Energen Reports 12% Increase in Second Quarter Earnings; Management Sees Significant Earnings Growth in Fiscal Years 2001 and 2002

Apr 25, 2001, 01:00 ET from Energen Corporation

    BIRMINGHAM, Ala., April 25 /PRNewswire/ -- Energen Corporation (NYSE:   EGN)
 today reported that it earned $1.52 per diluted share in the second quarter of
 its fiscal year 2001, an increase of 12 percent over the same period last
 year.  For the three months ending March 31, 2001, Energen's net income
 totaled $47 million as compared with $41.2 million, or $1.36 per diluted
 share, in the same period last year.
     "At the mid-point of our fiscal year, we believe that Energen is well on
 its way to a fifth consecutive year of record earnings in 2001," said Mike
 Warren, Energen's chairman and chief executive officer.  "In addition,
 Energen's earnings growth prospects in 2002 are very strong as most of our
 older natural gas production hedges give way to more recent, higher priced
 hedges that better reflect today's market for natural gas.  We believe Energen
 could reasonably see 25- to 35-percent increases in diluted earnings per share
 (EPS) in both 2001 and 2002."
     Higher realized sales prices for its natural gas, oil and natural gas
 liquids (NGL) production continued to drive the performance of Energen's non-
 regulated oil and gas acquisition and exploitation company, Energen Resources
 Corporation, in the second fiscal quarter.  The earnings contribution from
 Alabama Gas Corporation (Alagasco), Energen's natural gas utility, was
 influenced negatively by a variety of factors largely associated with the
 significantly colder weather and higher natural gas prices experienced during
 the just-completed winter.
     Energen Resources' net income for the second quarter totaled $19.8 million
 -- a 30 percent increase over net income of $15.2 million in the same period
 last year.  The average realized sales price for Energen Resources' natural
 gas production increased 56 percent to $3.77 per thousand cubic feet (Mcf);
 natural gas accounted for more than 70 percent of Energen Resources' second
 quarter production.  Realized prices for oil, which accounted for
 approximately 18 percent of production, increased 35 percent to $23 per
 barrel.  Realized prices for NGL production increased 32 percent to $21.42 per
 barrel (51 cents per gallon).
     In addition to increased average sales prices, Energen Resources benefited
 from a commodity price-related increase in coalbed methane operating fees.
     Energen Resources' production decreased 2.5 billion cubic feet equivalent
 (Bcfe) over the same period last year to 16.2 Bcfe primarily due to normal
 production declines and miscellaneous property acquisition/swap adjustments.
     Alagasco's net income in the second fiscal quarter totaled $27.3 million
 as compared with $26.1 million in the same period last year.  This 5 percent
 increase in net income primarily was due to the utility's earning on a higher
 level of equity representing investment in utility plant.
     Unlike Energen Resources, Alagasco does not benefit from rising natural
 gas commodity prices because the utility's cost of gas supply is passed
 through to the customer without mark up.  In addition, significantly higher
 prices and significantly colder weather have caused the utility to fall short
 of internal projections.  Negatively affecting the utility's earnings in the
 second fiscal quarter were load loss in the large commercial and large
 industrial (LC&I) sector primarily due to higher natural gas prices and a
 general economic downturn; increased bad debt expense resulting from
 significantly higher natural gas prices and colder winter weather; greater-
 than-expected unaccounted-for gas; and higher interest expense.
     Weather during the second quarter that was 6 percent colder than normal
 and 28 percent colder than the same period last year (on the basis of billing
 degree days) drove a 22 percent increase in gas volumes sold to the utility's
 residential, small industrial and small commercial customers.
     The volume of gas transported by Alagasco, typically to LC&I customers
 whose usage essentially is not weather-related, declined 24 percent over the
 second quarter of last year.  More than 40 percent of this differential,
 however, reflects anticipated throughput decline resulting from an LC&I
 customer bankruptcy during the latter half of 2000.
 
     YEAR-TO-DATE EARNINGS UP 19%
     For the first six months of fiscal year 2001, Energen earned
 $60.7 million, or $1.97 per diluted share.  For the same period last year,
 consolidated net income was $50.3 million, or $1.66 per diluted share.
     Increased realized commodity prices more than compensated for a 7 percent
 decline in production as Energen Resources' net income increased 50 percent
 over the same period last year to $29.7 million.  Energen Resources' realized
 natural gas prices increased 37 percent to $3.25 per Mcf while both oil and
 NGL prices rose 40 percent to $22.97 per barrel and $21 per barrel (50 cents
 per gallon), respectively.
     Alagasco's net income for the first six months of fiscal year 2001 totaled
 $31.4 million, a small increase over net income of $30.7 million in the same
 period last year.  The same factors that influenced the second quarter
 comparison (above) applied to the year-to-date comparision.  On the basis of
 billing degree days, weather in Alagasco's service area October 2000 through
 March 2001 was 7 percent colder than normal and 28.5 percent colder than the
 same period last year.  A temperature adjustment mechanism largely negates the
 impact of temperature variances on the company's earnings.
 
