Higher Realized Prices, Increased Production Drive Energen's Earnings Growth Company Narrows 2007 Guidance Range, Raises 2008 Guidance
BIRMINGHAM, Ala.--(BUSINESS WIRE)--July 25, 2007--Energen
Corporation (NYSE: EGN) today attributed the 40 percent increase in
its second quarter 2007 earnings per diluted share (EPS) primarily to
higher realized sales prices for its natural gas, oil and natural gas
liquids (NGL) production. Energen's net income for the three months
ended June 30, 2007, totaled $67.9 million, or 94 cents per diluted
share, and compared favorably with net income of $49.6 million, or 67
cents per diluted share, in the same period a year ago.
Energen also announced today that the diversified energy company
is:
- Increasing by 1 billion cubic feet equivalent (Bcfe) its 2007
production estimate to 96 Bcfe;
- Increasing by 10 cents the lower end of its 2007 earnings
guidance to reflect a new, tighter range of $3.90 - $4.20 per
diluted share;
- Increasing by 5 cents its 2008 earnings guidance to a new
range of $3.65 - $4.05 per diluted share;
- Increasing its acreage position in Alabama shales; the Company
currently has 220,000 net acres under lease.
MANAGEMENT COMMENTS
"Energen has experienced a number of positive developments during
the first half of 2007," said James McManus, Energen's president and
chief executive officer. "Year-to-date earnings are very strong due to
higher realized sales prices and increased production. Energen remains
on track to realize its sixth consecutive year of record earnings.
"We are very pleased with the success we continue to have in the
San Juan Basin, where we are accelerating development largely through
horizontal drilling in the Fruitland Coal formation. At mid-year,
total production is outpacing our expectations, and we are pleased to
be able to increase our 2007 production estimate to 96 Bcfe," McManus
said.
"With almost 70 percent of our estimated production in 2007
already hedged at solid prices, our sensitivity to commodity price
changes is quite low; this fact, together with increased production,
has prompted us to narrow our earnings guidance range by raising the
bottom of the range 10 cents to $3.90 per diluted share," he added.
"During the second quarter of 2007, Energen increased its hedge
position for 2008 production," said McManus. "We further added to this
position just last week, such that 44 percent of our estimated 2008
production is now hedged: Approximately one-third of our estimated
natural gas production is hedged and approximately two-thirds of both
our estimated oil and NGL production. We believe there will be
additional opportunities to add to our natural gas hedge position as
we continue through the late summer and early winter.
"Having hedged at attractive prices relative to our assumptions,
we are raising our earnings guidance for 2008 by 5 cents to $3.65 -
$4.05 per diluted share," McManus said.
"Our underlying price assumptions applicable to unhedged volumes
remain unchanged at $8.50 per thousand cubic feet (Mcf) for natural
gas, $65 per barrel for oil and 84.5 cents per gallon for NGLs," he
noted. "Although the 2008 strip price for natural gas currently is
below our assumption, we were able to add to our hedge position just
last week at prices above $8.50 per Mcf and believe the market will
remain volatile, thereby providing future opportunities for additional
hedging at or above our assumed price; meanwhile, the strip price for
oil is well above our assumption at more than $70 per barrel."
ALABAMA SHALES UPDATE
Energen Resources Corporation, Energen's oil and gas exploration
and production subsidiary, and its AMI partner, Chesapeake Energy
Corporation, have now amassed a 440,000-acre lease position in
multiple shale plays in north-central Alabama; Energen Resources' net
position is 220,000 acres. The two companies plan to start a 5- to
10-well test program on their Alabama shale acreage in the 4th quarter
of 2007. "This test program will run into 2008 and is aimed at
defining the productive potential of our joint acreage position,"
McManus said.
2ND QUARTER RESULTS
For the three months ended June 30, 2007, Energen's net income
totaled $67.9 million, or 94 cents per diluted share, and compared
with second quarter 2006 net income of $49.6 million, or 67 cents per
diluted share. This 40 percent increase in EPS primarily reflects
higher realized sales prices for Energen Resources' second quarter
2007 production, partially offset by increased lease operating expense
(LOE) and depreciation, depletion and amortization expense (DD&A).
