Energen Increases 2005 Natural Gas and Oil Hedge Position.

Energy Editors/Business Editors

BIRMINGHAM, Ala.--(BUSINESS WIRE)--May 13, 2004

Energen Corporation (NYSE:EGN) announced today that its oil and gas acquisition and development subsidiary, Energen Resources Corporation, has added to its natural gas and oil hedge position for 2005. Energen's latest hedges are for 240,000 barrels of sour crude at an average NYMEX-equivalent price of $33.98 per barrel and for 3.6 billion cubic feet (Bcf) of natural gas hedges at a NYMEX price of $6.00 per thousand cubic feet (Mcf).

Energen Resources' 2005 oil hedge position now totals approximately 1.4 million barrels (MMBbl) at an average NYMEX-equivalent price of $32.05 per barrel. These volumes represent approximately 40 percent of the Company's estimated 2005 oil production (with or without acquisitions) of 3.5 MMBbl. Energen's oil hedges include 480,000 barrels at an average NYMEX price of $30.63 per barrel and 900,000 barrels of sour crude at an average NYMEX-equivalent price of approximately $32.80 per barrel.

Energen Resources' total natural gas hedge position for 2005 now stands at approximately 21 Bcf at a NYMEX-equivalent price of $5.36 per Mcf. These hedges represent approximately 32 percent of the company's estimated 2005 natural gas production (including estimated production from unidentified acquisitions) of 65.8 Bcf, and approximately 41 percent of estimated 2005 gas production (excluding estimated production from unidentified acquisitions) of 51.2 Bcf. The natural gas hedges include approximately 4.8 Bcf of contracts at a NYMEX price of $5.45 per Mcf, approximately 15.5 Bcf of San Juan Basin-specific contracts at an average NYMEX-equivalent price of $5.33 per Mcf, and 0.6 Bcf of Permian Basin-specific hedges at a NYMEX-equivalent price of $5.62 per Mcf.

Energen Resources also has hedged some 30.2 million gallons (MMgal) of its 2005 natural gas liquids (NGL) production at an average price of 48.5 cents per gallon. This hedge position of approximately 2.5 MMgal per month represents about 43 percent of the Company's estimated 2005 NGL production (including estimated production from unidentified acquisitions) of approximately 71 MMgal, and 47 percent of estimated 2005 NGL production (excluding estimated production from acquisitions) of approximately 64 MMgal.

Energen Resources estimates that the most significant basis differentials in 2005 will equal approximately 80 cents per Mcf for San Juan Basin gas, 35 cents per Mcf for Permian Basin gas and $2.90 per barrel for Permian Basin sour oil. These assumed basis differentials have been used to calculate the NYMEX-equivalent prices of Energen Resources' basin-specific natural gas and sour oil hedges for 2005.

Energen's management said it will continue to closely monitor the commodity price environment and is prepared to enter into additional 2005 hedges in keeping with its past practice.

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.