     12-MONTHS EARNINGS INCREASE 38%
     For the 12 months ended March 31, 2001, Energen's net income totaled
 $63.4 million, or $2.08 per diluted share.  This reflects a 38 percent
 increase in diluted EPS over the prior-year 12-months period.  For the
 12 months ending March 31, 2000, Energen reported net income of $45.5 million,
 or $1.51 per diluted share.
     Energen Resources' net income almost doubled to $37.3 million over
 earnings of $19.2 million in the same period last year.  Significantly higher
 realized prices for natural gas, oil and NGL production more than compensated
 for decreased production primarily resulting from prior-period property sales.
     Alagasco's net income for the 12-month period increased slightly to
  $27 million as the utility earned on a higher level of equity incurred to
 improve its distribution system and its service to customers.
 
     FY01 EARNINGS PROSPECTS STRONG
     "A colder-than-normal winter and higher natural gas prices are having a
 mixed impact on Energen's two lines of business," Warren said.  "At the end of
 the day, assuming a continuation of $5-plus natural gas prices and $26-plus
 oil prices for the remainder of the fiscal year, Energen is well-positioned to
 realize earnings in fiscal year 2001 of approximately $2.35 per diluted share,
 with some upside potential.  This includes our revised expectation that
 Alagasco's earnings will fall below original projections."
     For fiscal year 2001, Energen estimates that Alagasco will earn a
 12.4 percent return on average equity at fiscal year end of approximately
 $212 million.  In addition, Energen's 2001 earnings projection assumes that
 New York Mercantile Exchange (NYMEX) prices applicable to Energen Resources'
 unhedged production volumes for the remainder of the fiscal year will average
 $5.25 per Mcf for gas and $26 per barrel for oil.
     Approximately 80 percent of Energen Resources' natural gas production and
 about 55 percent of its oil production are hedged for the remainder of fiscal
 year 2001.  Relative to unhedged volumes in the last six months of fiscal year
 2001, Energen estimates that every 10 cents per Mcf change in the average
 NYMEX gas price from the $5.25 per Mcf assumption will have a $150,000 effect
 on net income and that every $1 per barrel change in the average NYMEX oil
 price from the $26 per barrel assumption, together with a corresponding change
 in the NGL price, will have a $500,000 effect on net income.
 
     MANAGEMENT SEES SIGNIFICANT EARNINGS GROWTH IN FY02
     "Energen is an earnings-driven company," Warren said.  "As such, we hedge
 a significant portion of Energen Resources' flowing production. Immediately
 following a property acquisition, for example, we typically hedge flowing
 production for up to 36 months to help lock-in our targeted rates of return
 for that acquisition.  We also hedge up to 80 percent of our total estimated
 production in any given fiscal year.  As most of our older, lower-priced hedge
 positions roll off by the end of this fiscal year, we are well-positioned to
 capitalize on the earnings uplift provided by a smaller hedge position and the
 prospects for strong commodity prices in fiscal year 2002."
 The recent era of sustained high commodity prices has not been without
 challenges for Energen Resources, as capital and operating costs also have
 escalated. "In looking toward fiscal year 2002, we have adjusted upward our
 commodity price expectations and retooled our projections based on the
 realities of significantly higher service costs," Warren said. "While the
 result is slightly less than we had anticipated previously, we believe that
 consolidated earnings of $3 per diluted share are well within reason."
     Warren noted that this estimate assumes average NYMEX prices for Energen
 Resources' unhedged production volumes of $4.25 per Mcf for natural gas and
 $25 per barrel for oil.  At the close of market Tuesday, NYMEX natural gas and
 oil prices for the 12 months comprising Energen's fiscal year 2002 averaged
 $5.06 per Mcf and $26 per barrel, respectively.
     Revised production estimates for fiscal year 2002 total 76.1 Bcfe,
 including 4.4 Bcfe from anticipated acquisitions and exploration activity.
 Excluding these acquisition and exploration volumes, Energen Resources has
 hedges in place for approximately 27 percent of its estimated production at an
 average NYMEX price of $3.97 per Mcf.  Another 29 percent of this gas
 production is subject to physical sales contracts with a $4 per Mcf (NYMEX)
 cap.  Excluding anticipated acquisitions and exploration production, Energen
 Resources' 2002 oil and NGL production is estimated to be 2.6 million barrels
 and 1.6 million barrels, respectively, and none of this production is hedged.
     With respect to flowing production and production expected to come on line
 during the year as the result of prior-year and current-year exploitation
 activities, Energen estimates that every 10 cents per Mcf change in the
 average NYMEX natural gas price from the $4.25 per Mcf assumption will have a
 $1 million impact on net income.  For every $1 per barrel change in the
 average NYMEX oil price from the $25 per barrel planning assumption, together
 with a corresponding change in the price of natural gas liquids, the net
 income impact in fiscal year 2002 should approximate $2 million.  Because
 Energen Resources' acquisitions are rate-of-return driven, the relationship
 between acquired production and capital investment will reflect commodity
 prices at the time of the transaction.
     For fiscal year 2002, Alagasco is expected to earn within its allowed
 range of return on 13-month average equity of approximately $220 million, and
 customer growth is expected to remain less than 1 percent.
     "As we look to the future, we fully expect Energen Resources to remain the
 dominant driver of corporate earnings growth," Warren said.  "At the same
 time, Alagasco should continue to provide an excellent foundation for our
 business."
     Energen Corporation is a diversified energy holding company with
 headquarters in Birmingham, Alabama.  Its two lines of business are natural
 gas distribution in central and north Alabama and the acquisition,
 exploitation, exploration and production of natural gas, oil and natural gas
 liquids onshore in North America.  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.
 