Energen Resources Corporation
Energen Resources' second-quarter net income totaled $66.9 million
in 2007, reflecting a 33 percent increase over net income of $50.4
million in the same period a year ago.
Table A: 2nd Quarter Per-Unit Revenues and Production from Continuing
Operations
Average Realized Sales Prices Production
-------------------------------- ----------------------------
% %
2Q2007 2Q2006 Change 2Q2007 2Q2006 Change
----------------------------------------------------------------------
Natural
Gas $7.95 / Mcf $6.75 / Mcf 17.8 15.7 Bcf 15.7 Bcf 0.0
----------------------------------------------------------------------
Oil $64.03 / Bbl $51.92 / Bbl 23.3 947 MBbl 914 MBbl 3.6
----------------------------------------------------------------------
NGL $0.87 / Gal $0.69 / Gal 26.1 19.1 MMgal 20.1 MMgal (5.0)
----------------------------------------------------------------------
Total $8.38 / Mcfe 6.96 / Mcfe 20.4 24.1 Bcfe 24.1 Bcfe 0.0
----------------------------------------------------------------------
Per-unit LOE totaled $2.19 per Mcfe, up 19 percent from the same
period a year ago, largely due a general rise in field service costs,
increased repairs and work-over expenses; in addition, per-unit,
commodity-price driven production taxes rose 5.7 percent. Per-unit
DD&A in the second quarter of 2007 increased 13.5 percent over the
same period last year to $1.09 per Mcfe.
Alabama Gas Corporation
Energen's natural gas utility, Alabama Gas Corporation (Alagasco),
generated net income of $1.4 million in the second quarter of 2007 as
compared with a net loss of $0.5 million in the second quarter of
2006.
YEAR-TO-DATE RESULTS
For the six months ended June 30, 2007, Energen's net income
totaled $171.8 million, or $2.38 per diluted share, and compared with
net income of $137.1 million, or $1.85 per diluted share, in the same
period last year. This 29 percent increase in EPS largely reflects
higher realized sales prices for Energen Resources' production,
partially offset by increased LOE and DD&A.
Energen Resources Corporation
Energen Resources' year-to-date net income totaled $130.1 million
in 2007 for a 30 percent increase over net income of $100.2 million in
the same period a year ago.
Table B: YTD Per-Unit Revenues and Production from Continuing
Operations
Average Realized Sales Prices Production
------------------------------- -----------------------------
% %
YTD2007 YTD2006 Change YTD2007 YTD2006 Change
----------------------------------------------------------------------
Natural
Gas $7.94 / Mcf $7.16 / Mcf 10.9 31,237 MMcf 31,052 MMcf 0.6
----------------------------------------------------------------------
Oil $61.23 / Bbl $48.93 / Bbl 25.1 1,873 MBbl 1,832 MBbl 2.2
----------------------------------------------------------------------
NGL $0.83 / Gal $0.64 / Gal 29.7 38.0 MMgal 36.7 MMgal 3.5
----------------------------------------------------------------------
Total $8.23 / Mcfe 7.09 / Mcfe 16.1 47,905 Bcfe 47,285 Bcfe 1.3
----------------------------------------------------------------------
Per-unit LOE totaled $2.09 per Mcfe, up 8 percent from the same
period a year ago, largely due to a general rise in field service
costs and increased repairs and work-over expenses, partially offset
by a 4 percent decrease in per-unit, commodity-price driven production
taxes. Per-unit DD&A expense in the first six months of 2007 increased
12 percent over the same period last year to $1.09 per Mcfe.
Alabama Gas Corporation
Alagasco generated net income of $41.7 million in the first six
months of 2007 as compared with net income of $36.8 million in the
same period last year; net income in the prior-year period was
affected negatively by decreased usage driven by the high price of
natural gas supplies during the 2006 winter heating season.
RESULTS OF THE TRAILING 12 MONTHS
For the 12 months ended June 30, 2007, Energen's net income
totaled $308.3 million, or $4.26 per diluted share. This compared with
$213.5 million, or $2.89 per diluted share, in the same period a year
ago. Included in the current 12-months earnings is a $34.5 million, or
47 cents per diluted share, after-tax gain associated with the
Company's sale in October 2006 of one-half interest in its acreage
position in Alabama shales to Chesapeake Energy Corporation. Income
from discontinued operations was immaterial in both periods.
