-----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, BzzH8KefUXLaXsdCrddoxVlxi/po0PuEr+6nI2a21jgxL4+FNyga7XFRKuNgVNip UqidOIkVj19BlarABr+aZw== 0000277595-04-000038.txt : 20041027 0000277595-04-000038.hdr.sgml : 20041027 20041027145156 ACCESSION NUMBER: 0000277595-04-000038 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040930 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041027 DATE AS OF CHANGE: 20041027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALABAMA GAS CORP CENTRAL INDEX KEY: 0000003146 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 630022000 STATE OF INCORPORATION: AL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 002-38960 FILM NUMBER: 041099229 BUSINESS ADDRESS: STREET 1: 605 RICHARD ARRINGTON JR BLVD NORTH CITY: BIRMINGHAM STATE: AL ZIP: 35203 BUSINESS PHONE: 2053262742 MAIL ADDRESS: STREET 1: 605 RICHARD ARRINGTON JR BLVD NORTH CITY: BIRMINGHAM STATE: AL ZIP: 35203 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENERGEN CORP CENTRAL INDEX KEY: 0000277595 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 630757759 STATE OF INCORPORATION: AL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07810 FILM NUMBER: 041099228 BUSINESS ADDRESS: STREET 1: 605 RICHARD ARRINGTON JR BLVD N CITY: BIRMINGHAM STATE: AL ZIP: 35203-2707 BUSINESS PHONE: 2053262997 MAIL ADDRESS: STREET 1: 605 RICHARD ARRINGTON JR BLVD N CITY: BIRMINGHAM STATE: AL ZIP: 35203 FORMER COMPANY: FORMER CONFORMED NAME: ALAGASCO INC DATE OF NAME CHANGE: 19851002 8-K 1 earnings8k09302004.htm ENERGEN CORPORATION 8K 9/30/2004 SECURITIES AND EXCHANGE COMMISSION

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

 

Date of Report
October 27, 2004

 

Commission

IRS Employer

File

State of

Identification

Number

Registrant

Incorporation

Number

1-7810

Energen Corporation

Alabama

63-0757759

2-38960

Alabama Gas Corporation

Alabama

63-0022000

 

 

 

605 Richard Arrington Jr. Boulevard North

Birmingham, Alabama

35203

 

(Address of principal executive offices)

(Zip Code)

 

(205) 326-2700

(Registrant's telephone number including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

ITEM 2.02          Results of Operations and Financial Condition.

On October 27, 2004, Energen Corporation and Alabama Gas Corporation issued a press release announcing the third quarter and year-to-date 2004 financial results. The press release and supplemental financial information are attached hereto as Exhibit 99.1 and 99.2 to this form 8-K and are furnished to, but not filed with, the Commission.

 

 

ITEM 9.01          Financial Statements and Exhibits.

(c) Exhibits.

The following exhibits are furnished as part of this Current Report on Form 8-K.

Exhibit

Number:

99.1 Press Release dated October 27, 2004

99.2 Supplemental Financial Information dated October 27, 2004

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

ENERGEN CORPORATION
ALABAMA GAS CORPORATION

October 27, 2004

By /s/ G. C. Ketcham

G. C. Ketcham
Executive Vice President, Chief Financial Officer and Treasurer of Energen Corporation and Alabama
Gas Corporation

 

 

EXHIBIT INDEX

EXHIBIT NUMBER

 

DESCRIPTION

 

 

 

99.1

*

Press Release dated October 27, 2004

99.2

*

Supplemental Financial Information dated October 27, 2004

* This exhibit is furnished to, but not filed with, the Commission by inclusion herein.

EX-99.2 2 exhibit992.htm ENERGEN CORPORATION FINANCIAL DATA 9/30/04 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Consolidated Statements of Income (Unaudited)
For the 3 months ending September 30, 2004 and 2003

 

3rd Quarter

 

 

(in thousands, except per share data)

 

2004

 

2003

 

Change

Operating Revenues

 

 

 

 

 

 

Oil and gas operations

$

104,336

$

87,994

$

16,342

Natural gas distribution

 

62,162

 

58,147

 

4,015

Total operating revenues

 

166,498

 

146,141

 

20,357

Operating Expenses

 

 

 

 

 

 

Cost of gas

 

26,545

 

24,966

 

1,579

Operations & maintenance

 

60,788

 

50,227

 

10,561

DD&A

 

30,896

 

29,203

 

1,693

Taxes, other than income taxes

 

15,354

 

12,389

 

2,965

Accretion expense

 

613

 

459

 

154

Total operating expenses

 

134,196

 

117,244

 

16,952

Operating Income

 

32,302

 

28,897

 

3,405

Other Income (Expense)

 

 

 

 

 

 

Interest expense

 

(10,515)

 

(10,153)

 

(362)

Other income

 

702

 

2,289

 

(1,587)

