Energen Raises 2007 Earnings Guidance, Affirms 2006 Guidance; Higher Prices, Production Drive 31% Increase in 2nd Quarter Results.BIRMINGHAM Birmingham, cities, United States Birmingham (bûr`mĭnghăm') 1 City (1990 pop. 265,968), seat of Jefferson co., N central Ala., in the Jones Valley near the southern end of the Appalachian system; founded and inc. , Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. . -- Energen Based in Birmingham, Alabama, Energen Corporation is a diversified energy company with an oil and gas acquisition and development company and a natural gas utility. Corporation (NYSE NYSE See: New York Stock Exchange : EGN EGN External Gateway Network (WorldCom) EGN East Gate News EGN European Games Network ) announced today that it is raising its 2007 earnings guidance range by 10 cents and affirming its 2006 guidance. In addition, the Company reported strong second quarter financial results. In other developments announced today: --Energen Resources Corporation, Energen's oil and gas acquisition and development subsidiary, has increased its production outlook for 2006 by 2 billion cubic feet equivalent (Bcfe) to 94 Bcfe; --Energen Resources says its 2007 budget, relative to current estimates, may well reflect a $55-$75 million increase in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. for development drilling and a 2.5-3.5 Bcfe rise in estimated production; and --Energen Resources has added another 11,000 acres to bring its lease position in Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). shales to 151,000 acres. "Energen Resources' 2006 production is up 5.6 percent over last year and exceeding our expectations," said Mike Warren
"With assumed prices applicable to unhedged volumes for the remainder of the year of $9 per thousand cubic feet (Mcf) for gas, $70 per barrel barrel: see English units of measurement. for oil and 92 cents per gallon gallon: see English units of measurement. for natural gas liquids (NGL NGL - A dialect of IGL. ) production, we anticipate earning within our current guidance range of $3.10-$3.30 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share," Warren Warren. 1 City (1990 pop. 144,864), Macomb co., SE Mich., a suburb of Detroit; est. 1837, inc. as a city 1957. It is an important metalworking center where steel is processed. said. "We also are comfortable with this range at current strip prices for the remainder of the year of roughly $7.50 per Mcf for gas and $74.50 for oil. "As for 2007, recent and substantial gas, oil and NGL hedges have prompted us to raise our earnings guidance by 10 cents to $3.90-$4.30 per diluted share. We have also adjusted our assumed prices for unhedged production, lowering gas to $9 per Mcf and raising oil to $70 per barrel - the same assumptions in place for the remainder of 2006," Warren said. "As we develop a formal 2007 budget in the coming months, we anticipate making additional adjustments," said James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. McManus McManus is a family name that may refer to: People:
Energen's 2007 budget also may include a reduced number of shares outstanding, reflecting the potential continuation continuation - continuation passing style of the Company's stock buy-back program in the latter half of 2006 and in 2007. Energen Resources continues to expand its lease position in various shale shale, sedimentary rock formed by the consolidation of mud or clay, having the property of splitting into thin layers parallel to its bedding planes. Shale tends to be fissile, i.e., it tends to split along planar surfaces between the layers of stratified rock. formations across north-central adj. 1. Of or pertaining to a region of the U. S. generally including states of the upper Mississippi valley and Great Lakes region lying north of the Ohio River and the southern boundaries of Kansas and Missouri and between the western boundary of Pennsylvania and the Alabama and announced today that it has secured an additional 11,000 acres, bringing its total lease position to 151,000 acres. Energen Resources plans to drill a number of wells on the acreage over the next 24 months. SECOND QUARTER RESULTS Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: earnings for the quarter ended June 30, 2006, totaled $49.6 million, or 67 cents per diluted share; this compared with net income of $37.6 million, or 51 cents per diluted share, in the second quarter of 2005. This 31 percent increase in quarterly earnings largely was due to a 20 percent increase in per-unit revenues from the production of Energen Resources. As commodity prices rose through 2005, Energen was able to enter into hedges for some of its 2006 production at prices well-above those in place for 2005. In addition, higher oil prices during the quarter enhanced the revenues from Energen Resources' unhedged oil production. Energen Resources Corporation Energen Resources Corporation is the largest subsidiary of Energen Corporation, a diversified energy company headquartered in Birmingham, Alabama. It is a growing oil and gas acquisition and development company that has approximately 1. Energen Resources' second quarter 2006 net income totaled $50.4 million as compared with net income of $36.4 million in the same period a year ago. Revenues per unit of production for Energen Resources' natural gas, oil and NGL production increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 20 percent to $6.96 per Mcf equivalent (Mcfe).