Energen Resources Corporation
Energen Resources' net income in the trailing 12-months period
totaled $267.5 million and compared with $179.5 million in the same
period last year. In addition to the one-time $34.5 million after-tax
gain, the oil and gas company benefited from higher realized sales
prices and a 3 percent increase in production volumes to 96.2 Bcfe.
Table C: Trailing 12 Months Per-Unit Revenues and Production from
Continuing Operations
Average Realized Sales Prices Production
------------------------------- -----------------------------
% %
TTM2007 TTM2006 Change TTM2007 TTM2006 Change
----------------------------------------------------------------------
Natural
Gas $7.35 / Mcf $6.84 / Mcf 7.5 63,009 MMcf 62,242 MMcf 1.2
----------------------------------------------------------------------
Oil $56.03 / Bbl $43.51 / Bbl 28.8 3,686 MBbl 3,481 MBbl 5.9
----------------------------------------------------------------------
NGL $0.75 / Gal $0.61 / Gal 23.0 77.6 MMgal 72.9 MMgal 6.4
----------------------------------------------------------------------
Total $7.57 / Mcfe 6.64 / Mcfe 14.0 96,216 Bcfe 93,538 Bcfe 2.9
----------------------------------------------------------------------
Alabama Gas Corporation
Alagasco generated net income of $42.2 million in the 12-months
ended June 30, 2007, as compared to $33.7 million in the prior-year
period; the difference largely was due to the timing of rate
recovery between periods and the negative impact on prior-period net
income resulting from decreased usage driven by the high price of
natural gas supplies during the 2006 winter heating season.
2007 EARNINGS GUIDANCE
Energen today narrowed its 2007 earnings guidance range by raising
the bottom of the range 10 cents per diluted share. The new earnings
guidance range is $3.90 - $4.20 per diluted share. "Energen's
excellent year-to-date performance, better-than-expected production
and substantial hedge position for the remainder of this year give us
a great deal of confidence that we are on the right track to achieve
our sixth consecutive year of record earnings in 2007," said McManus.
Key assumptions in Energen's 2007 earnings guidance are:
- Existing hedge position covering 67 percent of estimated
production in the last half of 2007;
- Assumed prices for unhedged natural gas, oil and NGL
production of $8 per Mcf, $60 per barrel and 78 cents per
gallon, respectively;
- Production of 96 Bcfe, an increase of 1 Bcfe;
- Capital spending of approximately $360 million, including some
$300 million by Energen Resources and approximately $60
million by Alagasco; this $25 million increase in Energen
Resources' capital spending plans largely is due to an $18
million bolt-on acquisition in the Permian Basin and
associated development;
- An average DD&A rate at Energen Resources of $1.13 per Mcfe
- Per-unit LOE at Energen Resources, including production taxes,
of $2.11 per Mcfe
- Alagasco's earning within its allowed range of return on
average equity of approximately $300 million
- Average diluted shares outstanding of 72.3 million.
Hedge Position for Remainder of 2007
Energen Resources' hedge position for the remainder of the year by
commodity is as follows:
Production, 3Q-4Q NYMEX-equiv.
Commodity Hedge Vols. (est.) % Hedged price
----------------------------------------------------------------------
Natural Gas 21.1 Bcf 31.4 Bcf 67 $8.87 / Mcf
----------------------------------------------------------------------
Oil 1,353 MBbl 1,942 MBbl 70 $68.88 / barrel
----------------------------------------------------------------------
NGL 22.4 MMgal 35.1 MMgal 64 $0.93 / gallon
----------------------------------------------------------------------
NOTE: Actual July data used where known
Energen Resources' natural gas and oil hedge positions for the
remainder of the year by hedge type are as follows:
Natural Gas Hedges
--------------------------------------------------
Assumed Differential NYMEXe Price
Volumes (Bcf) (per Mcf) (per Mcf)
----------------------------------------------------------------------
NYMEX 6.4 -- $9.28
----------------------------------------------------------------------
San Juan Basin 13.0 $1.00 $8.59
----------------------------------------------------------------------
Permian Basin 0.2 $0.79 $7.98
----------------------------------------------------------------------
SNG-Louisiana 1.5 $0.0 $9.72
----------------------------------------------------------------------
Oil Hedges
--------------------------------------------------
Assumed Differential NYMEXe Price
Volumes (MBbl) (per barrel) (per barrel)
----------------------------------------------------------------------
NYMEX 174 -- $75.42
----------------------------------------------------------------------
Sour Oil (WTS) 1,179 $4.79 $67.92
----------------------------------------------------------------------
NOTE: Actual July data used where known
Average realized oil and gas prices for Energen Resources'
production associated with NYMEX contracts as well as for unhedged
production will reflect the impact of basis differentials. Average NGL
revenue per unit of production will be net of transportation and
fractionation fees.