Other expense

 

(225)

 

(2,866)

 

2,641

Total other expense

 

(10,038)

 

(10,730)

 

692

Income Before Income Taxes

 

22,264

 

18,167

 

4,097

Income tax expense

 

8,532

 

6,710

 

1,822

Income from Continuing Operations

 

13,732

 

11,457

 

2,275

Discontinued Operations, Net of Taxes

 

 

 

 

 

 

Income from discontinued operations

 

-

 

145

 

(145)

Gain on disposal

 

8

 

294

 

(286)

Income from Discontinued Operations

 

8

 

439

 

(431)

Net Income

$

13,740

$

11,896

$

1,844

Diluted Earnings Per Share

 

 

 

 

 

 

Continuing operations

$

0.37

$

0.32

$

0.05

Discontinued operations

-

0.01

(0.01)

Net Income

$

0.37

$

0.33

$

0.04

Basic Earnings Per Share

 

 

 

 

 

 

Continuing operations

$

0.38

$

0.32

$

0.06

Discontinued operations

 

-

 

0.01

 

(0.01)

Net Income

$

0.38

$

0.33

$

0.05

Diluted Avg. Common Shares Outstanding

 

36,700

 

36,261

 

439

Basic Avg. Common Shares Outstanding

 

36,268

 

35,869

 

399

Dividends Per Share

$

0.1925

$

0.185

$

0.0075

 

 

Consolidated Statements of Income (Unaudited)
For the 9 months ending September 30, 2004 and 2003

 

Year-to-date

 

 

(in thousands, except per share data)

 

2004

 

2003

 

Change

Operating Revenues

 

 

 

 

 

 

Oil and gas operations

$

295,996

$

266,296

$

29,700

Natural gas distribution

 

410,108

 

373,534

 

36,574

Total operating revenues

 

706,104

 

639,830

 

66,274

Operating Expenses

 

 

 

 

 

 

Cost of gas

 

205,574

 

179,045

 

26,529

Operations & maintenance

 

170,179

 

149,005

 

21,174

DD&A

 

88,559

 

87,473

 

1,086

Taxes, other than income taxes

 

55,679

 

47,824

 

7,855

Accretion expense

 

1,635

 

1,419

 

216

Total operating expenses

 

521,626

 

464,766

 

56,860

Operating Income

 

184,478

 

175,064

 

9,414

Other Income (Expense)

 

 

 

 

 

 

Interest expense

 

(31,527)

 

(31,709)

 

182

Other income

 

2,197

 

7,408

 

(5,211)

Other expense

 

(1,920)

 

(8,218)

 

6,298

Total other expense

 

(31,250)

 

(32,519)

 

1,269

Income Before Income Taxes

 

153,228

 

142,545

 

10,683

Income tax expense

 

57,031

 

53,305

 

3,726

Income from Continuing Operations

 

96,197

 

89,240

 

6,957

Discontinued Operations, Net of Taxes

 

 

 

 

 

 

Income from discontinued operations

 

3

 

966

 

(963)

Loss on disposal

 

(5)

 

(382)

 

377

Income (Loss) from Discontinued Operations

 

(2)

 

584

 

(586)

Net Income

$

96,195

$

89,824

$

6,371

Diluted Earnings Per Share

 

 

 

 

 

 

Continuing operations

$

2.63

$

2.51

$

0.12

Discontinued operations

 

-

 

0.02

 

(0.02)

Net Income

$

2.63

$

2.53

$

0.10

Basic Earnings Per Share

 

 

 

 

 

 

Continuing operations

$

2.66

$

2.53

$

0.13

Discontinued operations

 

-

 

0.02

 

(0.02)

Net Income

$

2.66

$

2.55

$

0.11

Diluted Avg. Common Shares Outstanding

 

36,629

 

35,561

 

1,068

Basic Avg. Common Shares Outstanding

 

36,224

 

35,208

 

1,016

Dividends Per Share

$

0.5625

$

0.545

$

0.0175

 

Consolidated Statements of Income (Unaudited)
For the 12 months ending September 30, 2004 and 2003

 

Trailing 12 Months

 

 

(in thousands, except per share data)

 

2004

 

2003

 

Change

Operating Revenues

 

 

 

 

 

 

Oil and gas operations

$

382,823

$

338,773

$

44,050

Natural gas distribution

 

525,673

 

475,509

 

50,164

Total operating revenues

 

908,496

 

814,282

 

94,214

Operating Expenses

 

 

 

 

 

 

Cost of gas

 

260,352

 

224,816

 

35,536

Operations & maintenance

 

229,393

 

203,736

 

25,657

DD&A

 

117,944

 

113,264

 

4,680

Taxes, other than income taxes

 

71,398

 

60,354

 

11,044

Accretion expense

 

2,106

 

1,908

 

198

Total operating expenses

 

681,193

 

604,078

 

