Stock Compensation

3 Months Ended

Mar. 31, 2014

Share-based Compensation [Abstract]

Stock Compensation

STOCK COMPENSATION

Stock Incentive Plan

Stock Options: The Stock Incentive Plan provides for the grant of incentive stock options and non-qualified stock options to officers and key employees. Options granted under the Stock Incentive Plan provide for the purchase of Company common stock at not less than the fair market value on the date the option was granted. The sale or transfer of the shares is limited during certain periods. All outstanding options vest within three years from date of grant and expire 10 years from the grant date. The Company granted 107,868 non-qualified option shares during the first quarter of 2014 with a grant-date fair value of $27.57.

Restricted Stock: Additionally, the Stock Incentive Plan provides for the grant of restricted stock units. In January 2014, the Company awarded 41,664 restricted stock units with a grant-date fair value of $70.68. These awards were valued based on the quoted market price of the Company’s common stock at the date of grant and have a three year vesting period.

Performance Share Awards: The Stock Incentive Plan also provides for the grant of performance share awards, with each unit equal to the market value of one share of common stock, to eligible employees based on predetermined Company performance criteria at the end of an award period. The Stock Incentive Plan provides that payment of earned performance share awards be made in the form of Company common stock. Performance share awards are valued using the Monte Carlo model which uses historical volatility and other variables to estimate the probability of satisfying the market condition of the award. The Company granted 287 performance share awards during the first quarter of 2014 with a two year vesting period and a grant-date fair value of $118.99. The Company also granted 63,842 performance share awards during the first quarter of 2014 with a three year award period and a grant-date fair value of $93.13.

Stock Appreciation Rights Plan

The Energen Stock Appreciation Rights Plan provides for the payment of cash incentives measured by the long-term appreciation of Company common stock. These awards are liability awards which settle in cash and are re-measured each reporting period until settlement and have a three year vesting period. The Company granted 62,749 awards during the first quarter of 2014. These awards had a fair value of $35.04 as of March 31, 2014.

Petrotech Incentive Plan

The Energen Resources’ Petrotech Incentive Plan provides for the grant of stock equivalent units. These awards are liability awards which are re-measured each reporting period and settle in cash at completion of the vesting period. During the first quarter of 2014, Energen Resources awarded 28,840 Petrotech units with a fair value of $79.18 as of March 31, 2014, none of which included a market condition. Also awarded were 36,920 Petrotech units which included a market condition and had a fair value of $115.94 as of March 31, 2014. These awards have a three year vesting period.

Stock Repurchase Program

During the three months ended March 31, 2014, the Company had non-cash purchases of approximately $0.3 million of Company common stock in conjunction with tax withholdings on its non-qualified deferred compensation plan and other stock compensation. The Company utilized internally generated cash flows in payment of the related tax withholdings.