For production associated with basin-specific contracts, Energen
Resources will receive the contracted hedge price. Energen typically
hedges basis differentials where applicable. 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.
Earnings Sensitivities to Commodity Price Changes
Given Energen Resources' current hedge position for the remainder
of 2007 and using the price assumptions given above for the Company's
unhedged production, changes in commodity prices are estimated to have
the following impact on Energen's 2007 earnings:
- Every 10-cent change in the average NYMEX price of gas from
$8.00 represents an estimated net income impact of
approximately $365,000 (0.5 cents per diluted share).
- Every $1.00 change in the average NYMEX price of oil from
$60.00 per barrel represents an estimated net income impact of
approximately $265,000 (0.4 cents per diluted share).
- Every 1-cent change in the average price of liquids from $0.78
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.
2008 EARNINGS GUIDANCE
Energen today raised its earnings guidance range for 2008 by 5
cents per diluted share to a new range of $3.65 - $4.05 per diluted
share; this increase primarily reflects the impact on earnings of the
Company's current hedge position. Energen maintains its assumed prices
for unhedged natural gas, oil and NGL production of $8.50 per Mcf, $65
per barrel and 84.5 cents per gallon, respectively.
Key assumptions in Energen's 2008 earnings guidance include:
- Existing hedge position covering approximately 44 percent of
estimated 2008 production;
- Production of 98 Bcfe;
- Capital spending of approximately $255 million, including $193
by Energen Resources and $62 million by Alagasco
- An average DD&A rate at Energen Resources of $1.29 per Mcfe
- Per-unit LOE at Energen Resources, including production taxes,
of $2.22 per Mcfe
- Alagasco's earning within its allowed range of return on
average equity of approximately $315 million
- Average diluted shares outstanding of 72.3 million
"I would emphasize that none of our 2008 estimates include any
potential production or drilling capital associated with our stake in
multiple shale plays in Alabama," added McManus.
2008 Hedge Position
Energen Resources' 2008 hedge position by commodity is as follows:
Commodity Hedge Vols. 2008e Production % Hedged NYMEX-equiv. price
----------------------------------------------------------------------
Natural Gas 21.6 Bcf 64.8 Bcf 33 $8.78 / Mcf
----------------------------------------------------------------------
Oil 2.7 MMBbl 4.0 MMBbl 65 $67.52 / barrel
----------------------------------------------------------------------
NGL 41.3 MMgal 63.8 MMgal 65 $0.93 / gallon
----------------------------------------------------------------------
Energen Resources' 2008 natural gas and oil hedge positions by hedge
type are as follows:
Natural Gas Hedges
--------------------------------------------------
Assumed Differential NYMEXe Price
Volumes (Bcf) (per Mcf) (per Mcf)
----------------------------------------------------------------------
NYMEX 10.8 -- $8.70
----------------------------------------------------------------------
San Juan Basin 10.8 $1.05 $8.86
----------------------------------------------------------------------
Oil Hedges
--------------------------------------------------
Assumed Differential NYMEXe Price
Volumes (MBbl) (per barrel) (per barrel)
----------------------------------------------------------------------
NYMEX 335 -- $72.30
----------------------------------------------------------------------
Sour Oil (WTS) 2,333 $5.00 $66.83
----------------------------------------------------------------------
Average realized oil and gas prices for ERC's production
associated with NYMEX contracts as well as for unhedged production
will reflect the impact of basis differentials. Average realized NGL
prices will be net of transportation and fractionation fees.
For production associated with basin-specific contracts, ERC will
receive the contracted hedge price. Energen typically hedges basis
differentials where applicable. In the tables above, the
basin-specific contract prices were converted for comparability
purposes to a NYMEX-equivalent price by adding to them ERC's assumed
basis differentials.