                   Consolidated Statements of Income (Unaudited)
                  For the 3 months ending March 31, 2001 and 2000
 
 
 
                                            2nd Quarter
     (in thousands, except
      per share data)                   2001            2000        Change
 
     Operating Revenues
     Natural gas distribution       $270,286        $158,548      $111,738
     Oil and gas operations           63,194          48,908        14,286
 
       Total operating revenues      333,480         207,456       126,024
 
 
     Operating Expenses
     Cost of gas                     174,136          71,270       102,866
     Operations & maintenance         46,264          42,506         3,758
     DD&A                             20,551          21,693        (1,142)
     Taxes, other than income taxes   23,809          15,623         8,186
 
       Total operating expenses      264,760         151,092       113,668
 
 
     Operating Income                 68,720          56,364        12,356
 
 
     Other Income (Expense)
     Interest expense                (10,606)         (9,247)       (1,359)
     Other, net                          345             321            24
 
 
       Total other expense           (10,261)         (8,926)       (1,335)
 
 
     Income Before Income Taxes       58,459          47,438        11,021
     Income tax expense               11,467           6,272         5,195
 
     Net Income                      $46,992         $41,166        $5,826
 
     Diluted Earnings Per Share        $1.52           $1.36         $0.16
 
     Basic Earnings Per Share          $1.53           $1.37         $0.16
 
     Diluted Avg. Common
      Shares Outstanding              30,997          30,364           633
 
     Basic Avg. Common
      Shares Outstanding              30,662          30,129           533
 
     Dividends Per Share              $0.170          $0.165        $0.005
 
 
 
                   Consolidated Statements of Income (Unaudited)
                  For the 6 months ending March 31, 2001 and 2000
 
 
                                            Year to Date
     (in thousands, except
      per share data)                   2001            2000        Change
 
     Operating Revenues
     Natural gas distribution       $389,412        $243,974      $145,438
     Oil and gas operations          119,965          92,491        27,474
 
       Total operating revenues      509,377         336,465       172,912
 
 
     Operating Expenses
     Cost of gas                     241,319         107,918       133,401
     Operations & maintenance         91,714          83,864         7,850
     DD&A                             40,490          42,737        (2,247)
     Taxes, other than income taxes   39,418          26,188        13,230
 
       Total operating expenses      412,941         260,707       152,234
 
 
     Operating Income                 96,436          75,758        20,678
 
 
     Other Income (Expense)
     Interest expense                (20,846)        (18,685)       (2,161)
     Other, net                        1,008             773           235
 
       Total other expense           (19,838)        (17,912)       (1,926)
 
 
     Income Before Income Taxes       76,598          57,846        18,752
     Income tax expense               15,887           7,544         8,343
 
     Net Income                      $60,711         $50,302       $10,409
 
     Diluted Earnings Per Share        $1.97           $1.66         $0.31
 
     Basic Earnings Per Share          $1.99           $1.67         $0.32
 
     Diluted Avg. Common
      Shares Outstanding              30,881          30,334           547
 
     Basic Avg. Common
      Shares Outstanding              30,562          30,081           481
 
 
     Dividends Per Share               $0.34           $0.33         $0.01
 
 
                   Consolidated Statements of Income (Unaudited)
                  For the 12 months ending March 31, 2001 and 2000
 
                                         Trailing 12 Months
     (in thousands, except
      per share data)                   2001            2000        Change
 
     Operating Revenues
     Natural gas distribution       $511,599        $353,279      $158,320
     Oil and gas operations          216,908         178,345        38,563
 
       Total operating revenues      728,507         531,624       196,883
 
     Operating Expenses
     Cost of gas                     287,602         145,719       141,883
     Operations & maintenance        179,486         168,280        11,206
     DD&A                             84,826          85,705         (879)
     Taxes, other than income taxes   60,114          42,519        17,595
 
       Total operating expenses      612,028         442,223       169,805
 
 
     Operating Income                116,479          89,401        27,078
 
     Other Income (Expense)
     Interest expense                (39,930)        (36,653)       (3,277)
     Other, net                        2,010           1,594           416
 
       Total other expense           (37,920)        (35,059)       (2,861)
 
     Income Before Income Taxes       78,559          54,342        24,217
     Income tax expense               15,132           8,841         6,291
 
     Net Income                      $63,427         $45,501       $17,926
 
     Diluted Earnings Per Share        $2.08           $1.51         $0.57
 
     Basic Earnings Per Share          $2.09           $1.52         $0.57
 
     Diluted Avg. Common
      Shares Outstanding              30,551          30,184           367
 
     Basic Avg. Common
      Shares Outstanding              30,312          29,928           384
 
     Dividends Per Share              $0.675          $0.655         $0.02
 
 
 
                     Selected Business Segment Data (Unaudited)
                  For the 3 months ending March 31, 2001 and 2000
 
                                             2nd Quarter
     (in thousands, except
      sales price data)                 2001            2000        Change
 
 
     Natural Gas Distribution
     Operating revenues
       Residential                  $189,457        $108,132       $81,325
       Commercial and industrial
        - small                       70,500          37,868        32,632
       Transportation                  9,213          10,783        (1,570)
       Other                           1,116           1,765          (649)
 
