Revenue           |       | $             | 3,246,426  |   | $ | 1,834,597 |   | $ | 1,938,822 |   | $ | 7,019,845 |   |
| Deductions                      |       | 868,096       |       | 357,044 |   | 598,694 |   | 1,823,834 |   |
| Future Net  Income (FNI)        |       | $             | 2,378,330  |   | $ | 1,477,553 |   | $ | 1,340,128 |   | $ | 5,196,011 |   |
|                            |       |          |       |   |   |   |   |   |   |
| Discounted FNI @  10%           |       | $             | 1,496,291  |   | $ | 836,505 |   | $ | 783,532 |   | $ | 3,116,328 |   |

 

Liquid hydrocarbons are expressed in standard 42gallon barrels. All gas volumes are expressed in millions of cubic feet (MMCF)at the official temperature and pressure bases of the areas in which the gasreserves are located.

 
| 1200, 530 - 8TH AVENUE, S.W. |   | CALGARY, ALBERTA T2P 3S8    |   | TEL (403) 262-2799 |   | FAX (403) 262-2790 |
|------------------------------|--------|-----------------------------|--------|--------------------|--------|--------------------|
| 621 17TH STREET, SUITE 1550  |   | DENVER, COLORADO 80293-1501 |   | TEL (303) 623-9147 |   | FAX (303) 623-4258 |

 

----

 

The estimates of the reserves, future production, andincome attributable to properties in this report were prepared using theeconomic software package Aries for Windows, a copyrighted program of LandmarkGraphics. The program was used solely at the request of Pogo. Ryder Scott hasfound this program to be acceptable, but notes that certain summaries andcalculations may vary due to rounding and may not exactly match the sum of theproperties being summarized. Furthermore, one line economic summaries may varyslightly from the more detailed cash flow projections of the same properties,also due to rounding. The rounding differences are not material.

 

The future gross revenue is after the deduction of production taxes.The deductions comprise the normal direct costs of operating the wells, advalorem taxes, recompletion costs, development costs, and certain abandonmentcosts net of salvage. The future net income is before the deduction of stateand federal income taxes and general administrative overhead, and has not beenadjusted for outstanding loans that may exist nor does it include anyadjustment for cash on hand or undistributed income. Liquid hydrocarbonreserves account for approximately 58 percent and gas reserves account for theremaining 42 percent of total future gross revenue from proved reserves.

 

The discounted future net income shown above wascalculated using a discount rate of 10 percent per annum compounded monthly.Future net income was discounted at four other discount rates which were alsocompounded monthly. These results are shown on each estimated projection offuture production and income presented in a later section of this reportand in summary form below.

 
| ** **                 | ** ** | **Discounted Future Net Income – M$  As of January 1, 2006** | ** ** |
|----------------------------|------------|------------------------------------------------------------------------|------------|
| **Discount Rate  Percent** | ** ** | **Total  Proved**                                                      | ** ** |
|                       |       |                                                                   |       |
| 8                          |       | $                                                                      | 3,361,595  |   |
| 12                         |       | $                                                                      | 2,908,923  |   |
| 15                         |       | $                                                                      | 2,649,993  |   |
| 18                         |       | $                                                                      | 2,437,174  |   |

 

The results shown above are presented for yourinformation and should not be construed as our estimate of fair market value.

 

***Reserves Included InThis Report***

 

The proved reserves included herein conform tothe definition as set forth in the Securities and Exchange Commission’sRegulation S-X Part 210.4-10 (a) as clarified by subsequentCommission Staff Accounting Bulletins. The definition of proved reserves isincluded under the tab “Petroleum Reserves Definitions” in this report.

 

Because of the direct relationship between volumes ofproved undeveloped reserves and development plans, we include in the provedundeveloped category only reserves assigned undeveloped projects or locationsthat Pogo believes will definitely be developed or drilled.

 

Pogo has interests in certain fields or leases thatmay contain substantial additional reserves that are not included in thisreport. A portion of these reserves may qualify as either probable or possiblereserves, but this study was limited to proved reserves at Pogo’s request. Pogohas active exploratory and development drilling programs that may result in thediscovery or reclassification of significant additional volumes.

 

2

----

 

The variousreserve status categories are defined under the tab “Petroleum ReservesDefinitions” in this report. The developed non-producing reserves includedherein are composed of the behind pipe and shut in categories.

 

***Estimates of**Reserves***

 

A significant portion of the reserves included in thisreport was estimated using various performance methods. The reserves estimatedby performance methods utilized extrapolations of various historical data inthose cases where such data were definitive in our opinion. Reserves wereestimated by the volumetric method or analogy in those cases where thehistorical performance data was inconclusive or for reservoirs that have notyet begun production.

 

The reserves included in this report are estimatesonly and should not be construed as being exact quantities. They may or may notbe actually recovered, and if recovered, the revenues therefrom and the actualcosts related thereto could be more or less than the estimated amounts.Moreover, estimates of reserves may increase or decrease as a result of futureoperations.

