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Derivative Commodity Instruments (Tables)
 6 Months Ended
Jun. 30, 2012
Derivative [Line Items]  
Schedule of Fair Values of Commodity Contracts by business Segment on Balance Sheet
The following tables detail the fair values of commodity contracts by business segment on the balance sheets:

(in thousands)
June 30, 2012
 
Oil and Gas Operations
 
Natural Gas Distribution

Total
Derivative assets or (liabilities) designated as hedging instruments
 
 
 
 
Accounts receivable
$
102,499

 
$
—

$
102,499

Long-term asset derivative instruments
85,205

 
—

85,205

Total derivative assets
187,704

 
—

187,704

Accounts receivable
(13,592
)
*
—

(13,592
)
Long-term asset derivative instruments
(11,831
)
*
—

(11,831
)
Accounts payable
(3,940
)
 
—

(3,940
)
Long-term liability derivative instruments
(45
)
 
—

(45
)
Total derivative liabilities
(29,408
)
 
—

(29,408
)
Total derivatives designated
158,296

 
—

158,296

Derivative assets or (liabilities) not designated as hedging instruments
 
 
 
 
Accounts receivable
14,256

 
—

14,256

Long-term asset derivative instruments
29,899

 
—

29,899

Total derivative assets
44,155

 
—

44,155

Accounts payable
1,834

*
(30,574
)
(28,740
)
Total derivative liabilities
1,834

 
(30,574
)
(28,740
)
Total derivatives not designated
45,989

 
(30,574
)
15,415

Total derivatives
$
204,285

 
$
(30,574
)
$
173,711


(in thousands)
December 31, 2011
 
Oil and Gas Operations
 
Natural Gas Distribution

Total
Derivative assets or (liabilities) designated as hedging instruments
 
 
 
 
Accounts receivable
$
73,636

 
$
—

$
73,636

Long-term asset derivative instruments
75,982

 
—

75,982

Total derivative assets
149,618

 
—

149,618

Accounts receivable
(48,174
)
*
—

(48,174
)
Long-term asset derivative instruments
(36,341
)
*
—

(36,341
)
Accounts payable
(37,070
)
 
—

(37,070
)
Long-term liability derivative instruments
(20,386
)
 
—

(20,386
)
Total derivative liabilities
(141,971
)
 
—

(141,971
)
Total derivatives designated
7,647

 
—

7,647

Derivative assets or (liabilities) not designated as hedging instruments
 
 
 
 
Accounts receivable
(3,670
)
*
—

(3,670
)
Long-term asset derivative instruments
(8,585
)
*
—

(8,585
)
Total derivative assets
(12,255
)
 
—

(12,255
)
Accounts payable
(13,416
)
 
(56,804
)
(70,220
)
Long-term liability derivative instruments
(10,922
)
 
(3,070
)
(13,992
)
Total derivative liabilities
(24,338
)
 
(59,874
)
(84,212
)
Total derivatives not designated
(36,593
)
 
(59,874
)
(96,467
)
Total derivatives
$
(28,946
)
 
$
(59,874
)
$
(88,820
)

* Amounts classified in accordance with accounting guidance which permits offsetting fair value amounts recognized for multiple derivative instruments executed with the same counterparty under a master netting arrangement.
Schedule of Cash Flow Hedging Relationships on Financial Statements
The following table details the effect of derivative commodity instruments in cash flow hedging relationships on the financial statements:

(in thousands)
Location on Income Statement
Three months
ended
June 30, 2012
Three months
ended
June 30, 2011
Gain recognized in OCI on derivative (effective portion), net of tax of $68.7 million and $30.3 million
—
$
112,158

$
49,449

Gain (loss) reclassified from accumulated OCI into income (effective portion)
Operating revenues
$
21,143

$
(5,770
)
Gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Operating revenues
$
4,336

$
(740
)

(in thousands)
Location on Income Statement
Six months
ended
June 30, 2012
Six months
ended
June 30, 2011
Gain (loss) recognized in OCI on derivative (effective portion), net of tax of $61.2 million and ($29.1) million
—
$
99,923

$
(47,425
)
Gain reclassified from accumulated OCI into income (effective portion)
Operating revenues
$
23,013

$
1,821

Gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Operating revenues
$
1,669

$
(2,391
)
Schedule of Derivatives Not Designated as Hedging Instruments on Income Statements
The following table details the effect of derivative commodity instruments not designated as hedging instruments on the income statements:

(in thousands)
Location on Income Statement
Three months
ended
June 30, 2012
Three months
ended
June 30, 2011
Gain (loss) recognized in income on derivative
Operating revenues
$
123,448

$
(1
)

(in thousands)
Location on Income Statement
Six months
ended
June 30, 2012
Six months
ended
June 30, 2011
Gain (loss) recognized in income on derivative
Operating revenues
$
79,443

$
(1
)
Schedule of Hedging Transactions
Energen Resources entered into the following transactions for the remainder of 2012 and subsequent years:

Production Period
Total Hedged Volumes
Average Contract
Price

Description
Natural Gas
 
 
 