         Total                      $270,286        $158,548      $111,738
 
 
     Gas delivery volumes (MMcf)
       Residential                    16,875          13,838         3,037
       Commercial and industrial
         - small                       6,676           5,496         1,180
       Transportation                 13,061          17,129         (4,068)
         Total                        36,612          36,463           149
 
     Other data
       Depreciation and amortization  $7,647          $7,120          $527
       Capital expenditures          $14,115         $14,999         $(884)
       Operating income              $44,873         $43,212        $1,661
 
     Oil and Gas Operations
     Operating revenues
       Natural gas                   $43,233         $30,880       $12,353
       Oil                            11,264          10,603           661
       Natural gas liquids             6,329           5,712           617
       Other                           2,368           1,713           655
         Total                       $63,194         $48,908       $14,286
 
     Sales volume
       Natural gas (MMcf)             11,466          12,810        (1,344)
       Oil (MBbl)                        490             622          (132)
       Natural gas liquids (MBbl)        296             353           (57)
     Average sales price
       Natural gas (Mcf)               $3.77           $2.41         $1.36
       Oil (barrel)                   $23.00          $17.04         $5.96
       Natural gas liquids (barrel)   $21.42          $16.19         $5.23
     Other data
       DD&A                          $12,904         $14,573       $(1,669)
       Capital expenditures         $ 55,714         $14,893       $40,821
       Exploration expense              $179          $1,151         $(972)
       Operating income              $24,210         $13,478       $10,732
 
 
                     Selected Business Segment Data (Unaudited)
                  For the 6 months ending March 31, 2001 and 2000
 
 
                                              Year to Date
      (in thousands, except
      sales price data)                 2001            2000        Change
 
 
     Natural Gas Distribution
     Operating revenues
       Residential                  $266,933        $162,856      $104,077
       Commercial and industrial
        - small                      101,536          58,069        43,467
       Transportation                 18,729          20,058        (1,329)
       Other                           2,214           2,991          (777)
        Total                       $389,412        $243,974      $145,438
 
     Gas delivery volumes (MMcf)
       Residential                    24,105          19,767         4,338
       Commercial and industrial
        - small                       10,014           8,299         1,715
       Transportation                 26,912          34,348        (7,436)
        Total                         61,031          62,414        (1,383)
 
     Other data
       Depreciation and amortization $15,201         $14,137        $1,064
       Capital expenditures          $24,240         $24,616         $(376)
       Operating income              $53,465         $52,562          $903
 
 
     Oil and Gas Operations
     Operating revenues
       Natural gas                   $76,141         $59,568       $16,573
       Oil                            24,112          19,717         4,395
       Natural gas liquids            14,564          10,394         4,170
       Other                           5,148           2,812         2,336
        Total                       $119,965         $92,491       $27,474
 
 
     Sales volume
       Natural gas (MMcf)             23,413          25,108        (1,695)
       Oil (MBbl)                      1,050           1,203          (153)
       Natural gas liquids (MBbl)        694             694           ---
     Average sales price
       Natural gas (Mcf)               $3.25           $2.37         $0.88
       Oil (barrel)                   $22.97          $16.39         $6.58
       Natural gas liquids (barrel)   $21.00          $14.97         $6.03
     Other data
       DD&A                          $25,289         $28,600       $(3,311)
       Capital expenditures         $ 65,801         $26,487       $39,314
       Exploration expense            $1,264          $2,554       $(1,290)
       Operating income              $43,782         $23,810       $19,972
 
 
                     Selected Business Segment Data (Unaudited)
                  For the 12 months ending March 31, 2001 and 2000
 
 
                                          Trailing 12 Months
     (in thousands, except
     sales price data)                  2001            2000        Change
 
 
     Natural Gas Distribution
     Operating revenues
       Residential                  $337,916        $227,554      $110,362
       Commercial and industrial
        - small                      131,988          84,486        47,502
       Transportation                 33,984          35,513        (1,529)
       Other                           7,711           5,726         1,985
        Total                       $511,599        $353,279      $158,320
 
 
     Gas delivery volumes (MMcf)
       Residential                    30,407          26,313         4,094
       Commercial and industrial
        - small                       13,807          12,229         1,578
       Transportation                 63,098          69,945        (6,847)
        Total                        107,312         108,487        (1,175)
 
 
     Other data
       Depreciation and amortization $29,772         $27,674        $2,098
       Capital expenditures          $66,697         $51,012       $15,685
       Operating income              $49,966         $49,192          $774
 
     Oil and Gas Operations
     Operating revenues
       Natural gas                  $136,253        $114,162       $22,091
       Oil                            46,140          38,749         7,391
       Natural gas liquids            27,084          15,574        11,510
       Other                           7,431           9,860        (2,429)
         Total                      $216,908        $178,345       $38,563
 
 
     Sales volume
       Natural gas (MMcf)             46,385          50,249        (3,864)
       Oil (MBbl)                      2,152           2,691          (539)
       Natural gas liquids (MBbl)      1,428           1,168           260
     Average sales price
       Natural gas (Mcf)               $2.94           $2.27         $0.67
       Oil (barrel)                   $21.45          $14.40         $7.05
       Natural gas liquids (barrel)   $18.96          $13.34         $5.62
     Other data
       DD&A                          $55,054         $58,031       $(2,977)
       Capital expenditures        $ 106,404         $66,317       $40,087
       Exploration expense            $3,588          $5,403       $(1,815)
       Operating income              $68,330         $40,754       $27,576
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X24421352
 
