-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PgiT59B0xomH2UnXXPpf7sGajVRyZsr6rxnzZF8k2nZqP2wRyscluy6RBf6PehFu UcAkBwEYiaGjkAX+nrTNZA== 0000899140-06-001686.txt : 20061201 0000899140-06-001686.hdr.sgml : 20061201 20061201155651 ACCESSION NUMBER: 0000899140-06-001686 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20061201 DATE AS OF CHANGE: 20061201 GROUP MEMBERS: DANIEL S. LOEB SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: POGO PRODUCING CO CENTRAL INDEX KEY: 0000230463 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 741659398 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-30481 FILM NUMBER: 061251376 BUSINESS ADDRESS: STREET 1: 5 GREENWAY PLAZA STE 2700 STREET 2: P O BOX 2504 CITY: HOUSTON STATE: TX ZIP: 77252-0504 BUSINESS PHONE: 7132975000 MAIL ADDRESS: STREET 1: 5 GREENWAY PLAZA SUITE 2700 STREET 2: P O BOX 2504 CITY: HOUSTON STATE: TX ZIP: 77252 FORMER COMPANY: FORMER CONFORMED NAME: PENNZOIL OFFSHORE GAS OPERATORS INC /TX/ DATE OF NAME CHANGE: 19600201 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Third Point LLC CENTRAL INDEX KEY: 0001040273 IRS NUMBER: 133922602 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 390 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2122247400 MAIL ADDRESS: STREET 1: 390 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: THIRD POINT MANAGEMENT CO LLC DATE OF NAME CHANGE: 19970602 SC 13D/A 1 t120106b.txt FIRST AMENDMENT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Amendment No. 1) Under the Securities Exchange Act of 1934* Pogo Producing Company - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $1.00 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 730448107 - -------------------------------------------------------------------------------- (CUSIP Number of Class of Securities) Daniel S. Loeb Third Point LLC 390 Park Avenue New York, NY 10022 (212) 224-7400 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: Michael A. Schwartz, Esq. Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, NY 10019-6099 (212) 728-8000 December 1, 2006 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Schedule) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - -------------------------------- -------------------------------- CUSIP No. 730448107 Page 2 of 8 Pages - -------------------------------- -------------------------------- - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Third Point LLC I.D. #13-3922602 - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY EACH REPORTING 4,200,000 PERSON WITH --------- ------------------------------------------------ 9 SOLE DISPOSITIVE POWER 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 4,200,000 - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 4,200,000 - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.2% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ----------- -------------------------------------------------------------------- SCHEDULE 13D - -------------------------------- -------------------------------- CUSIP No. 730448107 Page 3 of 8 Pages - -------------------------------- -------------------------------- - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Daniel S. Loeb - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY EACH REPORTING 4,200,000 PERSON WITH --------- ------------------------------------------------ 9 SOLE DISPOSITIVE POWER 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 4,200,000 - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 4,200,000 - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.2% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ----------- -------------------------------------------------------------------- This Amendment No. 1 (the "Amendment") amends the Schedule 13D filed on November 20, 2006 (the "Original 13D", and together with the Amendment, the "Schedule 13D"). The Schedule 13D is being filed on behalf of Third Point LLC, a Delaware limited liability company (the "Management Company"), and Daniel S. Loeb, an individual ("Mr. Loeb", and together with the Management Company, the "Reporting Persons"). This Schedule 13D relates to the Common Stock, par value $1.00 per share, of Pogo Producing Company, a Delaware corporation (the "Company"). Unless the context otherwise requires, references herein to the "Common Stock" are to such Common Stock of the Company. The Management Company is the investment manager or adviser to a variety of hedge funds and managed accounts (such funds and accounts, collectively, the "Funds"). The Funds directly own the Common Stock to which this Schedule 13D relates, and the Reporting Persons may be deemed to have beneficial ownership over such Common Stock by virtue of the authority granted to them by the Funds to vote and to dispose of the securities held by the Funds, including the Common Stock. Item 4. Purpose of Transaction. Item 4 of the Schedule 13D is hereby amended by adding the following thereto: On November 29, 2006, representatives of the Reporting Persons met with Paul Van Wagenen, Chairman, President and Chief Executive Officer of the Company following the Company's presentation at the Friedman Billings Ramsey investor conference in New York. This meeting with Mr. Van Wagenen confirmed the Reporting Persons' positive view of the Company's underlying asset value, but also contributed to investor concerns that the Company's management has failed to pursue cohesive exploration, development, acquisition and financial plans. In a letter dated December 1, 2006 from the Management Company to Mr. Van Wagenen, a copy of which is attached to this Amendment as an exhibit and