Energen Builds 2005 Gas Hedge Position; More than 80% of Estimated 2005 Gas Production Insulated from Price Volatility.

BIRMINGHAM, Ala. -- Energen Corporation (NYSE:EGN) announced today that it has hedged an additional 10.1 billion cubic feet (Bcf) of its 2005 natural gas production at an average NYMEX-equivalent price of $6.08 per thousand cubic feet (Mcf). This brings the total natural gas hedge position of the Company's oil and gas acquisition and development subsidiary, Energen Resources Corporation, to more than 80 percent of its estimated 2005 gas production.

"We are pleased to have largely completed our natural gas hedging for 2005 and, in doing so, have removed a significant amount of potential uncertainty from our earnings," said Mike Warren, Energen's chairman and chief executive officer. Approximately 75 percent of Energen Resources' estimated 2005 oil production and 65 percent of its estimated natural gas liquids (NGL) production also has been hedged.

Energen's current 2005 earnings guidance, issued on December 22, 2004, is a range of $4.25-$4.45 per diluted share. Included in this guidance is an estimated 3 cents per diluted share from an unidentified acquisition of $200 million in the fourth quarter. The Company's 2005 guidance also assumes that prices applicable to Energen Resources' unhedged production will average $6 per Mcf for gas, $32 per barrel for oil, and 53 cents per gallon for NGL.

Energen Resources' hedge position with respect to its estimated 2005 production is as follows:

NYMEX-
                          Estimated 2005                     equiv.
 Commodity Hedge Vols.       Production         % Hedged      price
----------------------------------------------------------------------
                                                            $5.92 per
Natural Gas 49.5 Bcf  60.3 Bcf(a) 59.1 Bcf(b) 82%(a) 84%(b)        Mcf
----------------------------------------------------------------------
                                                           $35.69 per
Oil         2.7 MMBbl        3.6 MMBbl            75%           barrel
----------------------------------------------------------------------
                         80.8        79.6                  $0.542 per
NGL        50.4 MMgal   MMgal(a)    MMgal(b)  62%(a) 63%(b)     gallon
----------------------------------------------------------------------

(a) With unidentified 4th quarter 2005 acquisition
(b) Without unidentified 4th quarter 2005 acquisition

Energen Resources' 2005 natural gas hedge position by hedge typeis
as follows:

                                        Assumed Basis    Price/Mcf
       Hedge Type        Volumes (Bcf)   Difference(a)  (NYMEX equiv)
----------------------------------------------------------------------
NYMEX Hedges                       18.7             --          $6.01
----------------------------------------------------------------------
San Juan Basin-specific            24.1          $0.78          $5.80
----------------------------------------------------------------------
Permian Basin-specific              4.1          $0.60          $6.16
----------------------------------------------------------------------
SNG-LA                              1.6          $0.04          $6.13
----------------------------------------------------------------------
East Louisiana                      1.0          $0.06          $6.03
----------------------------------------------------------------------

(a) Assumed basis differentials have been used to calculate
    NYMEX-equivalent prices.

Energen Resources' 2005 oil hedge position by hedge type is as
follows:

                                     Assumed Sour Oil   Price/Barrel
      Hedge Type      Volumes (MBbl)    Difference(a)   (NYMEX equiv)
----------------------------------------------------------------------
NYMEX Hedges                     737                --         $34.83
----------------------------------------------------------------------
Sour Oil (WTS)                 1,963             $3.99         $36.01
----------------------------------------------------------------------

(a) Assumed sour oil differential has been used to calculate the
    NYMEX-equivalent price.

Realized prices for Energen Resources' production associated with NYMEX contracts as well as for unhedged production will reflect the impact of basis differentials. For production associated with basin-specific contracts, Energen Resources will receive the contracted hedge price, regardless of basis differentials. 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. Realized NGL prices will reflect transportation and fractionation fees.

Given Energen Resources' new hedge position for 2005, known prices for January gas, and assuming prices as outlined above for its unhedged production (excluding volumes from unidentified acquisitions), the sensitivities to pricing changes applicable to Energen's earnings guidance for 2005 are as follows:

--Every 10-cent change in the average NYMEX price of gas from $6.00 per Mcf represents an estimated net income impact of approximately $235,000 (0.6 cents per diluted share).

--Every $1.00 change in the average NYMEX price of oil from $32.00 per barrel represents an estimated net income impact of approximately $415,000 (1.1 cents per diluted share).

--Every 1-cent change in average price of NGL from $0.53 per gallon represents an estimated net income impact of approximately $105,000 (0.3 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.

Energen Corporation is a diversified energy holding company with headquarters in Birmingham, Alabama. Its two lines of business are the acquisition and development of natural gas, oil and natural gas liquids onshore in North America and natural gas distribution in central and north Alabama. Additional information on Energen is available at www.energen.com.

FORWARD-LOOKING STATEMENTS

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.