 

SOURCE Energen Corporation
    BIRMINGHAM, Ala., April 25 /PRNewswire/ -- Energen Corporation (NYSE:   EGN)
 today reported that it earned $1.52 per diluted share in the second quarter of
 its fiscal year 2001, an increase of 12 percent over the same period last
 year.  For the three months ending March 31, 2001, Energen's net income
 totaled $47 million as compared with $41.2 million, or $1.36 per diluted
 share, in the same period last year.
     "At the mid-point of our fiscal year, we believe that Energen is well on
 its way to a fifth consecutive year of record earnings in 2001," said Mike
 Warren, Energen's chairman and chief executive officer.  "In addition,
 Energen's earnings growth prospects in 2002 are very strong as most of our
 older natural gas production hedges give way to more recent, higher priced
 hedges that better reflect today's market for natural gas.  We believe Energen
 could reasonably see 25- to 35-percent increases in diluted earnings per share
 (EPS) in both 2001 and 2002."
     Higher realized sales prices for its natural gas, oil and natural gas
 liquids (NGL) production continued to drive the performance of Energen's non-
 regulated oil and gas acquisition and exploitation company, Energen Resources
 Corporation, in the second fiscal quarter.  The earnings contribution from
 Alabama Gas Corporation (Alagasco), Energen's natural gas utility, was
 influenced negatively by a variety of factors largely associated with the
 significantly colder weather and higher natural gas prices experienced during
 the just-completed winter.
     Energen Resources' net income for the second quarter totaled $19.8 million
 -- a 30 percent increase over net income of $15.2 million in the same period
 last year.  The average realized sales price for Energen Resources' natural
 gas production increased 56 percent to $3.77 per thousand cubic feet (Mcf);
 natural gas accounted for more than 70 percent of Energen Resources' second
 quarter production.  Realized prices for oil, which accounted for
 approximately 18 percent of production, increased 35 percent to $23 per
 barrel.  Realized prices for NGL production increased 32 percent to $21.42 per
 barrel (51 cents per gallon).
     In addition to increased average sales prices, Energen Resources benefited
 from a commodity price-related increase in coalbed methane operating fees.
     Energen Resources' production decreased 2.5 billion cubic feet equivalent
 (Bcfe) over the same period last year to 16.2 Bcfe primarily due to normal
 production declines and miscellaneous property acquisition/swap adjustments.
     Alagasco's net income in the second fiscal quarter totaled $27.3 million
 as compared with $26.1 million in the same period last year.  This 5 percent
 increase in net income primarily was due to the utility's earning on a higher
 level of equity representing investment in utility plant.
     Unlike Energen Resources, Alagasco does not benefit from rising natural
 gas commodity prices because the utility's cost of gas supply is passed
 through to the customer without mark up.  In addition, significantly higher
 prices and significantly colder weather have caused the utility to fall short
 of internal projections.  Negatively affecting the utility's earnings in the
 second fiscal quarter were load loss in the large commercial and large
 industrial (LC&I) sector primarily due to higher natural gas prices and a
 general economic downturn; increased bad debt expense resulting from
 significantly higher natural gas prices and colder winter weather; greater-
 than-expected unaccounted-for gas; and higher interest expense.
     Weather during the second quarter that was 6 percent colder than normal
 and 28 percent colder than the same period last year (on the basis of billing
 degree days) drove a 22 percent increase in gas volumes sold to the utility's
 residential, small industrial and small commercial customers.
     The volume of gas transported by Alagasco, typically to LC&I customers
 whose usage essentially is not weather-related, declined 24 percent over the
 second quarter of last year.  More than 40 percent of this differential,
 however, reflects anticipated throughput decline resulting from an LC&I
 customer bankruptcy during the latter half of 2000.
 
     YEAR-TO-DATE EARNINGS UP 19%
     For the first six months of fiscal year 2001, Energen earned
 $60.7 million, or $1.97 per diluted share.  For the same period last year,
 consolidated net income was $50.3 million, or $1.66 per diluted share.
     Increased realized commodity prices more than compensated for a 7 percent
 decline in production as Energen Resources' net income increased 50 percent
 over the same period last year to $29.7 million.  Energen Resources' realized
 natural gas prices increased 37 percent to $3.25 per Mcf while both oil and
 NGL prices rose 40 percent to $22.97 per barrel and $21 per barrel (50 cents
 per gallon), respectively.
     Alagasco's net income for the first six months of fiscal year 2001 totaled
 $31.4 million, a small increase over net income of $30.7 million in the same
 period last year.  The same factors that influenced the second quarter
 comparison (above) applied to the year-to-date comparision.  On the basis of
 billing degree days, weather in Alagasco's service area October 2000 through
 March 2001 was 7 percent colder than normal and 28.5 percent colder than the
 same period last year.  A temperature adjustment mechanism largely negates the
 impact of temperature variances on the company's earnings.
 
     12-MONTHS EARNINGS INCREASE 38%
     For the 12 months ended March 31, 2001, Energen's net income totaled
 $63.4 million, or $2.08 per diluted share.  This reflects a 38 percent
 increase in diluted EPS over the prior-year 12-months period.  For the
 12 months ending March 31, 2000, Energen reported net income of $45.5 million,
 or $1.51 per diluted share.
     Energen Resources' net income almost doubled to $37.3 million over
 earnings of $19.2 million in the same period last year.  Significantly higher
 realized prices for natural gas, oil and NGL production more than compensated
 for decreased production primarily resulting from prior-period property sales.
     Alagasco's net income for the 12-month period increased slightly to
  $27 million as the utility earned on a higher level of equity incurred to
 improve its distribution system and its service to customers.
 