77,115

Operating Income

 

227,303

 

210,204

 

17,099

Other Income (Expense)

 

 

 

 

 

 

Interest expense

 

(42,080)

 

(42,590)

 

510

Other income

 

3,533

 

13,973

 

(10,440)

Other expense

 

(3,679)

 

(14,217)

 

10,538

Total other expense

 

(42,226)

 

(42,834)

 

608

Income Before Income Taxes

 

185,077

 

167,370

 

17,707

Income tax expense

 

67,854

 

59,642

 

8,212

Income from Continuing Operations

 

117,223

 

107,728

 

9,495

Discontinued Operations, Net of Taxes

 

 

 

 

 

 

Income from discontinued operations

 

9

 

1,296

 

(1,287)

Loss on disposal

 

(207)

 

(112)

 

(95)

Income (Loss) from Discontinued Operations

 

(198)

 

1,184

 

(1,382)

Net Income

$

117,025

$

108,912

$

8,113

Diluted Earnings Per Share

 

 

 

 

 

 

Continuing operations

$

3.21

$

3.05

$

0.16

Discontinued operations

 

(0.01)

 

0.03

 

(0.04)

Net Income

$

3.20

$

3.08

$

0.12

Basic Earnings Per Share

 

 

 

 

 

 

Continuing operations

$

3.24

$

3.07

$

0.17

Discontinued operations

 

-

 

0.04

 

(0.04)

Net Income

$

3.24

$

3.11

$

0.13

Diluted Avg. Common Shares Outstanding

 

36,539

 

35,366

 

1,173

Basic Avg. Common Shares Outstanding

 

36,169

 

35,045

 

1,124

Dividends Per Share

$

0.7475

$

0.725

$

0.0225

 

 

 

Selected Business Segment Data (Unaudited)

For the 3 months ending September 30, 2004 and 2003

3rd Quarter

(in thousands, except sales price data)

 

2004

 

2003

 

Change

Oil and Gas Operations

 

 

 

 

 

 

Operating revenues

 

 

 

 

 

 

Natural gas

$

69,900

$

59,627

$

10,273

Oil

 

24,553

 

21,213

 

3,340

Natural gas liquids

 

9,065

 

6,245

 

2,820

Other

 

818

 

909

 

(91)

Total

$

104,336

$

87,994

$

16,342

Production volumes from continuing operations

 

 

 

 

 

 

Natural gas (MMcf)

 

14,657

 

13,954

 

703

Oil (MBbl)

 

854

 

838

 

16

Natural gas liquids (MMgal)

 

18.2

 

16.6

 

1.6

Production volumes from continuing ops. (MMcfe)

 

22,374

 

21,352

 

1,022

Total sales volume (MMcfe)

 

22,374

 

21,359

 

1,015

Average sales price from continuing ops.

 

 

 

 

 

 

Natural gas (Mcf)

$

4.77

$

4.27

$

0.50

Oil (barrel)

$

28.76

$

25.30

$

3.46

Natural gas liquids (gallon)

$

0.50

$

0.38

$

0.12

Other data

 

 

 

 

 

 

Lease operating expense (LOE)

 

 

 

 

 

 

LOE and other

$

22,076

$

16,666

$

5,410

Production taxes

9,576

6,764

2,812

Total

$

31,652

$

23,430

$

8,222

DD&A

$

20,911

$

19,818

$

1,093

Capital expenditures

$

288,585

$

31,972

$

256,613

Exploration expense

$

1,807

$

802

$

1,005

Operating income

$

42,673

$

38,958

$

3,715

Natural Gas Distribution

 

 

 

 

 

 

Operating revenues

 

 

 

 

 

 

Residential

$

33,860

$

32,997

$

863

Commercial and industrial - small

 

18,516

 

17,844

 

672

Transportation

 

8,838

 

8,264

 

574

Other

 

948

 

(958)

 

1,906

Total

$

62,162

$

58,147

$

4,015

Gas delivery volumes (MMcf)

 

 

 

 

 

 

Residential

 

1,874

 

1,934

 

(60)

Commercial

 

1,570

 

1,625

 

(55)

Transportation

 

12,790

 

13,449

 

(659)

Total

 

16,234

 

17,008

 

(774)

Other data

 

 

 

 

 

 

Depreciation and amortization

$

9,985

$

9,385

$

600

Capital expenditures

$

11,869

$

13,177

$

(1,308)

Operating income

$

(10,130)

$

(9,575)

$

(555)

 

Selected Business Segment Data (Unaudited)

For the 9 months ending September 30, 2004 and 2003

 

Year-to-date

 

 

(in thousands, except sales price data)

 

2004

 

2003

 

Change

Oil and Gas Operations

 

 

 

 

 

 

Operating revenues

 

 

 

 

 

 

Natural gas

$

200,784

$

178,162

$

22,622

Oil

 

70,266

 

65,119

 

5,147

Natural gas liquids

 

22,220

 

18,896

 

3,324

Other

 

2,726

 

4,119

 

(1,393)

Total

$

295,996

$

266,296

$

29,700

Production volume from continuing operations

 

 

 

 

 

 

Natural gas (MMcf)

 

42,148

 

41,469

 

679

Oil (MBbl)

 

2,558

 

2,539

 

19

Natural gas liquids (MMgal)

 

50.3

 

49.5

 

0.8

Production volumes from continuing ops. (MMcfe)

 

64,684

 

63,779

 

905

Total sales volume (MMcfe)

 

64,684

 

64,513

 

171

Average sales price from continuing ops.