Average Per-Unit Revenues from Production in 2nd Quarter 2006 vs 2005
Commodity 2006 Revenues 2005 Revenues % Change
----------------------------------------------------------------------
Natural Gas $6.75/Mcf $6.22/Mcf 8.5%
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Oil $51.92/barrel $33.63/barrel 54.4%
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NGL $0.69/gallon $0.52/gallon 32.7%
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In addition to higher prices, Energen Resources benefited from higher production volumes. Production in the second quarter of 2006 increased 5 percent to 24.1 Bcfe. Oil production increased 8 percent largely due to the acquisition of Permian Basin The Permian Basin is a sedimentary basin largely contained in the western part of the U.S. state of Texas. It reaches from just south of Lubbock, Texas, to just south of Midland & Odessa, extending westward into the southeastern part of the adjacent state of New Mexico. oil properties in December December: see month. 2005. NGL and natural gas production also increased period-over-period at 8 percent and 4 percent, respectively. These increases largely were due to continued development activities in the San Juan Basin The San Juan Basin is a drainage basin and geologic structural basin in the Four Corners region of the Southwestern United States; its main portion covers around 4,600 square miles, encompassing much of northwestern New Mexico, northeastern Arizona, and parts of Colorado and Utah. and accelerated work-overs due to mild winter weather in New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). and southern Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. . Per-unit lease operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. (LOE LOE Ley Orgánica de Educación (Spanish) LOE Level Of Effort LOE Limited Objective Experiment LOE Letter of Explanation LOE Language Other than English. ) in the second quarter of 2006 totaled $1.84 per Mcfe. This 13 percent increase over the same period a year ago was largely due to a general rise in field service costs driven by higher commodity prices, increased repairs and work-over expense, and the December 2005 acquisition of Permian Basin properties. Depreciation, depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able and amortization (DD&A) expense in the second quarter of 2006 totaled 96 cents per Mcfe and was unchanged from the same period a year ago. Alabama Gas Corporation Alagasco's natural gas distribution operations reported a net loss of $0.5 million in the second quarter of 2006 as compared with net income of $1.1 million in the same period a year ago. This decline reflects the impact of decreased usage driven by the high price of natural gas supplies during the winter heating season and was partially offset by the utility's ability to earn on a higher level of equity representing investment in utility plant. RESULTS OF THE YEAR-TO-DATE Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. PERIOD For the first 6 months of 2006, Energen's net income totaled $137.1 million, or $1.85 per diluted share. This compared with $96.6 million, or $1.31 per diluted share, in the same period a year ago. Discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. generated a loss of $8,000 and income of $104,000 for the 6 months ending June 30, 2006 and 2005, respectively. Energen Resources Corporation Energen Resources' year-to-date 2006 net income totaled $100.2 million as compared with net income of $56.0 million in the same period a year ago. Discontinued operations generated a loss of $8,000 and income of $104,000 for the 6 months ending June 30, 2006 and 2005, respectively. Revenues per unit of production for Energen Resources' natural gas, oil and NGL production increased approximately 35 percent to $7.09 per Mcfe, and production of 47.3 Bcfe in the first six months of 2006 outpaced production in the same period last year by 2.5 Bcfe, or 5.6 percent.