     FY01 EARNINGS PROSPECTS STRONG
     "A colder-than-normal winter and higher natural gas prices are having a
 mixed impact on Energen's two lines of business," Warren said.  "At the end of
 the day, assuming a continuation of $5-plus natural gas prices and $26-plus
 oil prices for the remainder of the fiscal year, Energen is well-positioned to
 realize earnings in fiscal year 2001 of approximately $2.35 per diluted share,
 with some upside potential.  This includes our revised expectation that
 Alagasco's earnings will fall below original projections."
     For fiscal year 2001, Energen estimates that Alagasco will earn a
 12.4 percent return on average equity at fiscal year end of approximately
 $212 million.  In addition, Energen's 2001 earnings projection assumes that
 New York Mercantile Exchange (NYMEX) prices applicable to Energen Resources'
 unhedged production volumes for the remainder of the fiscal year will average
 $5.25 per Mcf for gas and $26 per barrel for oil.
     Approximately 80 percent of Energen Resources' natural gas production and
 about 55 percent of its oil production are hedged for the remainder of fiscal
 year 2001.  Relative to unhedged volumes in the last six months of fiscal year
 2001, Energen estimates that every 10 cents per Mcf change in the average
 NYMEX gas price from the $5.25 per Mcf assumption will have a $150,000 effect
 on net income and that every $1 per barrel change in the average NYMEX oil
 price from the $26 per barrel assumption, together with a corresponding change
 in the NGL price, will have a $500,000 effect on net income.
 
     MANAGEMENT SEES SIGNIFICANT EARNINGS GROWTH IN FY02
     "Energen is an earnings-driven company," Warren said.  "As such, we hedge
 a significant portion of Energen Resources' flowing production. Immediately
 following a property acquisition, for example, we typically hedge flowing
 production for up to 36 months to help lock-in our targeted rates of return
 for that acquisition.  We also hedge up to 80 percent of our total estimated
 production in any given fiscal year.  As most of our older, lower-priced hedge
 positions roll off by the end of this fiscal year, we are well-positioned to
 capitalize on the earnings uplift provided by a smaller hedge position and the
 prospects for strong commodity prices in fiscal year 2002."
 The recent era of sustained high commodity prices has not been without
 challenges for Energen Resources, as capital and operating costs also have
 escalated. "In looking toward fiscal year 2002, we have adjusted upward our
 commodity price expectations and retooled our projections based on the
 realities of significantly higher service costs," Warren said. "While the
 result is slightly less than we had anticipated previously, we believe that
 consolidated earnings of $3 per diluted share are well within reason."
     Warren noted that this estimate assumes average NYMEX prices for Energen
 Resources' unhedged production volumes of $4.25 per Mcf for natural gas and
 $25 per barrel for oil.  At the close of market Tuesday, NYMEX natural gas and
 oil prices for the 12 months comprising Energen's fiscal year 2002 averaged
 $5.06 per Mcf and $26 per barrel, respectively.
     Revised production estimates for fiscal year 2002 total 76.1 Bcfe,
 including 4.4 Bcfe from anticipated acquisitions and exploration activity.
 Excluding these acquisition and exploration volumes, Energen Resources has
 hedges in place for approximately 27 percent of its estimated production at an
 average NYMEX price of $3.97 per Mcf.  Another 29 percent of this gas
 production is subject to physical sales contracts with a $4 per Mcf (NYMEX)
 cap.  Excluding anticipated acquisitions and exploration production, Energen
 Resources' 2002 oil and NGL production is estimated to be 2.6 million barrels
 and 1.6 million barrels, respectively, and none of this production is hedged.
     With respect to flowing production and production expected to come on line
 during the year as the result of prior-year and current-year exploitation
 activities, Energen estimates that every 10 cents per Mcf change in the
 average NYMEX natural gas price from the $4.25 per Mcf assumption will have a
 $1 million impact on net income.  For every $1 per barrel change in the
 average NYMEX oil price from the $25 per barrel planning assumption, together
 with a corresponding change in the price of natural gas liquids, the net
 income impact in fiscal year 2002 should approximate $2 million.  Because
 Energen Resources' acquisitions are rate-of-return driven, the relationship
 between acquired production and capital investment will reflect commodity
 prices at the time of the transaction.
     For fiscal year 2002, Alagasco is expected to earn within its allowed
 range of return on 13-month average equity of approximately $220 million, and
 customer growth is expected to remain less than 1 percent.
     "As we look to the future, we fully expect Energen Resources to remain the
 dominant driver of corporate earnings growth," Warren said.  "At the same
 time, Alagasco should continue to provide an excellent foundation for our
 business."
     Energen Corporation is a diversified energy holding company with
 headquarters in Birmingham, Alabama.  Its two lines of business are natural
 gas distribution in central and north Alabama and the acquisition,
 exploitation, exploration and production of natural gas, oil and natural gas
 liquids onshore in North America.  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.
 
