ACQUISITION AND DISPOSITION OF PROPERTIES

In June 2016, Energen entered into a purchase and sale agreement to sell certain non-core Permian Basin assets in the Delaware Basin. This sale is expected to close during the third quarter of 2016 and have an effective date of June 1, 2016. Energen classified these properties as held for sale as of June 30, 2016.

In July 2016, Energen completed the sale of the remainder of its San Juan Basin assets in New Mexico for an aggregate purchase price of $77.5 million. This transaction had a closing date of July 15, 2016 with an effective date of March 1, 2016. Pre-tax proceeds to Energen were approximately $74.8 million after purchase price adjustments of approximately $2.7 million related to the operations of the properties subsequent to the effective dates and other one-time adjustments including certain amounts due the buyer, but before consideration of transaction costs of approximately $0.5 million. Energen will use proceeds from the sale to fund ongoing operations. Energen classified these properties as held for sale as of December 31, 2015.

Through June 30, 2016, Energen has completed a series of asset sales of certain non-core Permian Basin assets in the Delaware Basin in Texas for an aggregate purchase price of $294 million. These transactions had closing dates of June 3, 7 and 30 of 2016 with various effective dates ranging from March 1, 2016 to June 30, 2016. Pre-tax proceeds to Energen were approximately $284.8 million after purchase price adjustments of approximately $9.6 million related to the operations of the properties subsequent to the effective dates and other one-time adjustments including transfer payments and certain amounts due the buyer, but before consideration of transaction costs of approximately $2.5 million. Energen recognized pre-tax gains of $161.1 million on the sales. Energen used proceeds from the sales to fund ongoing operations.

Summarized below are the consolidated results of operations for the three months and six months ended June 30, 2016 and 2015, on an unaudited pro forma basis which gives effect to the series of asset sales in the Permian Basin (closed through June 30, 2016)as if they had occurred at the beginning of the earliest period presented. The pro forma financial information does not purport to be indicative of results of operations that would have occurred had the transaction occurred on the basis assumed above nor are they indicative of results of the future operations of the enterprises.



	Three months ended						Six months ended
	June 30,						June 30,
(in thousands, except per share data)	2016			2015			2016			2015
Total revenues	$	103,044		$	160,942		$	228,106		$	376,582
Net loss	$	(66,758	)	$	(104,664	)	$	(269,058	)	$	(118,817	)
Diluted earnings per average common share	$	(0.69	)	$	(1.42	)	$	(2.93	)	$	(1.62	)
Basic earnings per average common share	$	(0.69	)	$	(1.42	)	$	(2.93	)	$	(1.62	)

The following table details held for sale properties by major classes of assets and liabilities. These property sales do not qualify as discontinued operations:



(in thousands)							June 30, 2016
	Permian Basin			San Juan Basin			Total
Oil and natural gas properties	$	204,871		$	309,348		$	514,219
Less accumulated depreciation, depletion and amortization	(113,241		)	(224,064		)	(337,305		)
Total assets held for sale	91,630			85,284			176,914
Other long-term liabilities	(149		)	(13,130		)	(13,279		)
Total liabilities held for sale	(149		)	(13,130		)	(13,279		)
Total net assets held for sale	$	91,481		$	72,154		$	163,635



(in thousands)	December 31, 2015
	San Juan Basin
Inventories	$	3,651
Oil and natural gas properties	305,386
Less accumulated depreciation, depletion and amortization	(219,059		)
Other property and equipment, net	3,761
Total assets held for sale	93,739
Other long-term liabilities	(12,789		)
Total liabilities held for sale	(12,789		)
Total net assets held for sale	$	80,950

On March 31, 2015, Energen completed the sale of the majority of its natural gas assets in the San Juan Basin in New Mexico and Colorado (effective as of January 1, 2015) for an aggregate purchase price of $395 million. The sales proceeds were reduced by purchase price adjustments of approximately $11 million related to the operations of the San Juan Basin properties subsequent to December 31, 2014 and one-time adjustments related primarily to liabilities assumed by the buyer, which resulted in pre-tax proceeds to Energen of approximately $384 million before consideration of transaction costs of approximately $2.8 million. Energen recognized a pre-tax gain of $27.0 million on the sale. Energen used proceeds from the sale to reduce long-term indebtedness. At December 31, 2014, proved reserves associated with these San Juan Basin properties totaled 69,038 MBOE.

Energen completed an estimated $27.2 million in various purchases of unproved leasehold largely in the Permian Basin during the six months ended June 30, 2016. During the six months ended June 30, 2015, Energen completed an estimated total of $46.0 million in various purchases of unproved leasehold.