Pogo Producing ( PPP) agreed to sell an undivided 50% of each and all of its Gulf of Mexico oil and gas leasehold interests to Japan's Mitsui for $500 million in cash. The deal is expected to close during June.

Pogo will fund its acquisition of Latigo Petroleum using the proceeds from the sale of Gulf of Mexico properties, the company said. The Latigo acquisition involves properties in the Permian Basin of west Texas and southeastern New Mexico and in the Texas panhandle area of the Anadarko Basin.

Pogo's 50% interest in Gulf of Mexico assets are equivalent to net production capacity of 8,000 barrels per day of oil and 24 million cubic feet per day of natural gas, the company added.

The company has also separately announced that it will work together with Mitsui, on a non-exclusive basis, to seek further opportunities for the purpose of jointly acquiring interests in oil and natural gas assets in various basins across the United States and Canada.

"We are extremely pleased to make this announcement, as well as the sale of half of our stake in the Gulf of Mexico to Mitsui. Mitsui is a large, financially powerful company that we have come to know and greatly respect as a result of the 2005 sale to Mitsui of some of Pogo's assets in the Gulf of Thailand," the company said. "Today's announcement marks a milestone in enhancing investment value and minimizing risk for Pogo's shareholders. Pogo is a determined and disciplined asset buyer, and we look forward to working closely with Mitsui to realize continued growth in North America."

This story was created through a joint venture between TheStreet.com and IRIS.

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