incorporated herein by reference, the Management Company elaborated on what it believes to be some of the failures of the Company's management. Accordingly, the Reporting Persons intend to seek to elect at the Company's 2007 annual meeting of shareholders (the "Annual Meeting") new directors who will constitute a majority of the Company's board of directors (the "Board"). In order to do so, the Reporting Persons intend to propose at the Annual Meeting (i) nominees to fill the seats of the Company's directors whose terms expire at the Annual Meeting, (ii) amendments (the "Proposed Amendments") to the Company's bylaws (the "Bylaws") that will (A) expand the size of the Board and (B) allow the Company's shareholders to fill the newly created directorships, and (iii) nominees to fill the newly created directorships if the Proposed Amendments are adopted. 4 Based on public disclosures by the Company, the Board currently consists of 8 directors serving staggered three-year terms. The terms of 3 of these directors will end at the Annual Meeting. Pursuant to the Company's Restated Certificate of Incorporation (the "Charter"), the Board is to consist of between 3 and 13 members as specified from time to time in the Bylaws. Currently, the Bylaws provide that the Board is to consist of between 3 and 11 directors, as determined from time to time by or pursuant to a resolution passed by a majority of the Board. The first of the two Proposed Amendments would amend this provision of the Bylaws to provide that the Board shall consist of 11 directors. The Bylaws currently provide that if the size of the Board is expanded, only the Board can fill the newly created directorships. The second of the Proposed Amendments would amend the Bylaws to provide that the Company's shareholders shall have the right to fill vacancies and newly created directorships on the Board and that in the case of directorships created by the shareholders, only the shareholders shall fill such directorships. The Bylaws provide that they can be altered, amended, added to or repealed by the Company's shareholders at any annual or special meeting, by the vote of the holders of shares of stock having a majority of the voting power of the then-outstanding shares of voting stock. As a result of this provision, the Proposed Amendments will be adopted if they are approved at the Annual Meeting by the holders of a majority of the Common Stock. The Reporting Persons intend to solicit proxies for use at the Annual Meeting in order to seek adoption of the Proposed Amendments and the election to the Board of nominees it will propose who would constitute a majority of the Board if elected. * * * In connection with their intended proxy solicitation, Third Point LLC and certain of its affiliates intend to file a proxy statement with the Securities and Exchange Commission (the "SEC") to solicit stockholders of the Company. THIRD POINT LLC STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN ANY SUCH PROXY SOLICITATION. SUCH PROXY STATEMENT, WHEN FILED, AND ANY OTHER RELEVANT DOCUMENTS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV. THIRD POINT PARTICIPANT INFORMATION In accordance with Rule 14a-12(a)(1)(i) of the Securities Exchange Act of 1934, as amended, the following persons are anticipated to be, or may be deemed to be, 5 participants in any such proxy solicitation by Third Point LLC: Third Point LLC, Mr. Loeb, Third Point Offshore Fund, Ltd., Third Point Ultra Ltd., Third Point Partners LP, Third Point Partners Qualified LP and Lyxor/Third Point Fund Limited. Certain of these persons hold direct or indirect interests as follows: Third Point LLC may be deemed to beneficially own 4,200,000 shares of Common Stock; Mr. Loeb may be deemed to beneficially own 4,200,000 shares of Common Stock; Third Point Offshore Fund, Ltd. may be deemed to beneficially own 2,738,200 shares of Common Stock; Third Point Ultra Ltd. may be deemed to beneficially own 456,000 shares of Common Stock; Third Point Partners LP may be deemed to beneficially own 419,600 shares of Common Stock; Third Point Partners Qualified LP may be deemed to beneficially own 333,200 shares of Common Stock; and Lyxor/Third Point Fund Limited may be deemed to beneficially own 253,000 shares of Common Stock. Item 5. Interest in Securities of the Issuer. Item 5(c) of the Schedule 13D is hereby amended by adding the following thereto: (c) Schedule A hereto sets forth certain information with respect to transactions by the Funds, at the direction of the Reporting Persons, in Common Stock since the most recent filing on Schedule 13D. All of the transactions set forth on Schedule A were effected in open market transactions on the New York Stock Exchange. Except as set forth on Schedule A, since the most recent filing on Schedule 13D there were no transactions in the Common Stock effected by the Reporting Persons nor, to the best of their knowledge, any of their directors, executive officers, general partners or members. Item 7. Material to be Filed as Exhibits. 99.1 Letter, dated December 1, 2006, from the Management Company to Paul Van Wagenen, Chairman, President and Chief Executive Officer of the Company. [Signatures on following page] 6 SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: December 1, 2006 THIRD POINT LLC By: /s/ Daniel S. Loeb ------------------------------------------ Name: Daniel S. Loeb Title: Chief Executive Officer /s/ Daniel S. Loeb ---------------------------------------------- Daniel S. Loeb [SIGNATURE PAGE TO AMENDMENT NO. 1 TO SCHEDULE 13D WITH RESPECT TO POGO PRODUCING COMPANY]