Average Per-Unit Revenues from Production, Year-to-Date 2006 vs 2005
Commodity 2006 Revenues 2005 Revenues % Change
----------------------------------------------------------------------
Natural Gas $7.16/Mcf $5.43/Mcf 31.9%
----------------------------------------------------------------------
Oil $48.93/barrel $32.89/barrel 48.8%
----------------------------------------------------------------------
NGL $0.64/gallon $0.52/gallon 23.1%
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Production, Year-to-Date 2006 vs 2005
Commodity 2006 Production 2005 Production % Change
----------------------------------------------------------------------
Natural Gas 31.1 Bcf 29.9 Bcf 4.0%
----------------------------------------------------------------------
Oil 1,832.0 MBbl 1,666.0 MBbl 10.0%
----------------------------------------------------------------------
NGL 36.7 MMgal 34.4 MMgal 6.7%
----------------------------------------------------------------------
Per-unit LOE in the first six months of 2006 totaled $1.93 per Mcfe. This 23 percent increase over the same period a year ago was largely due to accelerated maintenance expenses in the San Juan Basin, a general rise in field service costs driven by higher commodity prices, increased repairs and work-over expenses, the December 2005 acquisition of Permian Basin properties and a 12 percent per-unit increase in production taxes driven by higher oil and NGL cash prices and partially offset by lower natural gas cash prices. DD&A expense in the first six months of 2006 increased 2 percent per unit to 97 cents per Mcfe and was due largely to the December 2005 acquisition of Permian Basin oil properties. Alabama Gas Corporation Alagasco Alabama Gas Corporation (Alagasco) is the largest natural gas utility in north and central Alabama that provides energy to 460,000 homes and businesses. Its history dates back more than 150 years and has operating divisions in Anniston, Birmingham, Gadsden, Montgomery, Opelika, reported net income of $36.8 million in the first half of 2006. This compared with net income of $40.1 million in the same period a year ago. This decline reflects the impact of decreased usage driven by the high price of natural gas supplies during the winter heating season and was partially offset by the utility's ability to earn on a higher level of equity representing investment in utility plant. RESULTS OF THE TRAILING 12 MONTHS For the 12 months ended June 30, 2006, Energen's net income totaled $213.5 million, or $2.89 per diluted share. This compared with $141.6 million, or $1.93 per diluted share, in the same period a year ago. Income from discontinued operations totaled $13,000 and $183,000 in the 12 months ending June 30, 2006 and 2005, respectively. Energen Resources Corporation Energen Resources' net income in the trailing 12-months period totaled $179.5 million and compared with $105.0 million in the same period last year. The oil and gas company benefited from a 32.5 percent increase in average per-unit revenues of production and a 4 percent increase in production volumes to 93.5 Bcfe.
Average Per-Unit Revenues from Production, Trailing 12 Months 2006
vs 2005
Commodity 2006 Revenues 2005 Revenues % Change
----------------------------------------------------------------------
Natural Gas $6.84/Mcf $5.17/Mcf 32.3%
----------------------------------------------------------------------
Oil $43.51/barrel $31.65/barrel 37.5%
----------------------------------------------------------------------
NGL $0.61/gallon $0.50/gallon 22.0%
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Production, Trailing 12 Months 2006 vs 2005
Commodity 2006 Production 2005 Production % Change
----------------------------------------------------------------------
Natural Gas 62.2 Bcf 59.6 Bcf 4.4%
----------------------------------------------------------------------
Oil 3,481 MBbl 3,397.0 MBbl 2.5%
----------------------------------------------------------------------
NGL 72.9 MMgal 70.4 MMgal 3.6%
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Alabama Gas Corporation Alagasco's natural gas distribution operations earned net income of $33.7 million in the 12 months ended June 30, 2006. This compared with net income of $37.0 million in the same period last year. 2006 EARNINGS OUTLOOK AFFIRMED af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. Energen management today affirmed its 2006 earnings guidance range of $3.10-$3.30 per diluted share. Two key changes were made in the underlying assumptions: --Energen increased its estimated 2006 production by 2 Bcfe to 94 Bcfe to reflect increased production year-to-date, development success beyond budgeted expectations, and a slight increase in development capital. --Average shares outstanding for the year were reduced from 74 million to 73.6 million to reflect the 1 million shares that had been repurchased as of June 30, 2006, through the Company's stock buy-back program. Hedge hedge, ornamental or protective barrier composed of shrubs or small trees growing in close rows. The plants may be allowed to grow naturally or may be trimmed to various heights and shapes (see topiary work). Position for the Remainder of 2006 Energen Resources' 2006 hedge position by commodity for the remainder of 2006 (July July: see month. through December) is as follows:
Estimated 2006 NYMEX-equiv.
Commodity Hedge Vols. Production % Hedged price
----------------------------------------------------------------------
Natural Gas 18.8 Bcf 30.7 Bcf 61% $8.04 per Mcf
----------------------------------------------------------------------
$53.18 per
Oil 1.4 MMBbl 1.9 MMBbl 74% barrel
----------------------------------------------------------------------
$0.56 per
NGL 15.1 MMgal 34.0 MMgal 44% gallon
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Note: Actual July data used, as available, to calculate unit prices.
Energen Resources' 2006 natural gas hedge position by hedge type for
the remainder of the year (July through December) is as follows:
Assumed Basis Price/Mcf
Hedge Type Volumes (Bcf) Difference (NYMEX equiv)
----------------------------------------------------------------------
NYMEX Hedges 8.0 -- $8.05
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San Juan Basin-specific 10.4 $1.75 $7.97
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Permian Basin-specific 0.2 $1.45 $9.80
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Houston Ship Channel 0.2 $0.70 $9.59
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Note: Actual July data used, as available, to calculate unit prices.