 

 

 

 

 

 

Natural gas (Mcf)

$

4.76

$

4.30

$

0.46

Oil (barrel)

$

27.47

$

25.64

$

1.83

Natural gas liquids (gallon)

$

0.44

$

0.38

$

0.06

Other data

 

 

 

 

 

 

Lease operating expense (LOE)

 

 

 

 

 

 

LOE and other

$

58,351

$

48,008

$

10,343

Production taxes

 

26,287

 

20,721

 

5,566

Total

$

84,638

$

68,729

$

15,909

DD&A

$

59,106

$

59,941

$

(835)

Capital expenditures

$

359,993

$

112,994

$

246,999

Exploration expense

$

1,907

$

980

$

927

Operating income

$

128,553

$

121,649

$

6,904

Natural Gas Distribution

 

 

 

 

 

 

Operating revenues

 

 

 

 

 

 

Residential

$

267,164

$

246,382

$

20,782

Commercial and industrial - small

 

107,692

 

97,556

 

10,136

Transportation

 

29,316

 

28,062

 

1,254

Other

 

5,936

 

1,534

 

4,402

Total

$

410,108

$

373,534

$

36,574

Gas delivery volumes (MMcf)

 

 

 

 

 

 

Residential

 

20,743

 

21,851

 

(1,108)

Commercial

 

9,845

 

9,998

 

(153)

Transportation

 

40,571

 

41,627

 

(1,056)

Total

 

71,159

 

73,476

 

(2,317)

Other data

 

 

 

 

 

 

Depreciation and amortization

$

29,453

$

27,532

$

1,921

Capital expenditures

$

42,090

$

42,158

$

(68)

Operating income

$

56,459

$

54,613

$

1,846

 

Selected Business Segment Data (Unaudited)

For the 12 months ending September 30, 2004 and 2003

Trailing 12 Months

(in thousands, except sales price data)

 

2004

 

2003

 

Change

Oil and Gas Operations

 

 

 

 

 

 

Operating revenues

 

 

 

 

 

 

Natural gas

$

258,272

$

220,788

$

37,484

Oil

 

92,347

 

86,871

 

5,476

Natural gas liquids

 

29,214

 

25,932

 

3,282

Other

 

2,990

 

5,182

 

(2,192)

Total

$

382,823

$

338,773

$

44,050

Production volumes from continuing operations

 

 

 

 

 

 

Natural gas (MMcf)

 

56,112

 

53,479

 

2,633

Oil (MBbl)

 

3,430

 

3,374

 

56

Natural gas liquids (MMgal)

 

67.4

 

69.1

 

(1.7)

Production volumes from continuing ops. (MMcfe)

 

86,327

 

83,591

 

2,736

Total sales volume (MMcfe)

 

86,328

 

85,114

 

1,214

Average sales price from continuing ops.

 

 

 

 

 

 

Natural gas (Mcf)

$

4.60

$

4.13

$

0.47

Oil (barrel)

$

26.92

$

25.75

$

1.17

Natural gas liquids (gallon)

$

0.43

$

0.38

$

0.05

Other data

 

 

 

 

 

 

Lease operating expense (LOE)

 

 

 

 

 

 

LOE and other

$

78,263

$

66,194

$

12,069

Production taxes

33,297

26,134

7,163

Total

$

111,560

$

92,328

$

19,232

DD&A

$

78,852

$

77,085

$

1,767

Capital expenditures

$

346,699

$

176,632

$

170,067

Exploration expense

$

1,980

$

2,281

$

(301)

Operating income

$

160,496

$

146,393

$

14,103

Natural Gas Distribution

 

 

 

 

 

 

Operating revenues

 

 

 

 

 

 

Residential

$

341,720

$

312,154

$

29,566

Commercial and industrial - small

 

136,775

 

122,252

 

14,523

Transportation

 

39,503

 

38,192

 

1,311

Other

 

7,675

 

2,911

 

4,764

Total

$

525,673

$

475,509

$

50,164

Gas delivery volumes (MMcf)

 

 

 

 

 

 

Residential

 

26,141

 

28,205

 

(2,064)

Commercial

 

12,411

 

12,843

 

(432)

