Energen Unit Completes Acquisition of San Juan Properties.

BIRMINGHAM, Ala. -- Energen Corporation (NYSE:EGN) today announced that its oil and gas acquisition and development subsidiary, Energen Resources Corporation, has closed on its previously announced purchase of San Juan Basin coalbed methane properties from a private company for an adjusted purchase price of $263 million. The effective date of the acquisition was August 1, 2004.

Located in the under-pressured Fruitland coal play, more than half of the estimated 240 billion cubic feet equivalent (Bcfe) of proved natural gas and natural gas liquids (NGL) reserves are behind pipe and undeveloped; natural gas accounts for approximately 80 percent of the estimated proved reserves, with NGL comprising the balance.

The Company also estimates that there are up to 60 Bcfe of probable reserves. A large development inventory from the acquisition is estimated at more than 110 infill wells. Future development costs are expected to be approximately $50 million.

"We are very pleased to have completed this, our largest acquisition of domestic oil and gas properties to date," said James McManus, president and chief operating officer of Energen Resources. "And we are eager to begin the next phase of the project as we utilize our coalbed methane expertise to develop the significant undeveloped reserves."

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.