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Energen Unit Adds to Bone Spring/Avalon Acreage Position

^{Published on 2011-01-06 14:20:37 - Market Wire}
 

BIRMINGHAM, Ala.--([ BUSINESS WIRE ])--Energen Corporation (NYSE: EGN) today announced that its oil and gas exploration and production company, Energen Resources Corporation, has purchased three-year leases for approximately 17,000 net acres in the Bone Spring and Avalon shale trends in the Permian Basin from various Texas state agencies and other entities for $15.3 million.

Based on 320-acre spacing, the company estimates that the acreage in Reeves, Ward, Loving, and Winkler counties offer potential for approximately 50 Bone Spring locations and 50 Avalon shale locations.

A horizontal drilling play targeting the 3^rd Bone Spring Sands at a vertical depth of 10,500-11,500 feet, the typical Bone Spring well has estimated ultimate recovery of 400,000-500,000 barrels of oil equivalents; Energen Resources estimates that drilling and completion costs are approximately $7.5 million per well. Energen has drilled 8 Bone Spring wells in Ward and Winkler counties and participated in another 23 wells; the company announced plans in December 2010 to drill another 13 Bone Spring net wells in 2011 and at least one Avalon shale well. Potential drilling plans on the new leases in 2011 have not been determined.

In other developments, Energen Resources closed last month on its previously announced acquisition of 10,360 net Wolfberry acres in the southeast portion of the trend from a private seller for $75 million. The effective date of this transaction was December 1, 2010.

Energen Corporation is a diversified energy holding company with headquarters in Birmingham, AL. Its two lines of business are the acquisition, development and exploration of domestic, onshore natural gas, oil and NGL reserves and natural gas distribution in central and north Alabama. At year-end 2009, Energen Resources had more than 3.5 trillion cubic feet equivalent of proved, probable, and possible reserves in the San Juan, Permian, and Black Warrior basins. Alabama Gas Corporation is the largest distributor of natural gas in Alabama. More information is available at [ http://www.energen.com ].

This release contains statements expressing expectations of future plans, objectives and performance that constitute forward-looking statements made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Except as otherwise disclosed, the Company's forward-looking statements do not reflect the impact of possible or pending acquisitions, divestitures or restructurings. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise. All statements based on future expectations rather than on historical facts are forward-looking statements that are dependent on certain events, risks and uncertainties that could cause actual results to differ materially from those anticipated. In addition, the Company cannot guarantee the absence of errors in input data, calculations and formulas used in its estimates, assumptions and forecasts. A more complete discussion of risks and uncertainties that could affect future results of Energen and its subsidiaries is included in the Company's periodic reports filed with the Securities and Exchange Commission.