Earnings Sensitivities to Commodity Price Changes
Given ERC's current hedge position for 2008 and using the price
assumptions given above for the Company's unhedged production, changes
in commodity prices are estimated to have the following impact on
Energen's 2008 earnings:
- Every 10-cent change in the average NYMEX price of gas from
$8.50 represents an estimated net income impact of
approximately $2,150 million (3.0 cents per diluted share).
- Every $1.00 change in the average NYMEX price of oil from
$65.00 per barrel represents an estimated net income impact of
approximately $670,000 (0.9 cents per diluted share).
- Every 1-cent change in the average price of liquids from
$0.845 per gallon represents an estimated net income impact of
approximately $65,000 (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.
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 more complete discussion of
risks and uncertainties that could affect future results of Energen
and its subsidiaries is included in the Company's periodic reports
filed with the Securities and Exchange Commission.
Energen Corporation is a diversified energy holding company with
headquarters in Birmingham, AL. Its two lines of business are the
acquisition and development of domestic, onshore natural gas, oil and
NGL reserves and natural gas distribution in central and north
Alabama. Energen Resources has approximately 1.7 Tcfe of proved
reserves in the San Juan, Permian and Black Warrior basins and in the
North Louisiana/East Texas area. More information is available at
www.energen.com.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the 3 months ending June 30, 2007 and 2006
----------------------------------------------------------------------
2nd Quarter
-------------------
(in thousands, except per share data) 2007 2006 Change
----------------------------------------------------------------------
Operating Revenues
Oil and gas operations $203,356 $169,178 $34,178
Natural gas distribution 111,566 113,196 (1,630)
----------------------------------------------------------------------
Total operating revenues 314,922 282,374 32,548
----------------------------------------------------------------------
Operating Expenses
Cost of gas 53,358 57,831 (4,473)
Operations & maintenance 84,111 78,401 5,710
Depreciation, depletion and amortization 38,707 34,499 4,208
Taxes, other than income taxes 21,870 21,433 437
Accretion expense 971 912 59
----------------------------------------------------------------------
Total operating expenses 199,017 193,076 5,941
----------------------------------------------------------------------
Operating Income 115,905 89,298 26,607
----------------------------------------------------------------------
Other Income (Expense)
Interest expense (12,016) (12,366) 350
Other income 950 255 695
Other expense (187) (272) 85
----------------------------------------------------------------------
Total other expense (11,253) (12,383) 1,130
----------------------------------------------------------------------
Income from Continuing Operations Before
Income Taxes 104,652 76,915 27,737
Income tax expense 36,749 27,313 9,436
----------------------------------------------------------------------
Income from Continuing Operations 67,903 49,602 18,301
----------------------------------------------------------------------
Discontinued Operations, Net of Taxes
Income (loss) from discontinued
operations - (1) 1
Gain on disposal of discontinued
operations - - -
----------------------------------------------------------------------
Income (Loss) from Discontinued
Operations - (1) 1
----------------------------------------------------------------------
Net Income $ 67,903 $ 49,601 $18,302
----------------------------------------------------------------------
Diluted Earnings Per Average Common Share
Continuing operations $ 0.94 $ 0.67 $ 0.27
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 0.94 $ 0.67 $ 0.27
----------------------------------------------------------------------
Basic Earnings Per Average Common Share
Continuing operations $ 0.95 $ 0.68 $ 0.27
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 0.95 $ 0.68 $ 0.27
----------------------------------------------------------------------
Diluted Avg. Common Shares Outstanding 72,249 73,902 (1,653)
----------------------------------------------------------------------
Basic Avg. Common Shares Outstanding 71,592 73,028 (1,436)
----------------------------------------------------------------------
Dividends Per Common Share $ 0.115 $ 0.11 $ 0.005
----------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the 6 months ending June 30, 2007 and 2006
----------------------------------------------------------------------
Year-to-date
