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Energen Initiates Natural Gas Hedging for 2012-13

^{Published on 2011-01-10 03:41:10 - Market Wire}
 

BIRMINGHAM, Ala.--([ BUSINESS WIRE ])--Energen Corporation (NYSE: EGN) announced today that, over the last several weeks, its oil and gas exploration and production unit, Energen Resources Corporation, has hedged approximately 40.5 billion cubic feet (Bcf) of natural gas in 2012 and 28 Bcf in 2013. The average NYMEX-equivalent price of the hedges was $5.02 per thousand cubic feet (Mcf) in 2012 and $5.30 per Mcf in 2013. The majority of these hedges (29.5 Bcf in 2012 and 19.2 Bcf in 2013) are San Juan Basin-specific. These are the first natural gas hedge transactions that the company has made for 2012 and 2013. Energen utilizes commodity hedges as a means of helping protect its earnings and cash flows from commodity price volatility.

Energen also has added approximately 7.5 Bcf of natural gas hedges in 2011 at an average NYMEX-equivalent price of $4.75 per Mcf, 3.9 million gallons of natural gas liquids (NGL) hedges in 2011 at an average price of $1.01 per gallon, 3.5 million gallons of NGL hedges in 2012 at an average price of 96 cents per gallon, and 846,000 barrels of oil hedges in 2014 at an average NYMEX price of $89.28 per barrel.

Average realized oil and gas prices for Energen Resources' production associated with NYMEX contracts as well as for unhedged production will reflect the impact of basis differentials. Average realized NGL prices will be net of transportation and fractionation fees. For production associated with basin-specific contracts, Energen Resources will receive the contracted hedge price. Energen typically hedges basis differentials where applicable. In the tables above, the basin-specific contract prices were converted for comparability purposes to a NYMEX-equivalent price by adding to them Energen Resources' assumed basis differentials.

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 approximately 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.