Energen Resources Adds Oil and NGL Hedges for 2004
BIRMINGHAM, Ala., Sep 12, 2003 (BUSINESS WIRE) -- Energen
Corporation (NYSE: EGN) announced today that its oil and gas
acquisition and exploitation subsidiary, Energen Resources
Corporation, has increased its oil and natural gas liquids (NGL) hedge
positions for 2004.
Energen Resources in recent weeks has hedged an additional 603,000
barrels of its oil production in 2004 at an average New York
Mercantile Exchange (NYMEX) price of $28.44 per barrel. These hedges
include 15,000 barrels a month, January through December, at a NYMEX
price of $27.12 per barrel and 141,000 barrels a month, January
through March, at a NYMEX price of $29 per barrel. The new hedges
bring Energen Resources' total 2004 oil hedge position to
approximately 1.1 million barrels (MMBbl), or 30 percent of its
estimated 2004 production of approximately 3.6 MMBbl, at an average
NYMEX price of $27.29 per Barrel.
In addition to oil, Energen has hedged an additional 0.6 million
gallons per month, January through December, of its 2004 NGL
production at a price of 44.2 cents per gallon. These hedges bring
Energen Resources' total 2004 NGL hedge position to 37.2 million
gallons, or 55 percent of its estimated production of approximately 68
million gallons, at an average price of approximately 41.2 cents per
Energen Resources' natural gas hedge position for 2004 remains
unchanged at approximately 30 billion cubic feet (Bcf), or some 55
percent of its estimated production of approximately 55 Bcf, at an
average NYMEX-equivalent price of $4.55 per thousand cubic feet (Mcf).
The hedges include some 8.9 Bcf of NYMEX fixed price contracts, 2.4
Bcf of NYMEX collars with a floor of $4.05 per Mcf and a ceiling of
$4.44 per Mcf, and 18.7 Bcf of San Juan and Permian basin-specific
contracts. (Note: The basin-specific gas contract prices have been
adjusted to reflect a NYMEX-equivalent price based on Energen
Resources' estimated basis differentials between NYMEX and the
specific regional indices upon which the physical production is sold).
2004 Earnings Guidance
Energen maintains its previously announced 2004 earnings guidance
of $2.85-$3.05 per diluted share. This guidance assumes average NYMEX
prices applicable to its unhedged volumes of $5 per Mcf for natural
gas, $25.15 per barrel for oil and 45 cents per gallon for NGL.
Other key assumptions incorporated into Energen's 2004 earnings
-- Estimated production at Energen Resources of 86 Bcf equivalent
(Bcfe), including approximately 2 Bcfe associated with
-- Depreciation, depletion and amortization expense at Energen
Resources of approximately 91 cents per Mcf equivalent (Mcfe).
-- Lease operating expense (including production taxes) at
Energen Resources of approximately $1.16 per Mcfe.
-- Capital spending at Energen Resources of approximately $195
million, including $110 million for property acquisitions and
$85 million for development and limited exploration.
-- Alagasco, Energen's natural gas utility, earning within its
allowed range of return on equity of 13.15-13.65 percent on
average equity of approximately $270 million.
-- Capital spending at Alagasco of approximately $55 million.
Relative to the company's unhedged volumes in 2004:
-- Every 10-cent change in the average NYMEX price of gas from $5
per Mcf is estimated to have a net income impact of $885,000
(2.4 cents per diluted share).
-- Every $1 change in the average NYMEX price of oil from $25.15
per barrel is estimated to have a net income impact of
$1,250,000 (3.5 cents per diluted share).
-- Every 1-cent change in the average price of NLG from 45 cents
per gallon is estimated to have a net income impact of
$115,000 (0.3 cents per diluted share).
Energen Corporation is a diversified energy holding company with
headquarters in Birmingham, Alabama. Its two lines of business are
natural gas distribution in central and north Alabama and the
acquisition and exploitation of natural gas, oil and natural gas
liquids onshore in North America. Additional information on Energen is
available at www.energen.com.
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 discussion of risks and
uncertainties, which 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, Birmingham
Julie S. Ryland, 205-326-8421