-------------------
(in thousands, except per share data) 2007 2006 Change
----------------------------------------------------------------------
Operating Revenues
Oil and gas operations $397,389 $338,697 $ 58,692
Natural gas distribution 410,194 431,819 (21,625)
----------------------------------------------------------------------
Total operating revenues 807,583 770,516 37,067
----------------------------------------------------------------------
Operating Expenses
Cost of gas 221,496 251,881 (30,385)
Operations & maintenance 166,154 152,884 13,270
Depreciation, depletion and amortization 76,727 68,796 7,931
Taxes, other than income taxes 52,182 54,112 (1,930)
Accretion expense 1,921 1,810 111
----------------------------------------------------------------------
Total operating expenses 518,480 529,483 (11,003)
----------------------------------------------------------------------
Operating Income 289,103 241,033 48,070
----------------------------------------------------------------------
Other Income (Expense)
Interest expense (24,237) (25,543) 1,306
Other income 1,511 962 549
Other expense (382) (501) 119
----------------------------------------------------------------------
Total other expense (23,108) (25,082) 1,974
----------------------------------------------------------------------
Income from Continuing Operations Before
Income Taxes 265,995 215,951 50,044
Income tax expense 94,211 78,848 15,363
----------------------------------------------------------------------
Income from Continuing Operations 171,784 137,103 34,681
----------------------------------------------------------------------
Discontinued Operations, Net of Taxes
Income (loss) from discontinued
operations 1 (8) 9
Gain on disposal of discontinued
operations - - -
----------------------------------------------------------------------
Income (Loss) from Discontinued
Operations 1 (8) 9
----------------------------------------------------------------------
Net Income $171,785 $137,095 $ 34,690
----------------------------------------------------------------------
Diluted Earnings Per Average Common
Share
Continuing operations $ 2.38 $ 1.85 $ 0.53
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 2.38 $ 1.85 $ 0.53
----------------------------------------------------------------------
Basic Earnings Per Average Common Share
Continuing operations $ 2.40 $ 1.87 $ 0.53
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 2.40 $ 1.87 $ 0.53
----------------------------------------------------------------------
Diluted Avg. Common Shares Outstanding 72,153 73,978 (1,825)
----------------------------------------------------------------------
Basic Avg. Common Shares Outstanding 71,538 73,148 (1,610)
----------------------------------------------------------------------
Dividends Per Common Share $ 0.23 $ 0.22 $ 0.01
----------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the 12 months ending June 30, 2007 and 2006
----------------------------------------------------------------------
Trailing 12 Months
-----------------------
(in thousands, except per share
data) 2007 2006 Change
----------------------------------------------------------------------
Operating Revenues
Oil and gas operations $ 789,234 $ 629,084 $160,150
Natural gas distribution 641,819 667,194 (25,375)
----------------------------------------------------------------------
Total operating revenues 1,431,053 1,296,278 134,775
----------------------------------------------------------------------
Operating Expenses
Cost of gas 342,712 380,224 (37,512)
Operations & maintenance 315,427 294,302 21,125
Depreciation, depletion and
amortization 150,017 135,961 14,056
Taxes, other than income taxes 93,797 101,751 (7,954)
Accretion expense 3,730 3,160 570
----------------------------------------------------------------------
Total operating expenses 905,683 915,398 (9,715)
----------------------------------------------------------------------
Operating Income 525,370 380,880 144,490
----------------------------------------------------------------------
Other Income (Expense)
Interest expense (47,346) (49,149) 1,803
Other income 1,422 2,255 (833)
Other expense (849) (675) (174)
----------------------------------------------------------------------
Total other expense (46,773) (47,569) 796
----------------------------------------------------------------------
Income from Continuing Operations
Before Income Taxes 478,597 333,311 145,286
Income tax expense 170,393 119,836 50,557
----------------------------------------------------------------------
Income from Continuing Operations 308,204 213,475 94,729
----------------------------------------------------------------------
Discontinued Operations, Net of
Taxes
Income (loss) from discontinued
