Energen Corp. (EGN, Financial) filed Quarterly Report for the period ended 2010-06-30.
Energen Corp. has a market cap of $3.26 billion; its shares were traded at around $45.3 with a P/E ratio of 11.5 and P/S ratio of 2.3. The dividend yield of Energen Corp. stocks is 1.1%. Energen Corp. had an annual average earning growth of 35.1% over the past 10 years. GuruFocus rated Energen Corp. the business predictability rank of 2.5-star.EGN is in the portfolios of Chuck Royce of Royce& Associates, Diamond Hill Capital of Diamond Hill Capital Management Inc, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC.
For the 2010 year-to-date, Energens net income totaled $172.3 million ($2.39 per diluted share) and compared favorably to net income of $150.6 million ($2.09 per diluted share) for the same period in the prior year. Energen Resources generated net income for the six months ended June 30, 2010, of $128.4 million as compared with $102 million in the previous period primarily as a result of higher commodity prices (approximately $47 million after-tax) and increased production volumes (approximately $7 million). Negatively affecting net income was the impact of higher DD&A expense (approximately $8 million after-tax), increased production taxes (approximately $3 million after-tax), increased administrative expense (approximately $4 million after-tax) and increased exploration expense (approximately $12 million after-tax) largely due to the $10 million after-tax Conasauga shale acreage write-off. Alagascos net income of $43.9 million in the current year-to-date compared to net income of $48.4 million in the same period in the previous year primarily due to the same reasons discussed above.
Revenues from oil and gas operations rose 18.2 percent to $234.6 million for the three months ended June 30, 2010 and 21.8 percent to $472.2 million in the year-to-date largely as a result of increased commodity prices along with the impact of higher oil and natural gas liquids production volumes. During the current quarter, revenue per unit of production for natural gas rose 9.1 percent to $6.84 per thousand cubic feet (Mcf), while oil revenue per unit of production increased 30.9 percent to $78.34 per barrel. Natural gas liquids revenue per unit of production fell 12.5 percent to an average price of $0.77 per gallon. In the year-to-date, revenue per unit of production for natural gas increased 9.5 percent to $7.02 per Mcf, oil revenue per unit of production rose 39.6 percent to $78.77 per barrel and natural gas liquids revenue per unit of production fell 3.5 percent to an average price of $0.82 per gallon.
Operations and maintenance (O&M) expense increased $21.4 million for the quarter and $24.6 in the year-to-date. Lease operating expense (excluding production taxes) increased $1.4 million for the quarter largely due to the June 2009 acquisition of Permian Basin oil properties (approximately $3 million) and increased electrical costs ($1 million) partially offset by lower workover expense ($1.8 million) and lower ad valorem taxes (approximately $0.7 million). In the year-to-date, lease operating expense (excluding production taxes) decreased $0.7 million primarily due to decreased workover expense ($2.7 million), lower nonoperated costs ($2.3 million), lower ad valorem taxes (approximately $1.3 million) and decreased repair and maintenance expense ($1 million) partially offset by the June 2009 acquisition of oil properties (approximately $5.6 million) and additional marketing and transportation costs ($1.4 million). Administrative expense increased $1.5 million for the three months ended June 30, 2010. For the six months ended June 30, 2010, administrative expense rose $5.6 million primarily due to higher labor and benefit costs primarily related to the Companys performance-based compensation plans (approximately $3.3 million) and increased legal expenses (approximately $1.3 million). Exploration expense rose $18.6 million in the second quarter of 2010 and $19.6 million year-to-date. In the second quarter of 2010, Energen Resources recorded a non-cash write-off of $16.1 million pre-tax of unproved leasehold associated with the deep Conasauga shale acreage.