Transportation

 

54,567

 

56,786

 

(2,219)

Total

 

93,119

 

97,834

 

(4,715)

Other data

 

 

 

 

 

 

Depreciation and amortization

$

39,092

$

36,179

$

2,913

Capital expenditures

$

57,835

$

58,905

$

(1,070)

Operating income

$

68,694

$

65,361

$

3,333

EX-99.1 3 exhibit991.htm ENERGEN CORPORATION PRESS RELEASE 9/30/04 Energen Corporation (NYSE: EGN)

 

 

For Immediate Release: Wednesday, October 27, 2004

 

For More Information: Julie S. Ryland, (205) 326-8421

 

ENERGEN RAISES 2004 EARNINGS GUIDANCE

Third Quarter 2004 Results Up 15.6%

Birmingham, Alabama - Energen Corporation (NYSE: EGN) today reported that third quarter 2004 earnings from continuing operations increased 15.6 percent over the same period last year to total $13.7 million, or $0.37 per diluted share. The Company also announced that it is raising its 2004 earnings guidance by 20 cents per diluted share.

Energen increased its 2004 earnings guidance to a range of $3.45-$3.55 per diluted share. "This increase certainly reflects our solid year-to-date results. It also reflects our belief that natural gas, oil and natural gas liquids (NGL) prices in the last quarter of 2004 are going to be significantly higher than we had assumed in our earlier guidance," said Mike Warren, Energen's chairman and chief executive officer.

Embedded in Energen's new earnings guidance for 2004 is the Company's revised assumption that prices applicable to its unhedged estimated production for the remainder of 2004 will average $7.00 per thousand cubic feet (Mcf) of natural gas (NYMEX), $50.00 per barrel of oil (NYMEX), and $0.67 per gallon of NGL.

Warren added that Energen is not changing its earnings guidance for 2005 at this time, pending completion of the Company's formal budgeting process in December. Embedded in the existing guidance are underlying assumptions for natural gas, oil and NGL prices applicable to its unhedged estimated production in 2005 that are significantly below current market expectations; these assumed prices are $5.25 per Mcf (NYMEX), $28 per barrel (NYMEX) and $0.467 per gallon, respectively.

 "Even at these relatively low commodity price assumptions, Energen's 2005 earnings guidance indicates that we have the potential for solid, double-digit year-over-year earnings growth," Warren said. "We believe that is a good reflection of Energen's strong, base-business operations."

In maintaining its current guidance for 2005 at $3.80-$4.00 per diluted share, Energen's management noted that the estimated earnings impact of commodity price changes is routinely disclosed (see page 10 of this release) and can be used to calculate the upside earnings potential from higher commodity prices. Current strip quotes for natural gas, oil and NGL in 2005 are approximately $7.50 per Mcf, $49.00 per barrel and $0.70 per gallon, respectively. Based on Energen's earnings' sensitivities to pricing, average NYMEX prices at these levels in 2005 could generate an additional $1 of earnings, bringing Energen's net income potential to a range of $4.80-$5.00 per diluted share.

RESULTS OF THIRD QUARTER 2004

Energen's 2004 third quarter net income and income from continuing operations of $13.7 million, or $0.37 per diluted share, compared with prior-year third quarter net income of $11.9 million, or $0.33 per diluted share, and prior-year income from continuing operations of $11.5 million, or $0.32 per diluted share.

Energen Resources

Third quarter 2004 income from continuing operations at Energen Resources Corporation, Energen's oil and gas acquisition and development subsidiary, totaled $21.7 million and compared with income from continuing operations of $19.9 million in the same period last year. Energen Resources' earnings benefited from higher realized sales prices and increased production. At the same time, Energen Resources was affected by increased lease operating expense (LOE), including production taxes, and higher administrative expenses.

The Company's average realized sales prices for its production were as follows:

Commodity

Price per Unit

Percent Change

3Q 2004

3Q 2003

Natural Gas (Mcf)

$4.77

$4.27

11.7

Oil (Barrel)

$28.76

$25.30

13.7

NGL (Gallon)

$0.50

$0.38

31.6

Note: Average realized sales prices reflect the impact of all hedges, basis differentials and NGL transportation and fractionation fees; they are not NYMEX-equivalent prices.

Energen Resources' production from continuing operations in the third quarter of 2004 totaled 22.4 billion cubic feet equivalent (Bcfe), reflecting a 5 percent increase from the prior-year third quarter. The higher production largely is the result of Energen Resources' acquisition in early August 2004 of coalbed methane properties in the San Juan Basin as well as down-spacing operations in the Black Warrior and San Juan basins.