2012
6.7
 Bcf
$4.62 Mcf
NYMEX Swaps
 
18.1
 Bcf
$4.15 Mcf
Basin Specific Swaps - San Juan
 
3.0
 Bcf
$2.89 Mcf
Basin Specific Swaps - Permian
2013
12.7
 Bcf
$4.82 Mcf
NYMEX Swaps
 
32.8
 Bcf
$4.56 Mcf
Basin Specific Swaps - San Juan
 
4.6
 Bcf
$3.45 Mcf
Basin Specific Swaps - Permian
2014
9.1
 Bcf
$4.65 Mcf
NYMEX Swaps
 
25.7
 Bcf
$4.72 Mcf
Basin Specific Swaps - San Juan
 
4.6
 Bcf
$3.79 Mcf
Basin Specific Swaps - Permian
Oil
 
 
 
2012
3,613
 MBbl
$88.53 Bbl
NYMEX Swaps
2013
8,098
 MBbl
$90.65 Bbl
NYMEX Swaps
2014
7,892
 MBbl
$92.70 Bbl
NYMEX Swaps
Oil Basis Differential
 
 
 
2012
1,523
 MBbl
$(2.95) Bbl
WTS/WTI Basis Swaps*
2013
2,768
 MBbl
$(3.40) Bbl
WTS/WTI Basis Swaps*
Natural Gas Liquids
 
 
 
2012
30.0
 MMGal
$0.98 Gal
Liquids Swaps
2013
44.5
 MMGal
$1.02 Gal
Liquids Swaps
*WTS - West Texas Sour/Midland, WTI - West Texas Intermediate/Cushing
 
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following sets forth derivative assets and liabilities that were measured at fair value on a recurring basis:

 
June 30, 2012
(in thousands)
Level 2*
Level 3*
Total
Current assets
$
42,528

$
60,635

$
103,163

Noncurrent assets
59,468

43,805

103,273

Current liabilities
(32,185
)
(495
)
(32,680
)
Noncurrent liabilities
444

(489
)
(45
)
Net derivative asset
$
70,255

$
103,456

$
173,711


 
December 31, 2011
(in thousands)
Level 2*
Level 3*
Total
Current assets
$
(14,843
)
$
36,635

$
21,792

Noncurrent assets
(8,382
)
39,438

31,056

Current liabilities
(98,468
)
(8,822
)
(107,290
)
Noncurrent liabilities
(32,928
)
(1,450
)
(34,378
)
Net derivative asset (liability)
$
(154,621
)
$
65,801

$
(88,820
)

* Amounts classified in accordance with accounting guidance which permits offsetting fair value amounts recognized for multiple derivative instruments executed with the same counterparty under a master netting arrangement.
Schedule of Changes in Fair Value of Derivative Instruments Classified as Level 3
The tables below set forth a summary of changes in the fair value of the Company’s Level 3 derivative commodity instruments as follows:

 
Three months ended
Three months ended
(in thousands)
June 30, 2012
June 30, 2011
Balance at beginning of period
$
104,923

$
16,927

Realized gains
4,858

1,204

Unrealized gains relating to instruments held at the reporting date
12,970

7,720

Settlements during period
(19,295
)
(12,405
)
Balance at end of period
$
103,456

$
13,446



 
Six months ended
Six months ended
(in thousands)
June 30, 2012
June 30, 2011
Balance at beginning of period
$
65,801

$
42,755

Realized gains
4,858

1,204

Unrealized gains (losses) relating to instruments held at the reporting date
67,209

(3,554
)
Settlements during period
(34,412
)
(26,959
)
Balance at end of period
$
103,456

$
13,446
Schedule of Fair Value Inputs, Derivatives, Quantitative Information
The tables below set forth quantitative information about the Company’s Level 3 fair value measurements of derivative commodity instruments as follows:

(in thousands)
Fair Value as of June 30, 2012
Valuation Technique*
Unobservable Input*
Range
Natural Gas Basis - San Juan
 
 
 
 
2012
$
24,620

Discounted Cash Flow
Forward Basis
($0.13 - $0.16) Mcf
2013
$
36,216

Discounted Cash Flow
Forward Basis
($0.13 - $0.17) Mcf
2014
$
22,498

Discounted Cash Flow
Forward Basis
($0.13 - $0.16) Mcf
Natural Gas Basis - Permian
 
 
 
 
2012
$
(24
)
Discounted Cash Flow
Forward Basis
($0.11) Mcf
2013
$
(2
)
Discounted Cash Flow
Forward Basis
($0.13) Mcf
2014
$
(105
)
Discounted Cash Flow
Forward Basis
($0.13) Mcf
Oil Basis - WTS/WTI
 
 
 
 
2012
$
2,116

Discounted Cash Flow
Forward Basis
($4.34 - $4.57) Bbl
2013
$
(1,997
)
Discounted Cash Flow
Forward Basis
($2.65) Bbl
Natural Gas Liquids
 
 
 
 
2012
$
8,617

Discounted Cash Flow
Forward Price
 $0.69 - $0.81 Gal
2013
$
11,517

Discounted Cash Flow
Forward Price
 $0.72 - $0.78 Gal
*Discounted cash flow represents an income approach in calculating fair value including the referenced unobservable input and a discount reflecting credit quality of the counterparty.
Alabama Gas Corporation
  
Derivative [Line Items]  
Schedule of Hedging Transactions
Alagasco entered into the following natural gas transactions for the remainder of 2012 and subsequent years:

Production Period
Total Hedged Volumes
 
Description
2012
7.6
 Bcf
 
NYMEX Swaps
2013
1.5
 Bcf
 
NYMEX Swaps