ACQUISITION AND DISPOSITION OF PROPERTIES

During 2017, Energen completed a total of $273.3 million in various purchases and renewals of unproved acquisitions, which are accounted for as asset acquisitions, including approximately $217.4 million in the Delaware Basin and approximately $36.9 million in the Midland Basin for unproved leasehold and $19.0 million for mineral purchases primarily in the Delaware Basin. Energen completed an estimated $143.7 million in various purchases and renewals of unproved leasehold largely in the Permian Basin, including approximately $77 million of acreage purchased in Lea County, New Mexico, during 2016. Energen completed an estimated total of $85.7 million in various purchases of unproved leasehold largely in the Permian Basin during 2015.

During 2016, Energen completed a series of asset sales of certain non-core Permian Basin assets in the Delaware Basin in Texas and in the San Juan Basin in New Mexico for an aggregate purchase price of $552 million. These transactions had closing dates of June 3, June 7, June 30, July 15 and August 9 of 2016 with various effective dates ranging from March 1, 2016 to June 30, 2016. Minor portions of the assets were transferred to other parties upon the exercise of preferential purchase rights under pre-existing joint operating agreements in the ordinary course of business. Pre-tax proceeds to Energen were approximately $532.2 million after purchase price adjustments of approximately $19 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 to the buyer, but before consideration of transaction costs of approximately $5 million. Energen recognized pre-tax post-closing adjustment losses of $0.6 million in 2017 and pre-tax gains of $246.3 million in 2016 on the sales. Energen used the proceeds from the sale to fund ongoing operations.

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 the 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.