Schedule A (Transactions by the Funds in Common Stock since the most recent filing on Schedule 13D) Date Transaction Shares Price Per Share($) ---- ----------- ------ ------------------ - ------------------------ ---------------------------- --------------------------------- ----------------------------------- 11/30/06 BUY 4,200 52.92 - ------------------------ ---------------------------- --------------------------------- ----------------------------------- 11/30/06 SELL (4,200) 52.92 - ------------------------ ---------------------------- --------------------------------- -----------------------------------
EX-99.1 3 t120106c.txt THIRD POINT LETTER Exhibit 99.1 [Third Point Letterhead] VIA EMAIL AND FEDERAL EXPRESS - ----------------------------- December 1, 2006 Mr. Paul G. Van Wagenen Chairman, President & Chief Executive Officer Pogo Producing Company 5 Greenway Plaza, Suite 2700 Houston, TX 77046 Dear Mr. Van Wagenen: As you are aware, certain entities advised by Third Point LLC ("Third Point") hold 4 million common shares of Pogo Producing Company ("Pogo" or the "Company") and call options to purchase 200,000 shares, representing a 7.2% stake. We appreciate your taking the time to meet with us following the Company's presentation at the Friedman Billings Ramsey investors conference on November 29th. We approached the meeting with an open mind and the sincere hope that you would answer our questions in a way that might help dispel your poor reputation among your peers, energy analysts and investors. While the meeting reinforced our positive view of the Company's underlying asset value, it also contributed to investor concerns that Pogo's management has failed to pursue cohesive exploration, development, acquisition and financial plans. One particularly vexing transaction, the Northrock Resources acquisition in Canada, typifies the inopportune type of capital allocation decisions made by the Company. On July 11, 2005, you announced the acquisition of Northrock for $1.8 billion in cash, a significant transaction for Pogo, exceeding half of the then $3.2 billion market capitalization of the Company. At the time, you commented that "Pogo is a very particular and discriminating buyer of assets." Unfortunately, the results realized since the acquisition belie your contention. In the year since the acquisition closed, you have spent over $350 million - approximately 20% of the purchase price - in capital to improve these assets, yet production has actually declined 10% from 30,000 barrels of oil equivalents per day ("boepd") to 27,000 boepd. Given the significant scope of the acquisition and poor performance of the assets to date, we were hoping your answers to our questions would help us understand the strategic thinking behind the acquisition and what return on capital the Company expected to achieve. Your answers were not satisfactory. When we asked you about the natural annual decline rate of the assets, you responded "7 to 8%," which seems unlikely given the 10% annual decline experienced during your first year of ownership while you invested significant capital attempting to increase production. This is especially troubling and gives credence to reports by industry participants that Pogo's management did only minimal due diligence before consummating the transaction last year. Mr. Paul G. Van Wagenen December 1, 2006 Page 2 of 2 While the Northrock acquisition is emblematic, the true measurement of your performance as a chief executive is the return you have generated for shareholders. Unfortunately, the results are not encouraging. Over the past ten calendar years, the share prices of your peers comprising the S&P Midcap Oil & Gas Exploration & Production Index have appreciated at a compound rate of 11.7% while your stock price has appreciated only 5.8% annually, less than half the rate of your peers. Lest you think we chose an unfavorable time frame to evaluate your performance, the table below shows that Pogo has underperformed on a cumulative basis for every time period over the past decade!
Compound Annual Price Appreciation for the Periods Ending December 31, 2005 --------------------------------------------------------------------------- 1 Year 2 Year 3 year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year ------ ------ ------ ------ ------ ------ ------ ------ ------ ------- Pogo Producing 2.7% 1.6% 10.2% 17.3% 9.8% 15.9% 21.2% 6.8% 0.6% 5.8% Index 39.1% 33.6% 32.2% 26.0% 22.0% 30.3% 27.3% 12.7% 9.7% 11.7% ----- ----- ----- ----- ----- ----- ----- ----- ---- ----- Relative Performance -36.4% -32.0% -22.0% -8.7% -12.2% -14.4% -6.1% -6.0% -9.1% -5.9%
Unsurprisingly, the underperformance has continued this year. Through November 20th, the stock had declined 4.1% year-to-date as compared to a 4.7% increase for your peers. In fact, the only recent time period during which the stock has outperformed the index has been in the period since we filed our initial Schedule 13D with the SEC on November 20th. In the one and a half decades you have run Pogo, shareholders have suffered subpar returns. Your track record is long and meager, and it is time for change. Accordingly, we demand that the Board immediately initiate a process to sell the Company in whole or several parts to the highest bidder or bidders. To underscore our commitment to this process, we are advising you today that we intend to conduct a proxy contest at your 2007 annual meeting of shareholders that will allow us to elect new directors comprising a majority of the Company's board of directors. Sincerely, /s/ Daniel S. Loeb Daniel S. Loeb Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----