Energen Resources DD&A expense for the quarter rose $6.8 million and increased $13.6 million year-to-date. The average depletion rate for the current quarter was $1.78 per thousand cubic feet equivalent (Mcfe) as compared to $1.57 per Mcfe in the same period a year ago. For the six months ended June 30, 2010, the average depletion rate was $1.77 per Mcfe as compared to $1.56 per Mcfe in the previous period. The increase in the current quarter and year-to-date per unit DD&A rate, which contributed approximately $7.5 million and $14.6 million, respectively, to the increase in DD&A expense, was largely due to higher development costs along with the reserve revisions associated with lower year-end reserve pricing. Partially offsetting the increases in DD&A, Energen Resources experienced higher production in low rate areas which was offset by lower production in high rate areas resulting in a net production volume impact of approximately $0.7 million and $1.3 million in the three months and six months ended June 30, 2010, respectively.
O&M expense rose 1 percent in the current quarter primarily due to higher distribution operation expenses ($0.7 million) and increased labor-related costs (approximately $0.6 million) partially offset by lower marketing expenses (approximately $1.2 million). In the six months ended June 30, 2010, O&M expense increased 1 percent primarily due to increased labor-related costs (approximately $2.4 million), increased consulting and technology costs (approximately $1.4 million) and increased distribution operation expenses (approximately $1.3 million). Partially offsetting these increases was a decrease to bad debt expense (approximately $4.2 million) which included the correction of a $3 million error identified by Alagasco, during the first quarter of 2010, in the calculation of the estimate of the allowance for doubtful accounts as of December 31, 2009. See Note 1, Basis of Presentation, in the Notes to Unaudited Condensed Financial Statements for further discussion.
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Energen Corp. has a market cap of $3.26 billion; its shares were traded at around $45.3 with a P/E ratio of 11.5 and P/S ratio of 2.3. The dividend yield of Energen Corp. stocks is 1.1%. Energen Corp. had an annual average earning growth of 35.1% over the past 10 years. GuruFocus rated Energen Corp. the business predictability rank of 2.5-star.EGN is in the portfolios of Chuck Royce of Royce& Associates, Diamond Hill Capital of Diamond Hill Capital Management Inc, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
Energens net income totaled $55.5 million ($0.77 per diluted share) for the three months ended June 30, 2010 compared with net income of $55 million ($0.76 per diluted share) for the same period in the prior year. Energen Resources Corporation, Energens oil and gas subsidiary, had net income for the three months ended June 30, 2010, of $56.8 million as compared with $54.9 million in the same quarter in the previous year. Significantly higher commodity prices (approximately $19 million after-tax) and increased production volumes (approximately $4 million after-tax) were partially offset by increased depreciation, depletion and amortization (DD&A) expense (approximately $4 million after-tax), higher production taxes (approximately $2 million after-tax) and higher exploration expense (approximately $12 million after-tax) due to a non-cash write-off of $10 million after-tax (approximately $0.14 per diluted share) of unproved leasehold costs associated with the deep Conasauga shale acreage. Energens natural gas utility, Alagasco, reported a net loss of $0.3 million in the second quarter of 2010 compared to net income of $0.9 million in the same period last year. This decrease largely reflects the timing of rate recovery under Alagascos rate-setting mechanisms, partially offset by the utilitys ability to earn on a higher level of equity.For the 2010 year-to-date, Energens net income totaled $172.3 million ($2.39 per diluted share) and compared favorably to net income of $150.6 million ($2.09 per diluted share) for the same period in the prior year. Energen Resources generated net income for the six months ended June 30, 2010, of $128.4 million as compared with $102 million in the previous period primarily as a result of higher commodity prices (approximately $47 million after-tax) and increased production volumes (approximately $7 million). Negatively affecting net income was the impact of higher DD&A expense (approximately $8 million after-tax), increased production taxes (approximately $3 million after-tax), increased administrative expense (approximately $4 million after-tax) and increased exploration expense (approximately $12 million after-tax) largely due to the $10 million after-tax Conasauga shale acreage write-off. Alagascos net income of $43.9 million in the current year-to-date compared to net income of $48.4 million in the same period in the previous year primarily due to the same reasons discussed above.
