Company Overview

Energen Corporation is capitalizing on its financial strength and capital discipline to succeed in challenging economic times. Underscoring our financial strength is an equity-rich balance sheet, significant discretionary cash flows, and some $465 million of available lines of credit. Our capital discipline is highlighted by spending plans that reflect today’s commodity price environment and outlook.

As a result of our financial strength and capital discipline, Energen enjoyed a successful 2009 that included the acquisition of an excellent oil property in the Permian Basin with current production and significant upside potential. In late June 2009, our oil and gas exploration and production company, Energen Resources Corporation, purchased Range Resources’ interests in the Fuhrman-Mascho Field, an oil play in the Permian Basin of West Texas. The Permian Basin is home to Energen Resources’ second largest area of operations.

Importantly, at a time when credit markets were tight, we were able to use available cash and existing credit facilities to pay for the acquisition; by the end of 2009, we had repaid the short-term debt with internally generated cash. 

2009 consolidated earnings, as expected, fell short of the company’s 2008 record, but substantial hedging of our natural gas, oil and natural gas liquids production was instrumental in mitigating our exposure to volatile commodity prices. A major contributor to Energen’s overall financial strength is our long-standing practice of hedging to limit the impact of commodity price volatility on earnings and cash flows. More than 72 percent of our estimated 2010 production of 114 billion cubic feet equivalent is hedged at above-market prices.

Energen’s Board of Directors increased the quarterly cash dividend in January 2010 for the 28th year in a row. The new annual dividend rate is 52 cents per share and reflects a five-year, compound annual growth of 5.4 percent.

With our considerable financial strength continuing in 2010, we are well-positioned to capitalize on additional property acquisitions and other opportunities that may arise and could see a return to record or near-record earnings in 2010.