The break-down of production by commodity is as follows:

Commodity

Production

Percent Change

3Q 2004

3Q 2003

Natural Gas (MMcf)

14,657

13,954

5.0

Oil (MBbl)

854

838

1.9

NGL (MMgal)

18.2

16.6

9.6

 

 

 

 

 

 

Energen Resources' per-unit LOE in the current-year third quarter increased 28 percent to $1.41 per Mcf equivalent (Mcfe) due to higher production taxes resulting from increased commodity prices as well as to increased expenses associated with new environmental regulations, increased work-over and maintenance expenses and higher ad valorem taxes.

At $0.91 per Mcfe, Energen Resources' DD&A expense from oil and gas activities was unchanged from the third quarter last year.

Alagasco

Energen's natural gas distribution company, Alagasco, reported a net loss of $7.75 million for the third quarter. This compared with a net loss of $7.78 million in the same period last year. Alagasco typically records a loss in the third quarter, reflecting the seasonal nature of its business.

RESULTS OF YEAR-TO-DATE 2004

Energen's 2004 year-to-date net income and income from continuing operations totaled $96.2 million, or $2.63 per diluted share. For the same period last year, Energen's net income totaled $89.8 million, or $2.53 per diluted share, and income from continuing operations was $89.2 million, or $2.51 per diluted share.

 Energen Resources

Energen Resources' year-to-date income from continuing operations increased 7.4 percent to $66.7 million from $62.1 million in the same period last year. The impact of increased commodity prices more than offset the impact of the timing of mark-to-market derivatives and higher LOE and administrative expense.

The Company's average realized sales prices for its production were as follows:

Commodity

Price per Unit

Percent Change

Jan-Sep 2004

Jan-Sep 2003

Natural Gas (Mcf)

$4.76

$4.30

10.7

Oil (Barrel)

$27.47

$25.64

7.1

NGL (Gallon)

$0.44

$0.38

15.8

Note: Average realized sales prices reflect the impact of all hedges, basis differentials and NGL transportation and fractionation fees; they are not NYMEX-equivalent prices.

Energen Resources' production from continuing operations in the first nine months of 2004 totaled 64.7 Bcfe, up slightly from the 63.8 Bcfe of production from continuing operations in the same period last year.

The break-down of production by commodity is as follows:

Commodity

Production

Percent Change

Jan-Sep 2004

Jan-Sep 2003

Natural Gas (MMcf)

42,148

41,469

1.6

Oil (MBbl)

2,558

2,539

0.7

NGL (MMgal)

50.3

49.5

1.6

 

 

 

 

 

 

The year-to-date 2004 impact of marking to market certain of Energen Resources' open fourth quarter hedge contracts was a net loss of $2.2 million, or 6 cents per diluted share, as compared with $0.1 million in the same period last year. Year-end results are not expected to be affected negatively by this item.

The per-unit LOE in the current year-to-date period increased 21 percent to $1.31 per Mcfe due to higher production taxes resulting from increased commodity prices as well as to increased expenses associated with new environmental regulations, increased work-over and maintenance expenses and higher ad valorem taxes. DD&A expense from oil and gas activities declined 2 percent from the same period last year to $0.89 per Mcfe.

Alagasco

Alagasco's natural gas distribution operations earned net income in the first nine months of 2004 of $29.1 million as compared with $27.8 million in the same period last year. This increase in earnings largely reflects the utility's ability to earn on a higher level of equity representing investment in utility plant.

RESULTS OF 12 MONTHS ENDING SEPTEMBER 30

For the 12 months ended September 30, 2004, Energen's net income totaled $117.0 million, or $3.20 per diluted share, as compared with $108.9 million, or $3.08 per diluted share, in the same period a year ago. Income from continuing operations totaled $117.2 million, or $3.21 per diluted share. This compared with income from continuing operations of $107.7 million, or $3.05 per diluted share, in the same period a year ago.

Energen Resources

Increased commodity prices and production helped generate for Energen Resources an 8 percent increase in income from continuing operations for the trailing 12-months' period as compared with the same period a year ago. Income from continuing operations in the current-year period totaled $83.1 million and compared with prior-year 12 months' results of $76.7 million.

The Company's average realized sales prices for its production were as follows:

Commodity

Price per Unit

Percent Change

Oct 03-Sep 04

Oct 02-Sep 03

Natural Gas (Mcf)

$4.60

$4.13

11.4

Oil (Barrel)

$26.92

$25.75

4.5

NGL (Gallon)

$0.43

$0.38

13.2

 

 

 

 

 

 

 

Note: Average realized sales prices reflect the impact of all hedges, basis differential and NGL transportation and fractionation fees; they are not NYMEX-equivalent prices.

 

Energen Resources' production from continuing operations for the trailing 12-months' period totaled 86.3 Bcfe as compared with 83.6 Bcfe in the same period a year ago.