Energen Resources' 2006 oil hedge position by hedge type for the
remainder of the year (July through December) is as follows:
Assumed Sour Price/Barrel
Hedge Type Volumes (MBbl) Oil Difference (NYMEX equiv)
----------------------------------------------------------------------
NYMEX Hedges 449 -- $51.34
----------------------------------------------------------------------
Sour Oil (WTS) 946 $5.75 $54.06
----------------------------------------------------------------------
Note: Actual July data used, as available, to calculate unit prices.
Average oil and gas revenues per unit of production for Energen Resources' production associated with NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). 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 fractionation /frac·tion·a·tion/ (frak?shun-a´shun) 1. in radiology, division of the total dose of radiation into small doses administered at intervals. 2. 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 While there are many factors that affect Energen Resources' financial results, the largest influences typically are the commodity prices applicable to the Company's unhedged production. The Company's guidance for 2006 earnings assumes that NYMEX prices applicable to Energen Resources' unhedged production for the remainder of the year will average $9 per Mcf for gas and $70 per barrel for oil and that NGL prices will average 92 cents per gallon. Given Energen Resources' current hedge position for the remainder of 2006 and assuming prices as outlined above for its unhedged production, the sensitivities to pricing changes applicable to Energen's earnings guidance for 2006 are as follows: --Every 10-cent change in the average NYMEX price of gas from $9 per Mcf represents an estimated net income impact of approximately $400,000 (0.5 cents per diluted share). --Every $1 change in the average NYMEX price of oil from $70 per barrel represents an estimated net income impact of approximately $200,000 (0.3 cents per diluted share). --Every 1-cent change in average price of NGL from $0.92 per gallon represents an estimated net income impact of approximately $15,000 (0.0 cents per diluted share). Price-related events such as substantial basis differential changes could cause earnings sensitivities to be different from those outlined above. Energen Resources' development spending has been modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. slightly to $158 million, with exploration spending in 2006 estimated to be $15 million. Capital spending at Alagasco is estimated to be approximately $70 million. Other key assumptions that support Energen's earnings guidance include: --The utility earning a 12-12.5 percent return on average equity of $285 million. --A DD&A rate at Energen Resources of approximately 98 cents per Mcfe and LOE including production taxes of approximately $2 per Mcfe. 2007 EARNINGS GUIDANCE RAISED Energen management increased the Company's earnings guidance range for 2007 by 10 cents to $3.90-$4.30 per diluted share, largely reflecting recent additions to its hedge position. To date, approximately 60 percent of Energen Resources' estimated production has been hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. . Embedded Inserted into. See embedded system. in Energen's 2007 new earnings guidance are assumptions that NYMEX prices applicable to Energen Resources' unhedged natural gas and oil production will average $9 per Mcf and $70 per barrel, respectively. The assumed average price for the Company's unhedged NGL production in 2007 is approximately 92 cents per gallon. No changes were made to estimated 2007 production or to the estimated average shares outstanding beyond those reflecting shares repurchased as of June 30, 2006. Management said it expects to make further adjustments to its 2007 guidance as it progresses through its strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. and budgeting process in the coming months. Potential changes include increasing development capital spending another $55-$75 million and production estimates by 2 1/2-3 1/2 Bcfe. As warranted, the Company also may adjust 2007 average shares outstanding to reflect share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. that may be made in the latter half of 2006 and in 2007.
2007 Hedge Position
Energen Resources' 2007 hedge position by commodity is as follows:
Estimated 2007 NYMEX-equiv.