                   Consolidated Statements of Income (Unaudited)
                  For the 3 months ending March 31, 2001 and 2000
 
 
 
                                            2nd Quarter
     (in thousands, except
      per share data)                   2001            2000        Change
 
     Operating Revenues
     Natural gas distribution       $270,286        $158,548      $111,738
     Oil and gas operations           63,194          48,908        14,286
 
       Total operating revenues      333,480         207,456       126,024
 
 
     Operating Expenses
     Cost of gas                     174,136          71,270       102,866
     Operations & maintenance         46,264          42,506         3,758
     DD&A                             20,551          21,693        (1,142)
     Taxes, other than income taxes   23,809          15,623         8,186
 
       Total operating expenses      264,760         151,092       113,668
 
 
     Operating Income                 68,720          56,364        12,356
 
 
     Other Income (Expense)
     Interest expense                (10,606)         (9,247)       (1,359)
     Other, net                          345             321            24
 
 
       Total other expense           (10,261)         (8,926)       (1,335)
 
 
     Income Before Income Taxes       58,459          47,438        11,021
     Income tax expense               11,467           6,272         5,195
 
     Net Income                      $46,992         $41,166        $5,826
 
     Diluted Earnings Per Share        $1.52           $1.36         $0.16
 
     Basic Earnings Per Share          $1.53           $1.37         $0.16
 
     Diluted Avg. Common
      Shares Outstanding              30,997          30,364           633
 
     Basic Avg. Common
      Shares Outstanding              30,662          30,129           533
 
     Dividends Per Share              $0.170          $0.165        $0.005
 
 
 
                   Consolidated Statements of Income (Unaudited)
                  For the 6 months ending March 31, 2001 and 2000
 
 
                                            Year to Date
     (in thousands, except
      per share data)                   2001            2000        Change
 
     Operating Revenues
     Natural gas distribution       $389,412        $243,974      $145,438
     Oil and gas operations          119,965          92,491        27,474
 
       Total operating revenues      509,377         336,465       172,912
 
 
     Operating Expenses
     Cost of gas                     241,319         107,918       133,401
     Operations & maintenance         91,714          83,864         7,850
     DD&A                             40,490          42,737        (2,247)
     Taxes, other than income taxes   39,418          26,188        13,230
 
       Total operating expenses      412,941         260,707       152,234
 
 
     Operating Income                 96,436          75,758        20,678
 
 
     Other Income (Expense)
     Interest expense                (20,846)        (18,685)       (2,161)
     Other, net                        1,008             773           235
 
       Total other expense           (19,838)        (17,912)       (1,926)
 
 
     Income Before Income Taxes       76,598          57,846        18,752
     Income tax expense               15,887           7,544         8,343
 
     Net Income                      $60,711         $50,302       $10,409
 
     Diluted Earnings Per Share        $1.97           $1.66         $0.31
 
     Basic Earnings Per Share          $1.99           $1.67         $0.32
 
     Diluted Avg. Common
      Shares Outstanding              30,881          30,334           547
 
     Basic Avg. Common
      Shares Outstanding              30,562          30,081           481
 
 
     Dividends Per Share               $0.34           $0.33         $0.01
 
 
                   Consolidated Statements of Income (Unaudited)
                  For the 12 months ending March 31, 2001 and 2000
 
                                         Trailing 12 Months
     (in thousands, except
      per share data)                   2001            2000        Change
 
     Operating Revenues
     Natural gas distribution       $511,599        $353,279      $158,320
     Oil and gas operations          216,908         178,345        38,563
 
       Total operating revenues      728,507         531,624       196,883
 
     Operating Expenses
     Cost of gas                     287,602         145,719       141,883
     Operations & maintenance        179,486         168,280        11,206
     DD&A                             84,826          85,705         (879)
     Taxes, other than income taxes   60,114          42,519        17,595
 
       Total operating expenses      612,028         442,223       169,805
 
 
     Operating Income                116,479          89,401        27,078
 
     Other Income (Expense)
     Interest expense                (39,930)        (36,653)       (3,277)
     Other, net                        2,010           1,594           416
 
       Total other expense           (37,920)        (35,059)       (2,861)
 
     Income Before Income Taxes       78,559          54,342        24,217
     Income tax expense               15,132           8,841         6,291
 
     Net Income                      $63,427         $45,501       $17,926
 
     Diluted Earnings Per Share        $2.08           $1.51         $0.57
 
     Basic Earnings Per Share          $2.09           $1.52         $0.57
 
     Diluted Avg. Common
      Shares Outstanding              30,551          30,184           367
 
     Basic Avg. Common
      Shares Outstanding              30,312          29,928           384
 
     Dividends Per Share              $0.675          $0.655         $0.02
 
 
 
                     Selected Business Segment Data (Unaudited)
                  For the 3 months ending March 31, 2001 and 2000
 
                                             2nd Quarter
     (in thousands, except
      sales price data)                 2001            2000        Change
 
 
     Natural Gas Distribution
     Operating revenues
       Residential                  $189,457        $108,132       $81,325
       Commercial and industrial
        - small                       70,500          37,868        32,632
       Transportation                  9,213          10,783        (1,570)
       Other                           1,116           1,765          (649)
 
         Total                      $270,286        $158,548      $111,738
 
 
     Gas delivery volumes (MMcf)
       Residential                    16,875          13,838         3,037
       Commercial and industrial
         - small                       6,676           5,496         1,180
       Transportation                 13,061          17,129         (4,068)
         Total                        36,612          36,463           149
 