The break-down of production by commodity is as follows:

Commodity

Production

Percent Change

Oct 03-Sep 04

Oct 02-Sep 03

Natural Gas (MMcf)

56,112

53,479

4.9

Oil (MBbl)

3,430

3,374

1.7

NGL (MMgal)

67.4

69.1

(2.5)

 

 

 

 

 

 

Energen Resources' per-unit LOE in the current trailing 12-months' period increased 17 percent to $1.29 per Mcfe and includes a 26 percent rise in production taxes resulting from higher commodity prices. For the 12 months ended September 30, 2004, Energen Resources' DD&A expense from oil and gas activities of $0.89 per Mcfe was down slightly from the $0.90 per Mcfe in same period last year.

Alagasco

For the 12 months ending September 30, 2004, Alagasco earned net income of $34.3 million as compared with $31.6 million in the same period last year. This increase in earnings largely reflects the utility's ability to earn on a higher level of equity representing investment in utility plant.

For the rate year ended September 30, 2004, Alagasco earned a return of 13.1 percent on 13-month average equity of $261.9 million. The utility earned just under its allowed return range of 13.15-13.65 percent as a result of its operations and maintenance expenses exceeding the inflation-based cost control provision of its rate-setting mechanism.

2004 EARNINGS GUIDANCE

Energen's management increased its 2004 earnings guidance to a range of $3.45- $3.55 per diluted share. This compares with previous guidance of $3.25-$3.35 per diluted share. Energen's assumed NYMEX prices for unhedged natural gas, oil and NGL production for the remainder of the year are an average of $7.00 per Mcf (including October, for which the actual NYMEX price was $5.72 per Mcf), $50.00 per barrel and $0.67 per gallon, respectively.

For the fourth quarter of 2004, Energen estimates that its earnings will range from $0.85-$0.90 per diluted share. Diluted average shares outstanding in the last quarter are estimated to be 36.7 million.

For the remaining three months of 2004, Energen Resources' hedge position is as follows:

Commodity

Vol. Hedged

Estimated Production

% Hedged

NYMEX-equiv. price

Natural Gas

12 Bcf

14.8 Bcf

82%

$5.10 per Mcf

Oil

707 MBbl

879 MBbl

80%

$30.03 per barrel

NGL

9.3 MMgal

19.5 MMgal

48%

$0.412 per gallon

 

For the remaining three months of 2004, Energen Resources' natural gas hedge position by hedge type is as follows:

Hedge Type

Volumes (Bcf)

Assumed Basis Difference*

Price/Mcf (NYMEX equiv)

NYMEX Hedges

5.2

$5.09

NYMEX Collars

0.6

$4.05 floor/$4.44 ceiling

San Juan Basin-specific

4.9

$0.79

$5.02

Permian Basin-specific

1.4

$0.35

$5.67

* Assumed basis differentials were used to calculate NYMEX-equivalent prices for November and December; actual basis differentials were used for October.

 

For the remaining three months of 2004, Energen Resources' oil hedge position by hedge type is as follows:

Hedge Type

Volumes (MBbl)

Assumed Sour Oil Difference*

Price/Barrel (NYMEX equiv)

NYMEX Hedges

357

$28.38

Sour Oil (WTS)

350

$3.69

$31.72

* Assumed sour oil differential was used to calculate NYMEX-equivalent prices for November and December; the actual sour oil differential was used for October.

Realized prices for Energen Resources' production associated with NYMEX contracts and collars as well as for unhedged production will reflect the impact of basis differentials. For production associated with basin-specific contracts, Energen Resources will receive the contracted hedge price, regardless of basis differentials. 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. Realized NGL prices will reflect transportation and fractionation fees.

Other key assumptions in Energen's 2004 guidance, which takes into account year-to-date results, include:

  • Estimated production of 87.5 Bcfe, including 57 Bcf of natural gas, 3.4 MMBbl of oil, and 70 MMgal of NGL.
  • Average diluted shares outstanding of 36,650,000.
  • Alagasco's utility operations earning a return on equity at the end of the year of some 13.1 percent on average equity of approximately $264 million.
  • A DD&A rate from oil and gas activities of approximately $0.91 per Mcfe and LOE (including production taxes) of approximately $1.33 per Mcfe.

Earnings Sensitivities to Commodity Price Changes

The largest influences on Energen's financial results typically are the commodity prices applicable to the company's unhedged production. Given Energen Resources' year-to-date performance, hedge position for the remainder of 2004, and assumed prices for its unhedged production as well as the actual NYMEX price of gas for October, Energen's earnings' sensitivities to commodity price changes for the remainder of the year are as follows:

Relative to the Company's remaining unhedged volumes:

  • Every 10-cent change in the average NYMEX price of gas from $7.00 per Mcf represents an estimated net income impact of approximately $65,000 (0.2 cents per diluted share).
  • Every $1 change in the average NYMEX price of oil from $50.00 per barrel represents an estimated net income impact of approximately $100,000 (0.3 cents per diluted share).
  • Every 1-cent change in average price of NGL from $0.67 per gallon represents an estimated net income impact of approximately $50,000 (0.1 cents per diluted share).