 

***Future Production**Rates***

 

Initial production rates are based on the currentproducing rates for those wells now on production. Test data and other relatedinformation were used to estimate the anticipated initial production rates forthose wells or locations that are not currently producing. If no productiondecline trend has been established, future production rates were held constantuntil a decline in ability to produce was anticipated. An estimated rate ofdecline was then applied to depletion of the reserves. If a decline trend hasbeen established, this trend was used as the basis for estimating futureproduction rates. For reserves not yet on production, sales were estimated tocommence at an anticipated date furnished by Pogo.

 

The future production rates from wells now onproduction may be more or less than estimated because of changes in marketdemand or allowables set by regulatory bodies. Wells or locations that are notcurrently producing may start producing earlier or later than anticipated inour estimates of their future production rates.

 

***Hydrocarbon Prices***

 

Pogo furnished us with hydrocarbon prices in effect atDecember 31, 2005 and with its forecasts of future prices which take intoaccount SEC and Financial Accounting Standards Board (FASB) rules, currentmarket prices, contract prices, and fixed and determinable price escalationswhere applicable.

 

In accordance with FASB Statement No. 69, December 31,2005 market prices were determined using the daily oil price or daily gas salesprice (“spot price”) adjusted for oilfield or gas gathering hub and wellheadprice differences (e.g. grade, transportation, gravity, sulfur and BS&W) asappropriate. Also in accordance with SEC and FASB specifications, changes inmarket prices subsequent to December 31, 2005 were not considered in thisreport.

 

***Costs***

 

Operating costs for the leases and wells in thisreport are based on the operating expense reports of Pogo or estimates by Pogoand include only those costs directly applicable to the leases or

 

3

----

 

wells. Whenapplicable, the operating costs include a portion of general and administrativecosts allocated directly to the leases and wells under terms of operatingagreements. No deduction was made for indirect costs such as generaladministration and overhead expenses, loan repayments, interest expenses, andexploration and development prepayments that are not charged directly to theleases or wells.

 

Development costs were furnished to us by Pogo and arebased on authorizations for expenditure for the proposed work or actual costsfor similar projects. The estimated net cost of abandonment after salvage wasincluded for all offshore properties where abandonment costs net of salvage aresignificant. Abandonment costs were also included for other properties wherethe net cost of abandonment is expected to exceed any salvage value. Theestimates of the net abandonment costs furnished by Pogo were accepted withoutindependent verification.

 

The initial operating costs for each property werebased on the current operating costs or estimated costs for each property. Inmost cases, these costs were held constant for the life of each property.However, in certain cases, the operating cost is comprised of a fixed andvariable component. The variable component is typically related to well countor production throughput. Historically, the variable costs decline as the fieldis produced.

 

***General***

 

Table A presents a one line summary of proved reserveand income data for each of the subject properties which are ranked accordingto their future net income discounted at 10 percent per year. Table B presentsa one-line summary of gross and net reserves and income data for each of thesubject properties. Table C presents a one-line summary of initial basic datafor each of the subject properties. Volume 1 presents Pogo’s domestic companysummaries. Volumes 2 through 7 present projections of production and income byyears beginning January 1, 2006 for each of Pogo’s domestic divisions andare further broken down by field, then by lease or well.

 

While it may reasonably be anticipated that the futureprices received for the sale of production and the operating costs and othercosts relating to such production may also increase or decrease from existinglevels, such changes were, in accordance with rules adopted by the SEC,omitted from consideration in making this evaluation.

 

The estimates of reserves presented herein were basedupon a detailed study of the properties in which Pogo owns an interest;however, we have not made any field examination of the properties. Noconsideration was given in this report to potential environmental liabilitiesthat may exist nor were any costs included for potential liability to restoreand clean up damages, if any, caused by past operating practices. Pogo has informedus that they have furnished us all of the accounts, records, geological andengineering data, and reports and other data required for this investigation.The ownership interests, prices, and other factual data furnished by Pogo wereaccepted without independent verification. The estimates presented in thisreport are based on data available through December 2005.

 

Pogo has assured us of their intent and ability toproceed with the development activities included in this report, and that theyare not aware of any legal, regulatory or political obstacles that wouldsignificantly alter their plans.

 

Neither Ryder Scott Company nor any of our employeeshave any interest in the subject properties and neither the employment to makethis study nor the compensation is contingent on our estimates of reserves andfuture income for the subject properties.

 

4

----

 

This report was prepared for the use and benefit ofPogo Producing Company and may not be put to other use without our prior writtenconsent for such use. The data, work papers, and maps used in this report areavailable for examination by authorized parties in our offices. Please contactus if we can be of further service.

 
|       |       | Very truly yours,                        |
|------------|------------|------------------------------------------|
|       |       |                                     |
| ** ** | ** ** | **RYDER SCOTT COMPANY, L.P.**            |
| ** ** | ** ** |                                     |
| ** ** | ** ** |                                     |
| ** ** | ** ** | /s/ Samantha F.  Meador                  |   |
|       |       | Samantha F. Meador, P.E.  Vice President |

 

5

----