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Corporate Overview
Energen Resources Corporation is the largest subsidiary of Energen Corporation, a $3.5 billion market cap energy firm headquartered in Birmingham, Alabama. Although natural gas comprises approximately 60 percent of Energen Resources’ proved reserves, the company also has a substantial amount of oil (30 percent) and natural gas liquids (10 percent) and is focusing in 2010 on developing its oil properties in the Permian Basin. As an acquire-and-exploit company, Energen Resources has invested approximately $3.7 billion to acquire and develop 2.7 Tcfe of U.S. reserves over the past 15 years. The company’s reserve additions have added 50 percent to its as-acquired reserves and substantially replaced cumulative production of some 1.1 Tcfe. In late June 2009, Energen Resources purchased Range Resources’ interests in the Fuhrman-Mascho Field, an oil play in the Permian Basin. Importantly, at a time when credit markets were tight, Energen was able to use available cash and existing credit facilities to pay for the acquisition; and, by the end of 2009, that short-term debt had been repaid with internally generated cash. Energen Resources’ production is estimated to increase modestly in 2010 to approximately 114 billion cubic feet equivalent, and more than 72 percent of this production has been hedged at above-market prices. The exploration of Alabama shales is a potential longer-term investment opportunity for Energen Resources. Test wells to-date have been inclusive. Energen Resources is drilling a new well in the first half of 2010 to test the Chattanooga shale, and additional testing of the Conasauga shale is expected to occur later in 2010. If even one of these two shale plays is economically viable, Energen could benefit from a multi-year development drilling program in its own backyard that significantly enhances organic production growth. * On the basis of U.S. proved reserves |
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