Commodity Hedge Vols. Production % Hedged price
----------------------------------------------------------------------
Natural Gas 34.1 Bcf 58.7 Bcf 58% $9.53 per Mcf
----------------------------------------------------------------------
$70.34 per
Oil 2.7 MMBbl 3.6 MMBbl 76% barrel
----------------------------------------------------------------------
$0.93 per
NGL 41.8 MMgal 65.2 MMgal 64% gallon
----------------------------------------------------------------------
Energen Resources' 2007 natural gas hedge position by hedge type is as
follows:
Assumed Basis Price/Mcf
Hedge Type Volumes (Bcf) Difference (NYMEX equiv)
----------------------------------------------------------------------
NYMEX Hedges 11.4 -- $9.43
----------------------------------------------------------------------
San Juan Basin-specific 19.7 $1.66 $9.56
----------------------------------------------------------------------
SNG-Louisiana 3.0 $0.04 $9.76
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Energen Resources' 2007 oil hedge position by hedge type is as
follows:
Volumes Assumed Sour Price/Barrel
Hedge Type (MBbl) Oil Difference (NYMEX equiv)
----------------------------------------------------------------------
NYMEX Hedges 948 -- $65.44
----------------------------------------------------------------------
Sour Oil (WTS) 1,768 $6.46 $72.97
----------------------------------------------------------------------
Average oil and gas revenues per unit of production 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 2007 and using the price assumptions given above for the Company's unhedged production, changes in commodity prices are estimated for have the following impact on Energen's 2007 earnings: --Every 10-cent change in the average NYMEX price of gas from $9.00 represents an estimated net income impact of approximately $1.1 million (1.5 cents per diluted share). --Every $1.00 change in the average NYMEX price of oil from $70.00 per barrel represents an estimated net income impact of approximately $385,000 (0.5 cents per diluted share). --Every 1-cent change in the average price of liquids from $0.92 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. Other key assumptions that support Energen's 2007 earnings guidance include: --Average shares outstanding of 73.4 million; --A DD&A rate at Energen Resources of approximately $1.05 per Mcfe and LOE including production taxes of approximately $2.12 per Mcfe; and --Alagasco's earning within its allowed range of return on average equity of approximately $296 million. Energen Corporation is a diversified diversified (di·verˑ·s energy holding company with headquarters in Birmingham, Alabama Birmingham (pronounced [ˈbɝmɪŋˌhæm]) is the largest city in the U.S. state of Alabama and is the county seat of Jefferson County. . Its two lines of business are the acquisition and development of natural gas, oil and natural gas liquids onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and natural gas distribution in central and north Alabama North Alabama is a region of the U.S. state of Alabama, generally thought to include these 12 counties: Cherokee, Colbert, DeKalb, Franklin, Jackson, Lauderdale, Lawrence, Limestone, Madison, Marshall, Morgan, and Winston, with a combined population of 953,247, or 20. . Additional information on Energen is available at www.energen.com. FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This release contains statements expressing expectations of future plans, objectives and performance that constitute forward-looking statements made pursuant to the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Except as otherwise disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). , 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.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the 3 months ending June 30, 2006 and 2005
----------------------------------------------------------------------
2nd Quarter
-------------------
(in thousands, except per share data) 2006 2005 Change
----------------------------------------------------------------------
Operating Revenues
Oil and gas operations $169,178 $134,428 $34,750
Natural gas distribution 113,196 107,197 5,999
----------------------------------------------------------------------
Total operating revenues 282,374 241,625 40,749
----------------------------------------------------------------------
Operating Expenses
Cost of gas 57,831 50,424 7,407
Operations & maintenance 78,401 66,904 11,497
Depreciation, depletion and amortization 34,499 33,101 1,398
Taxes, other than income taxes 21,433 19,794 1,639
Accretion expense 912 654 258
----------------------------------------------------------------------
Total operating expenses 193,076 170,877 22,199
----------------------------------------------------------------------
Operating Income 89,298 70,748 18,550
----------------------------------------------------------------------
Other Income (Expense)
Interest expense (12,366) (11,524) (842)
Other income 255 517 (262)
Other expense (272) (268) (4)
----------------------------------------------------------------------
Total other expense (12,383) (11,275) (1,108)
----------------------------------------------------------------------
Income from Continuing Operations Before
Income Taxes 76,915 59,473 17,442
Income tax expense 27,313 21,900 5,413
----------------------------------------------------------------------
Income from Continuing Operations 49,602 37,573 12,029