Price-related events such as substantial basis differential changes could cause earnings sensitivities to be materially different from those outlined above.

2005 EARNINGS GUIDANCE

Energen's management is not adjusting the Company's earnings guidance for 2005 at this time, pending completion of the budgeting process in December 2004. Included in the Company's existing guidance of $3.80-$4.00 per diluted share is an estimated $0.07 per diluted share from an unidentified acquisition of $200 million in the fourth quarter.

The Company's existing guidance for 2005 earnings also assumes that prices applicable to Energen Resources' unhedged production in 2005 will average $5.25 per Mcf for gas, $28.00 per barrel for oil, and $0.467 per gallon for NGL.

Energen Resources' hedge position for 2005 is as follows:

Commodity

Volumes

Estimated Production

% Hedged

NYMEX-equiv. price

Natural Gas

35.4 Bcf

60.8 Bcf*

58.0 Bcf**

58%*

61%**

$5.70 per Mcf

Oil

2.3 MMBbl

3.5 MMBbl

65%

$33.25 per barrel

NGL

30.2 MMgal

79 MMgal*

78 MMgal**

38%*

40%**

$0.485 per gallon

* With unidentified 4th quarter 2005 acquisition

** Without unidentified 4th quarter 2005 acquisition

Energen Resources' 2005 natural gas hedge position by hedge type is as follows:

Hedge Type

Volumes (Bcf)

Assumed Basis Difference*

Price/Mcf (NYMEX equiv)

NYMEX Hedges

16.4

$5.98

San Juan Basin-specific

15.5

$0.80

$5.33

Permian Basin-specific

1.8

$0.35

$5.96

SNG-LA Basin-specific

1.6

$0.04

$6.13

* Assumed basis differentials have been used to calculate NYMEX-equivalent prices.

 

Energen Resources' 2005 oil hedge position by hedge type is as follows:

Hedge Type

Volumes (MBbl)

Assumed Sour Oil Difference*

Price/Barrel (NYMEX equiv)

NYMEX Hedges

535

$31.20

Sour Oil (WTS)

1,723

$2.90

$33.89

* Assumed sour oil differential has been used to calculate the NYMEX-equivalent price.

Realized prices for Energen Resources' production associated with NYMEX contracts as well as for unhedged production will reflect the negative impact of basis differentials. For production associated with basin-specific contracts, Energen Resources will receive the contracted hedge price, regardless of basis differentials. 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. Realized NGL prices will reflect transportation and fractionation fees.

Earnings Sensitivities to Commodity Price Changes

While there are many factors that affect Energen Resources' financial results, the largest influences typically are the commodity prices applicable to the company's unhedged production. Given Energen Resources' current hedge position for 2005 and assuming prices (as outlined above) for its unhedged production (excluding volumes from unidentified acquisitions), the sensitivities to pricing changes applicable to Energen's existing earnings guidance for 2005 are as follows:

Relative to the company's unhedged volumes in 2005 (excluding production from unidentified acquisitions):

  • Every 10-cent change in the average NYMEX price of gas from $5.25 per Mcf represents an estimated net income impact of approximately $850,000 (2.3 cents per diluted share).
  • Every $1.00 change in the average NYMEX price of oil from $28.00 per barrel represents an estimated net income impact of approximately $700,000 (1.9 cents per diluted share).
  • Every 1-cent change in average price of NGL from $0.467 per gallon represents an estimated net income impact of approximately $165,000 (0.4 cents per diluted share).

Price-related events such as substantial basis differential changes could cause earnings sensitivities to be materially different from those outlined above.

The assumptions used in developing Energen's existing guidance are subject to change as the Company's works through its 2005 budgeting process. The key assumptions that support existing guidance include:

  • Total production of approximately 93 Bcfe, including approximately 3 Bcfe attributable to an unidentified acquisition in the fourth quarter of 2005.
  • Average diluted shares outstanding of 36,835,000.
  • Alagasco's earning a return on average equity of 13.15-13.65 percent on average equity of approximately $270 million.
  • A DD&A rate at Energen Resources of approximately $0.95 per Mcfe and LOE (including production taxes) of approximately $1.30 per Mcfe.
  • Capital spending at Energen Resources of approximately $200 million for property acquisitions and approximately $75 million for development; and capital spending at Alagasco of approximately $55 million.

Energen Corporation is a diversified energy holding company with headquarters in Birmingham, Alabama. Its two lines of business are the acquisition and development of natural gas, oil and natural gas liquids onshore in North America and natural gas distribution in central and north Alabama. Additional information on Energen is available at www.energen.com.

FORWARD-LOOKING STATEMENTS

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 discussion of ri sks and uncertainties, which could affect future results of Energen and its subsidiaries, is included in the Company's periodic reports filed with the Securities and Exchange Commission.

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