     Other data
       Depreciation and amortization  $7,647          $7,120          $527
       Capital expenditures          $14,115         $14,999         $(884)
       Operating income              $44,873         $43,212        $1,661
 
     Oil and Gas Operations
     Operating revenues
       Natural gas                   $43,233         $30,880       $12,353
       Oil                            11,264          10,603           661
       Natural gas liquids             6,329           5,712           617
       Other                           2,368           1,713           655
         Total                       $63,194         $48,908       $14,286
 
     Sales volume
       Natural gas (MMcf)             11,466          12,810        (1,344)
       Oil (MBbl)                        490             622          (132)
       Natural gas liquids (MBbl)        296             353           (57)
     Average sales price
       Natural gas (Mcf)               $3.77           $2.41         $1.36
       Oil (barrel)                   $23.00          $17.04         $5.96
       Natural gas liquids (barrel)   $21.42          $16.19         $5.23
     Other data
       DD&A                          $12,904         $14,573       $(1,669)
       Capital expenditures         $ 55,714         $14,893       $40,821
       Exploration expense              $179          $1,151         $(972)
       Operating income              $24,210         $13,478       $10,732
 
 
                     Selected Business Segment Data (Unaudited)
                  For the 6 months ending March 31, 2001 and 2000
 
 
                                              Year to Date
      (in thousands, except
      sales price data)                 2001            2000        Change
 
 
     Natural Gas Distribution
     Operating revenues
       Residential                  $266,933        $162,856      $104,077
       Commercial and industrial
        - small                      101,536          58,069        43,467
       Transportation                 18,729          20,058        (1,329)
       Other                           2,214           2,991          (777)
        Total                       $389,412        $243,974      $145,438
 
     Gas delivery volumes (MMcf)
       Residential                    24,105          19,767         4,338
       Commercial and industrial
        - small                       10,014           8,299         1,715
       Transportation                 26,912          34,348        (7,436)
        Total                         61,031          62,414        (1,383)
 
     Other data
       Depreciation and amortization $15,201         $14,137        $1,064
       Capital expenditures          $24,240         $24,616         $(376)
       Operating income              $53,465         $52,562          $903
 
 
     Oil and Gas Operations
     Operating revenues
       Natural gas                   $76,141         $59,568       $16,573
       Oil                            24,112          19,717         4,395
       Natural gas liquids            14,564          10,394         4,170
       Other                           5,148           2,812         2,336
        Total                       $119,965         $92,491       $27,474
 
 
     Sales volume
       Natural gas (MMcf)             23,413          25,108        (1,695)
       Oil (MBbl)                      1,050           1,203          (153)
       Natural gas liquids (MBbl)        694             694           ---
     Average sales price
       Natural gas (Mcf)               $3.25           $2.37         $0.88
       Oil (barrel)                   $22.97          $16.39         $6.58
       Natural gas liquids (barrel)   $21.00          $14.97         $6.03
     Other data
       DD&A                          $25,289         $28,600       $(3,311)
       Capital expenditures         $ 65,801         $26,487       $39,314
       Exploration expense            $1,264          $2,554       $(1,290)
       Operating income              $43,782         $23,810       $19,972
 
 
                     Selected Business Segment Data (Unaudited)
                  For the 12 months ending March 31, 2001 and 2000
 
 
                                          Trailing 12 Months
     (in thousands, except
     sales price data)                  2001            2000        Change
 
 
     Natural Gas Distribution
     Operating revenues
       Residential                  $337,916        $227,554      $110,362
       Commercial and industrial
        - small                      131,988          84,486        47,502
       Transportation                 33,984          35,513        (1,529)
       Other                           7,711           5,726         1,985
        Total                       $511,599        $353,279      $158,320
 
 
     Gas delivery volumes (MMcf)
       Residential                    30,407          26,313         4,094
       Commercial and industrial
        - small                       13,807          12,229         1,578
       Transportation                 63,098          69,945        (6,847)
        Total                        107,312         108,487        (1,175)
 
 
     Other data
       Depreciation and amortization $29,772         $27,674        $2,098
       Capital expenditures          $66,697         $51,012       $15,685
       Operating income              $49,966         $49,192          $774
 
     Oil and Gas Operations
     Operating revenues
       Natural gas                  $136,253        $114,162       $22,091
       Oil                            46,140          38,749         7,391
       Natural gas liquids            27,084          15,574        11,510
       Other                           7,431           9,860        (2,429)
         Total                      $216,908        $178,345       $38,563
 
 
     Sales volume
       Natural gas (MMcf)             46,385          50,249        (3,864)
       Oil (MBbl)                      2,152           2,691          (539)
       Natural gas liquids (MBbl)      1,428           1,168           260
     Average sales price
       Natural gas (Mcf)               $2.94           $2.27         $0.67
       Oil (barrel)                   $21.45          $14.40         $7.05
       Natural gas liquids (barrel)   $18.96          $13.34         $5.62
     Other data
       DD&A                          $55,054         $58,031       $(2,977)
       Capital expenditures        $ 106,404         $66,317       $40,087
       Exploration expense            $3,588          $5,403       $(1,815)
       Operating income              $68,330         $40,754       $27,576
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X24421352
 
 SOURCE  Energen Corporation