The Pogo Producing Company (NYSE:PPP) said today that it agreed to add two members to its Board of Directors from Third Point LLC, effective immediately, expanding the Board's size to ten members from eight. In return, the activist hedge fund agreed not to solicit proxies in Pogo's 2007 annual meeting or take certain other hostile shareholder actions. The news comes after many investors, including Third Point and Third Avenue Management, had expressed concerns about the company's valuation and management's inability to unlock value. The hedge fund had encouraged the company to sell the company in whole or part in the past, threatening a proxy fight if the company didn't heed its demands.

So, what does all of this mean? Well, according to the company's press release, Pogo and its financial advisors, Goldman, Sachs & Co. and TD Securities Inc., are actively exploring strategic alternatives, including the sale or merger of Pogo. In addition, the company said it will continue to simultaneously pursue the potential sale of significant assets including its Canadian, Gulf of Mexico or other properties. Knowing Daniel Loeb's past successes, we can be sure that something will be done to unlock value. These factors make PPP a stock worth watching even more closely during the next couple of months!

Related Companies
Apache Corporation (APA)
EOG Resources, Inc. (EOG)
Forest Oil Corporation (FST)