Oil and natural gas exploration and production company Pogo Producing ( PPP) said it intends to offer $400 million of senior subordinated notes due 2013 in a private offering to repay senior debt. Separately, the Houston-based company said it closed the sale of 50% interest in Gulf of Mexico oil and gas leases to Mitsui & Co. for $500 million. The company used the proceeds from the sale to pay down debt from its recent $750 million acquisition of Latigo Petroleum, which was closed on May 2. The company expects to book a pretax gain of about $300 million in the second quarter, and a pretax noncash charge of about $10 million to $15 million related to hedges that no longer qualify for hedge accounting treatment. With the sale of the Gulf of Mexico assets and the acquisition of Latigo, the company said it had increased its total proven oil and gas reserves by more than 6% to 2.174 trillion cubic feet of natural gas equivalent. "We are pleased with the timely closing of the Mitsui transaction. It represents another significant step in our stated strategy to grow Pogo's onshore North American presence," the company said. "We are committed to enhancing the company's value and believe that our strategy will also reduce our offshore risks." Pogo's stock rose 93 cents, or 2.1%, to $44.90 Wednesday.