----------------------------------------------------------------------
Discontinued Operations, Net of Taxes
Income from discontinued operations (1) 13 (14)
Loss on disposal of discontinued
operations - (13) 13
----------------------------------------------------------------------
Loss from Discontinued Operations (1) - (1)
----------------------------------------------------------------------
Net Income $ 49,601 $ 37,573 $12,028
----------------------------------------------------------------------
Diluted Earnings Per Average Common Share
Continuing operations $ 0.67 $ 0.51 $ 0.16
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 0.67 $ 0.51 $ 0.16
----------------------------------------------------------------------
Basic Earnings Per Average Common Share
Continuing operations $ 0.68 $ 0.51 $ 0.17
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 0.68 $ 0.51 $ 0.17
----------------------------------------------------------------------
Diluted Avg. Common Shares Outstanding 73,902 73,782 120
----------------------------------------------------------------------
Basic Avg. Common Shares Outstanding 73,028 73,017 11
----------------------------------------------------------------------
Dividends Per Common Share $ 0.11 $ 0.10 $ 0.01
----------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the 6 months ending June 30, 2006 and 2005
----------------------------------------------------------------------
Year-to-date
-------------------
(in thousands, except per share data) 2006 2005 Change
----------------------------------------------------------------------
Operating Revenues
Oil and gas operations $338,697 $237,308 $101,389
Natural gas distribution 431,819 365,325 66,494
----------------------------------------------------------------------
Total operating revenues 770,516 602,633 167,883
----------------------------------------------------------------------
Operating Expenses
Cost of gas 251,881 187,279 64,602
Operations & maintenance 152,884 127,309 25,575
Depreciation, depletion and amortization 68,796 64,526 4,270
Taxes, other than income taxes 54,112 46,344 7,768
Accretion expense 1,810 1,297 513
----------------------------------------------------------------------
Total operating expenses 529,483 426,755 102,728
----------------------------------------------------------------------
Operating Income 241,033 175,878 65,155
----------------------------------------------------------------------
Other Income (Expense)
Interest expense (25,543) (23,194) (2,349)
Other income 962 870 92
Other expense (501) (536) 35
----------------------------------------------------------------------
Total other expense (25,082) (22,860) (2,222)
----------------------------------------------------------------------
Income from Continuing Operations Before
Income Taxes 215,951 153,018 62,933
Income tax expense 78,848 56,503 22,345
----------------------------------------------------------------------
Income from Continuing Operations 137,103 96,515 40,588
----------------------------------------------------------------------
Discontinued Operations, Net of Taxes
Loss from discontinued operations (8) (6) (2)
Gain on disposal of discontinued
operations - 110 (110)
----------------------------------------------------------------------
Income (Loss) from Discontinued
Operations (8) 104 (112)
----------------------------------------------------------------------
Net Income $137,095 $ 96,619 $ 40,476
----------------------------------------------------------------------
Diluted Earnings Per Average Common Share
Continuing operations $ 1.85 $ 1.31 $ 0.54
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 1.85 $ 1.31 $ 0.54
----------------------------------------------------------------------
Basic Earnings Per Average Common Share
Continuing operations $ 1.87 $ 1.32 $ 0.55
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 1.87 $ 1.32 $ 0.55
----------------------------------------------------------------------
Diluted Avg. Common Shares Outstanding 73,978 73,726 252
----------------------------------------------------------------------
Basic Avg. Common Shares Outstanding 73,148 72,985 163
----------------------------------------------------------------------
Dividends Per Common Share $ 0.22 $ 0.20 $ 0.02
----------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the 12 months ending June 30, 2006 and 2005
----------------------------------------------------------------------
Trailing 12 Months
-----------------------
(in thousands, except per share data) 2006 2005 Change
----------------------------------------------------------------------
Operating Revenues
Oil and gas operations $ 629,084 $ 456,068 $173,016
Natural gas distribution 667,194 544,119 123,075
----------------------------------------------------------------------
Total operating revenues 1,296,278 1,000,187 296,091
----------------------------------------------------------------------
Operating Expenses
Cost of gas 380,224 268,139 112,085
Operations & maintenance 294,302 252,113 42,189
Depreciation, depletion and
amortization 135,961 127,734 8,227
Taxes, other than income taxes 101,751 80,973 20,778
Accretion expense 3,160 2,540 620
----------------------------------------------------------------------
Total operating expenses 915,398 731,499 183,899
----------------------------------------------------------------------
Operating Income 380,880 268,688 112,192
----------------------------------------------------------------------
Other Income (Expense)