operations 3 (9) 12
Gain on disposal of discontinued
operations 53 22 31
----------------------------------------------------------------------
Income from Discontinued Operations 56 13 43
----------------------------------------------------------------------
Net Income $ 308,260 $ 213,488 $ 94,772
----------------------------------------------------------------------
Diluted Earnings Per Average Common
Share
Continuing operations $ 4.26 $ 2.89 $ 1.37
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 4.26 $ 2.89 $ 1.37
----------------------------------------------------------------------
Basic Earnings Per Average Common
Share
Continuing operations $ 4.29 $ 2.92 $ 1.37
Discontinued operations 0.01 - 0.01
----------------------------------------------------------------------
Net Income $ 4.30 $ 2.92 $ 1.38
----------------------------------------------------------------------
Diluted Avg. Common Shares
Outstanding 72,315 73,939 (1,624)
----------------------------------------------------------------------
Basic Avg. Common Shares Outstanding 71,765 73,149 (1,384)
----------------------------------------------------------------------
Dividends Per Common Share $ 0.45 $ 0.42 $ 0.03
----------------------------------------------------------------------
SELECTED BUSINESS SEGMENT DATA (UNAUDITED)
For the 3 months ending June 30, 2007 and 2006
----------------------------------------------------------------------
2nd Quarter
-----------------
(in thousands, except sales price data) 2007 2006 Change
----------------------------------------------------------------------
Oil and Gas Operations
Operating revenues
Natural gas $124,712 $106,194 $18,518
Oil 60,615 47,475 13,140
Natural gas liquids 16,548 13,807 2,741
Other 1,481 1,702 (221)
----------------------------------------------------------------------
Total $203,356 $169,178 $34,178
----------------------------------------------------------------------
Production volumes from continuing
operations
Natural gas (MMcf) 15,690 15,725 (35)
Oil (MBbl) 947 914 33
Natural gas liquids (MMgal) 19.1 20.1 (1)
Production volumes from continuing ops.
(MMcfe) 24,099 24,076 23
Total production volumes (MMcfe) 24,099 24,075 24
Revenue per unit of production including
effects of all derivative instruments
Natural gas (Mcf) $ 7.95 $ 6.75 $ 1.2
Oil (barrel) $ 64.03 $ 51.92 $ 12.11
Natural gas liquids (gallon) $ 0.87 $ 0.69 $ 0.18
Other data from continuing operations
Lease operating expense (LOE)
LOE and other $ 39,121 $ 31,622 $ 7,499
Production taxes 13,589 12,759 830
----------------------------------------------------------------------
Total $ 52,710 $ 44,381 $ 8,329
----------------------------------------------------------------------
Depreciation, depletion and amortization $ 27,000 $ 23,566 $ 3,434
Capital expenditures $107,126 $ 50,652 $56,474
Exploration expenditures $ 178 $ 1,417 $(1,239)
Operating income $111,472 $ 87,138 $24,334
----------------------------------------------------------------------
Natural Gas Distribution
Operating revenues
Residential $ 66,828 $ 67,495 $ (667)
Commercial and industrial 31,172 32,856 (1,684)
Transportation 11,367 10,261 1,106
Other 2,199 2,584 (385)
----------------------------------------------------------------------
Total $111,566 $113,196 $(1,630)
----------------------------------------------------------------------
Gas delivery volumes (MMcf)
Residential 3,187 3,295 (108)
Commercial and industrial 1,981 2,084 (103)
Transportation 12,197 11,589 608
----------------------------------------------------------------------
Total 17,365 16,968 397
----------------------------------------------------------------------
Other data
Depreciation and amortization $ 11,707 $ 10,933 $ 774
Capital expenditures $ 16,606 $ 21,590 $(4,984)
Operating income $ 4,970 $ 2,711 $ 2,259
----------------------------------------------------------------------
SELECTED BUSINESS SEGMENT DATA (UNAUDITED)
For the 6 months ending June 30, 2007 and 2006
----------------------------------------------------------------------
Year-to-date
-----------------
(in thousands, except sales price data) 2007 2006 Change
----------------------------------------------------------------------
Oil and Gas Operations
Operating revenues
Natural gas $247,937 $222,278 $ 25,659
Oil 114,699 89,617 25,082
Natural gas liquids 31,590 23,484 8,106
Other 3,163 3,318 (155)
----------------------------------------------------------------------
Total $397,389 $338,697 $ 58,692
----------------------------------------------------------------------
Production volumes from continuing
operations
Natural gas (MMcf) 31,237 31,052 185
Oil (MBbl) 1,873 1,832 41
Natural gas liquids (MMgal) 38.0 36.7 1.3
Production volumes from continuing ops.
