A large Plains Exploratin & Production (NYSE:PXP) shareholder expressed concerns over the company's lack of a strategic plan for its proposed merger with Pogo Producing Company (NYSE:PPP), according to a Schedule 13D filing with the SEC. Shareholders are hoping that this larger player can help the company formulate a plan to unlock shareholder value.

Sandell Asset Management, which owns a 5.1 percent stake in the Houston-based company, said in a letter to the board that it supports the transaction but would like to see a strategic plan put in place for the company post-closing. The hedge fund urged a number of actions, including asset sales, MLP creations and aggressive share repurchases.

"As you probably know based on our recent meetings and conference calls, while we are inclined to support the Pogo transaction, we are concerned by your inability to provide a concrete plan for the combined company post-closing," Thomas Sandell said in a letter to the board.

To remedy this, Sandell wants to see the hedge fund sell oil reserves and use the proceeds to fund share repurchases. Simultaneously, the hedge fund wants to see the company form a master limited partnership for all of its reserves in California and the Piceance basin. Combined, these efforts would unlock millions in value for shareholders.

"We are confident that undertaking [these actions] will result in dramatic value creation for all shareholders of up to $90 per share (+80%)," said Thomas Sandell. "We believe the market unnecessarily discounts PXP’s value by using unrealistically low commodity price assumptions and giving little credit for unproved and non-core assets."

In the end, this is all great news for shareholders. Shares of PXP have seen very modest appreciation given the price of oil and shareholders are ready for a change. The lack of planning surrounding the acquisition of PPP has caused the share price to plummet and create buying opportunities for enterprising investors. Combined, these factors make PXP a stock worth watching!

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