MOECO acquires stake in Gulf of Mexico Assets from Pogo Producing Company

April 21, 2006 Project

Mitsui Oil Exploration Co., Ltd. ("MOECO", Head office: Hibiya Central Bldg. 2-9, Nishi Shimbashi 1-Chome, Minato-ku, Tokyo, JAPAN / President: Mr. Yoshiyuki Kagawa) announced today that MOECO and Mitsui & Co., Ltd., ("Mitsui"), which currently holds a 47.35% stake of MOECO, have entered into a definitive agreement with Pogo Producing Company ("Pogo") to acquire an undivided 50% share of Pogo's oil and gas leasehold interests in the Gulf of Mexico. The agreement was signed between Pogo and MitEnergy Upstream LLC, a vehicle newly established in the U.S.A. by three parties; Mitsui (35%), Mitsui & Co. (U.S.A.) Inc. (35%) and MOECO (30%). The closing of the transaction is subject to the satisfaction of customary conditions precedent including the approval by U.S. governmental authorities.

The acquisition covers a total of 85 blocks estimated to hold approximately 24 million barrels of oil equivalent of proven oil and gas reserves at a purchase price of approximately US$500 million (as of the effective date January 1, 2006) subject to customary adjustments. More than half of these 85 blocks are currently producing oil and gas, with an expected approximate daily production capacity of up to 12,000 barrels of oil equivalent from those developed blocks. Additionally, further development and exploration is planned in order to maintain and increase production.

MOECO is currently active internationally, with key assets in the Gulf of Thailand with a total daily production of approximately 80,000boed. MOECO has been targeting North America as an important focus area for the E&P business as well as Southeast Asia, the Middle East and North Africa, and is actively seeking to expand its operations through the acquisition of assets. The acquisition is positioned as the foothold to enhance MOECO's business activities internationally.