Interest expense (49,149) (44,925) (4,224)
Other income 2,255 2,320 (65)
Other expense (675) (1,056) 381
----------------------------------------------------------------------
Total other expense (47,569) (43,661) (3,908)
----------------------------------------------------------------------
Income from Continuing Operations
Before Income Taxes 333,311 225,027 108,284
Income tax expense 119,836 83,583 36,253
----------------------------------------------------------------------
Income from Continuing Operations 213,475 141,444 72,031
----------------------------------------------------------------------
Discontinued Operations, Net of Taxes
Income (loss) from discontinued
operations (9) 65 (74)
Gain on disposal of discontinued
operations 22 118 (96)
----------------------------------------------------------------------
Income from Discontinued Operations 13 183 (170)
----------------------------------------------------------------------
Net Income $ 213,488 $ 141,627 $ 71,861
----------------------------------------------------------------------
Diluted Earnings Per Average Common
Share
Continuing operations $ 2.89 $ 1.92 $ 0.97
Discontinued operations - 0.01 (0.01)
----------------------------------------------------------------------
Net Income $ 2.89 $ 1.93 $ 0.96
----------------------------------------------------------------------
Basic Earnings Per Average Common
Share
Continuing operations $ 2.92 $ 1.94 $ 0.98
Discontinued operations - 0.01 (0.01)
----------------------------------------------------------------------
Net Income $ 2.92 $ 1.95 $ 0.97
----------------------------------------------------------------------
Diluted Avg. Common Shares
Outstanding 73,939 73,480 459
----------------------------------------------------------------------
Basic Avg. Common Shares Outstanding 73,149 72,802 347
----------------------------------------------------------------------
Dividends Per Common Share $ 0.42 $ 0.3925 $ 0.0275
----------------------------------------------------------------------
SELECTED BUSINESS SEGMENT DATA (UNAUDITED)
For the 3 months ending June 30, 2006 and 2005
----------------------------------------------------------------------
2nd Quarter
-------------------
(in thousands, except sales price data) 2006 2005 Change
----------------------------------------------------------------------
Oil and Gas Operations
Operating revenues
Natural gas $106,194 $ 94,401 $11,793
Oil 47,475 28,499 18,976
Natural gas liquids 13,807 9,653 4,154
Other 1,702 1,875 (173)
----------------------------------------------------------------------
Total $169,178 $134,428 $34,750
----------------------------------------------------------------------
Production volumes from continuing
operations
Natural gas (MMcf) 15,725 15,176 549
Oil (MBbl) 914 848 66
Natural gas liquids (MMgal) 20.1 18.6 1.5
Production volumes from continuing ops.
(MMcfe) 24,076 22,911 1,165
Total production volumes (MMcfe) 24,075 22,919 1,156
Revenue per unit of production including
effects of all derivative instruments
Natural gas (Mcf) $ 6.75 $ 6.22 $ 0.53
Oil (barrel) $ 51.92 $ 33.63 $ 18.29
Natural gas liquids (gallon) $ 0.69 $ 0.52 $ 0.17
Other data from continuing operations
Lease operating expense (LOE)
LOE and other $ 31,622 $ 25,366 $ 6,256
Production taxes 12,759 11,869 890
----------------------------------------------------------------------
Total $ 44,381 $ 37,235 $ 7,146
----------------------------------------------------------------------
Depreciation, depletion and
amortization $ 23,566 $ 22,458 $ 1,108
Capital expenditures $ 50,652 $ 48,024 $ 2,628
Exploration expenditures $ 1,417 $ 170 $ 1,247
Operating income $ 87,138 $ 65,369 $21,769
----------------------------------------------------------------------
Natural Gas Distribution
Operating revenues
Residential $ 67,495 $ 64,778 $ 2,717
Commercial and industrial 32,856 29,580 3,276
Transportation 10,261 10,245 16
Other 2,584 2,594 (10)
----------------------------------------------------------------------
Total $113,196 $107,197 $ 5,999
----------------------------------------------------------------------
Gas delivery volumes (MMcf)
Residential 3,295 4,170 (875)
Commercial and industrial 2,084 2,411 (327)
Transportation 11,589 11,942 (353)
----------------------------------------------------------------------
Total 16,968 18,523 (1,555)
----------------------------------------------------------------------
Other data
Depreciation and amortization $ 10,933 $ 10,643 $ 290
Capital expenditures $ 21,590 $ 20,897 $ 693
Operating income $ 2,711 $ 5,630 $(2,919)
----------------------------------------------------------------------
SELECTED BUSINESS SEGMENT DATA (UNAUDITED)
For the 6 months ending June 30, 2006 and 2005
----------------------------------------------------------------------
Year-to-date
-------------------
(in thousands, except sales price data) 2006 2005 Change
----------------------------------------------------------------------
Oil and Gas Operations
Operating revenues
Natural gas $222,278 $162,001 $ 60,277
Oil 89,617 54,804 34,813
Natural gas liquids 23,484 17,798 5,686
Other 3,318 2,705 613
----------------------------------------------------------------------
Total $338,697 $237,308 $101,389
----------------------------------------------------------------------
Production volume from continuing
operations
Natural gas (MMcf) 31,052 29,858 1,194
Oil (MBbl) 1,832 1,666 166
Natural gas liquids (MMgal) 36.7 34.4 2.3
Production volumes from continuing ops.