(MMcfe) 47,905 47,285 620
Total production volumes (MMcfe) 47,904 47,284 620
Revenue per unit of production including
effects of all derivative instruments
Natural gas (Mcf) $ 7.94 $ 7.16 $ 0.78
Oil (barrel) $ 61.23 $ 48.93 $ 12.30
Natural gas liquids (gallon) $ 0.83 $ 0.64 $ 0.19
Other data from continuing operations
Lease operating expense (LOE)
LOE and other $ 74,530 $ 65,484 $ 9,046
Production taxes 25,600 25,852 (252)
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Total $100,130 $ 91,336 $ 8,794
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Depreciation, depletion and
amortization $ 53,473 $ 47,117 $ 6,356
Capital expenditures $160,521 $ 95,557 $ 64,964
Exploration expenditures $ 275 $ 1,526 $ (1,251)
Operating income $216,773 $175,677 $ 41,096
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Natural Gas Distribution
Operating revenues
Residential $270,626 $286,001 $(15,375)
Commercial and industrial 108,894 117,413 (8,519)
Transportation 25,934 22,996 2,938
Other 4,740 5,409 (669)
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Total $410,194 $431,819 $(21,625)
----------------------------------------------------------------------
Gas delivery volumes (MMcf)
Residential 14,766 14,980 (214)
Commercial and industrial 6,853 7,025 (172)
Transportation 25,617 24,948 669
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Total 47,236 46,953 283
----------------------------------------------------------------------
Other data
Depreciation and amortization $ 23,254 $ 21,679 $ 1,575
Capital expenditures $ 31,573 $ 40,435 $ (8,862)
Operating income $ 73,407 $ 66,438 $ 6,969
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SELECTED BUSINESS SEGMENT DATA (UNAUDITED)
For the 12 months ending June 30, 2007 and 2006
----------------------------------------------------------------------
Trailing 12 Months
------------------
(in thousands, except sales price data) 2007 2006 Change
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Oil and Gas Operations
Operating revenues
Natural gas $463,219 $425,913 $ 37,306
Oil 206,541 151,464 55,077
Natural gas liquids 58,364 44,141 14,223
Other 61,110 7,566 53,544
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Total $789,234 $629,084 $160,150
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Production volumes from continuing
operations
Natural gas (MMcf) 63,009 62,242 767
Oil (MBbl) 3,686 3,481 205
Natural gas liquids (MMgal) 77.6 72.9 4.7
Production volumes from continuing ops.
(MMcfe) 98,216 93,538 4,678
Total production volumes (MMcfe) 98,215 93,558 4,657
Revenue per unit of production including
effects of all derivative instruments
Natural gas (Mcf) $ 7.35 $ 6.84 $ 0.51
Oil (barrel) $ 56.03 $ 43.51 $ 12.52
Natural gas liquids (gallon) $ 0.75 $ 0.61 $ 0.14
Other data
Lease operating expense (LOE)
LOE and other $143,899 $121,610 $ 22,289
Production taxes 49,257 56,050 (6,793)
----------------------------------------------------------------------
Total $193,156 $177,660 $ 15,496
----------------------------------------------------------------------
Depreciation, depletion and
amortization $104,198 $ 92,987 $ 11,211
Capital expenditures $324,642 $360,759 $(36,117)
Exploration expenditures $ 2,930 $ 1,708 $ 1,222
Operating income $446,245 $315,208 $131,037
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Natural Gas Distribution
Operating revenues
Residential $410,691 $427,821 $(17,130)
Commercial and industrial 173,381 189,490 (16,109)
Transportation 48,888 43,012 5,876
Other 8,859 6,871 1,988
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Total $641,819 $667,194 $(25,375)
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Gas delivery volumes (MMcf)
Residential 22,096 22,398 (302)
Commercial and industrial 11,054 11,817 (763)
Transportation 51,429 49,115 2,314
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Total 84,579 83,330 1,249
----------------------------------------------------------------------
Other data
Depreciation and amortization $ 45,819 $ 42,974 $ 2,845
Capital expenditures $ 67,295 $ 78,012 $(10,717)
Operating income $ 81,243 $ 67,326 $ 13,917
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CONTACT: Energen Corporation
Julie S. Ryland, 205-326-8421
SOURCE: Energen Corporation
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Energen