Revenues from oil and gas operations rose 18.2 percent to $234.6 million for the three months ended June 30, 2010 and 21.8 percent to $472.2 million in the year-to-date largely as a result of increased commodity prices along with the impact of higher oil and natural gas liquids production volumes. During the current quarter, revenue per unit of production for natural gas rose 9.1 percent to $6.84 per thousand cubic feet (Mcf), while oil revenue per unit of production increased 30.9 percent to $78.34 per barrel. Natural gas liquids revenue per unit of production fell 12.5 percent to an average price of $0.77 per gallon. In the year-to-date, revenue per unit of production for natural gas increased 9.5 percent to $7.02 per Mcf, oil revenue per unit of production rose 39.6 percent to $78.77 per barrel and natural gas liquids revenue per unit of production fell 3.5 percent to an average price of $0.82 per gallon.
Operations and maintenance (O&M) expense increased $21.4 million for the quarter and $24.6 in the year-to-date. Lease operating expense (excluding production taxes) increased $1.4 million for the quarter largely due to the June 2009 acquisition of Permian Basin oil properties (approximately $3 million) and increased electrical costs ($1 million) partially offset by lower workover expense ($1.8 million) and lower ad valorem taxes (approximately $0.7 million). In the year-to-date, lease operating expense (excluding production taxes) decreased $0.7 million primarily due to decreased workover expense ($2.7 million), lower nonoperated costs ($2.3 million), lower ad valorem taxes (approximately $1.3 million) and decreased repair and maintenance expense ($1 million) partially offset by the June 2009 acquisition of oil properties (approximately $5.6 million) and additional marketing and transportation costs ($1.4 million). Administrative expense increased $1.5 million for the three months ended June 30, 2010. For the six months ended June 30, 2010, administrative expense rose $5.6 million primarily due to higher labor and benefit costs primarily related to the Companys performance-based compensation plans (approximately $3.3 million) and increased legal expenses (approximately $1.3 million). Exploration expense rose $18.6 million in the second quarter of 2010 and $19.6 million year-to-date. In the second quarter of 2010, Energen Resources recorded a non-cash write-off of $16.1 million pre-tax of unproved leasehold associated with the deep Conasauga shale acreage.
Energen Resources DD&A expense for the quarter rose $6.8 million and increased $13.6 million year-to-date. The average depletion rate for the current quarter was $1.78 per thousand cubic feet equivalent (Mcfe) as compared to $1.57 per Mcfe in the same period a year ago. For the six months ended June 30, 2010, the average depletion rate was $1.77 per Mcfe as compared to $1.56 per Mcfe in the previous period. The increase in the current quarter and year-to-date per unit DD&A rate, which contributed approximately $7.5 million and $14.6 million, respectively, to the increase in DD&A expense, was largely due to higher development costs along with the reserve revisions associated with lower year-end reserve pricing. Partially offsetting the increases in DD&A, Energen Resources experienced higher production in low rate areas which was offset by lower production in high rate areas resulting in a net production volume impact of approximately $0.7 million and $1.3 million in the three months and six months ended June 30, 2010, respectively.
O&M expense rose 1 percent in the current quarter primarily due to higher distribution operation expenses ($0.7 million) and increased labor-related costs (approximately $0.6 million) partially offset by lower marketing expenses (approximately $1.2 million). In the six months ended June 30, 2010, O&M expense increased 1 percent primarily due to increased labor-related costs (approximately $2.4 million), increased consulting and technology costs (approximately $1.4 million) and increased distribution operation expenses (approximately $1.3 million). Partially offsetting these increases was a decrease to bad debt expense (approximately $4.2 million) which included the correction of a $3 million error identified by Alagasco, during the first quarter of 2010, in the calculation of the estimate of the allowance for doubtful accounts as of December 31, 2009. See Note 1, Basis of Presentation, in the Notes to Unaudited Condensed Financial Statements for further discussion.
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