(MMcfe) 47,285 44,767 2,518
Total production volumes (MMcfe) 47,284 44,825 2,459
Revenue per unit of production including
effects of all derivative instruments
Natural gas (Mcf) $ 7.16 $ 5.43 $ 1.73
Oil (barrel) $ 48.93 $ 32.89 $ 16.04
Natural gas liquids (gallon) $ 0.64 $ 0.52 $ 0.12
Other data from continuing operations
Lease operating expense (LOE)
LOE and other $ 65,484 $ 48,115 $ 17,369
Production taxes 25,852 22,073 3,779
----------------------------------------------------------------------
Total $ 91,336 $ 70,188 $ 21,148
----------------------------------------------------------------------
Depreciation, depletion and
amortization $ 47,117 $ 43,470 $ 3,647
Capital expenditures $ 95,557 $ 88,509 $ 7,048
Exploration expenditures $ 1,526 $ 494 $ 1,032
Operating income $175,677 $104,346 $ 71,331
----------------------------------------------------------------------
Natural Gas Distribution
Operating revenues
Residential $286,001 $242,932 $ 43,069
Commercial and industrial 117,413 94,880 22,533
Transportation 22,996 23,274 (278)
Other 5,409 4,239 1,170
----------------------------------------------------------------------
Total $431,819 $365,325 $ 66,494
----------------------------------------------------------------------
Gas delivery volumes (MMcf)
Residential 14,980 17,183 (2,203)
Commercial and industrial 7,025 7,706 (681)
Transportation 24,948 25,683 (735)
----------------------------------------------------------------------
Total 46,953 50,572 (3,619)
----------------------------------------------------------------------
Other data
Depreciation and amortization $ 21,679 $ 21,056 $ 623
Capital expenditures $ 40,435 $ 35,699 $ 4,736
Operating income $ 66,438 $ 72,034 $ 5,596
----------------------------------------------------------------------
SELECTED BUSINESS SEGMENT DATA (UNAUDITED)
For the 12 months ending June 30, 2006 and 2005
----------------------------------------------------------------------
Trailing 12 Months
-------------------
(in thousands, except sales price data) 2006 2005 Change
----------------------------------------------------------------------
Oil and Gas Operations
Operating revenues
Natural gas $425,913 $307,865 $118,048
Oil 151,464 107,504 43,960
Natural gas liquids 44,141 35,545 8,596
Other 7,566 5,154 2,412
----------------------------------------------------------------------
Total $629,084 $456,068 $173,016
----------------------------------------------------------------------
Production volumes from continuing
operations
Natural gas (MMcf) 62,242 59,591 2,651
Oil (MBbl) 3,481 3,397 84
Natural gas liquids (MMgal) 72.9 70.4 2.5
Production volumes from continuing ops.
(MMcfe) 93,538 90,030 3,508
Total production volumes (MMcfe) 93,558 90,121 3,437
Revenue per unit of production including
effects of all derivative instruments
Natural gas (Mcf) $ 6.84 $ 5.17 $ 1.67
Oil (barrel) $ 43.51 $ 31.65 $ 11.86
Natural gas liquids (gallon) $ 0.61 $ 0.50 $ 0.11
Other data
Lease operating expense (LOE)
LOE and other $121,610 $ 91,076 $ 30,534
Production taxes 56,050 42,668 13,382
----------------------------------------------------------------------
Total $177,660 $133,744 $ 43,916
----------------------------------------------------------------------
Depreciation, depletion and
amortization $ 92,987 $ 86,265 $ 6,722
Capital expenditures $360,759 $421,037 $ 60,278
Exploration expenditures $ 1,708 $ 2,494 $ (786)
Operating income $315,208 $198,988 $116,220
----------------------------------------------------------------------
Natural Gas Distribution
Operating revenues
Residential $427,821 $349,857 $ 77,964
Commercial and industrial 189,490 144,390 45,100
Transportation 43,012 43,018 (6)
Other 6,871 6,854 17
----------------------------------------------------------------------
Total $667,194 $544,119 $123,075
----------------------------------------------------------------------
Gas delivery volumes (MMcf)
Residential 22,398 23,696 (1,298)
Commercial and industrial 11,817 11,753 64
Transportation 49,115 52,287 (3,172)
----------------------------------------------------------------------
Total 83,330 87,736 (4,406)
----------------------------------------------------------------------
Other data
Depreciation and amortization $ 42,974 $ 41,469 $ 1,505
Capital expenditures $ 78,012 $ 63,686 $ 14,326
Operating income $ 67,326 $ 71,644 $ (4,318)
----------------------------------------------------------------------
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