Energen Corp. (EGN, Financial) filed Quarterly Report for the period ended 2009-06-30.
ENERGEN CORP is a diversified energy holding company engaged in naturalgas distribution and oil and natural gas exploration and productionactivities. The Corporation\'s utility subsidiary Alabama Gas Corporation is the largest natural gas distribution utility in the State of Alabama. The Corporation\'s oil and gas exploration and production activities are conducted by its subsidiary Taurus Exploration Inc. and its subsidiary. Energen Corp. has a market cap of $2.96 billion; its shares were traded at around $41.29 with a P/E ratio of 10.3 and P/S ratio of 1.9. The dividend yield of Energen Corp. stocks is 1.2%. Energen Corp. had an annual average earning growth of 33.6% over the past 10 years. GuruFocus rated Energen Corp. the business predictability rank of 4-star.
For the 2009 year-to-date, Energens net income totaled $150.6 million ($2.09 per diluted share) and compared to net income of $183.6 million ($2.55 per diluted share) for the same period in the prior year. Energen Resources generated net income for the six months ended June 30, 2009, of $102 million as compared with $143.1 million in the previous period primarily as a result of lower commodity prices (approximately $63 million after-tax), higher DD&A expense (approximately $15 million after-tax), a 2008 after-tax gain of $6.4 million on the sale of certain Permian Basin oil properties and increased lease operating expenses (approximately $3 million after-tax). Positively affecting net income was the impact of increased production volumes (approximately $26 million after-tax), decreased production taxes (approximately $14 million after-tax), lower exploration expense (approximately $2 million after-tax) and the $1.7 million after-tax insurance settlement discussed above. Alagascos net income of $48.4 million in the current year-to-date compared to net income of $40.6 million in the same period in the previous year primarily due to the same reasons discussed above.
Revenues from oil and gas operations declined 14.3 percent to $198.5 million for the three months ended June 30, 2009 and 15.1 percent to $387.7 million in the year-to-date largely as a result of decreased commodity prices partially offset by the impact of higher production volumes. During the current quarter, revenue per unit of production for natural gas fell 24 percent to $6.27 per thousand cubic feet (Mcf), while oil revenue per unit of production decreased 19.7 percent to $59.85 per barrel. Natural gas liquids revenue per unit of production decreased 20.7 percent to an average price of $0.88 per gallon. In the year-to-date, revenue per unit of production for natural gas declined 21 percent to $6.41 per Mcf, oil revenue per unit of production decreased 20.9 percent to $56.44 per barrel and natural gas liquids revenue per unit of production fell 21.3 percent to an average price of $0.85 per gallon.
O&M expense decreased $3.2 million for the quarter and $1.7 million in the year-to-date. Lease operating expense (excluding production taxes) increased by $1.8 million for the quarter largely due to increased ad valorem taxes (approximately $1.7 million) and higher labor costs (approximately $1 million) partially offset by lower electrical costs (approximately $1.3 million). In the year-to-date, lease operating expense (excluding production taxes) rose $4.5 million primarily due to increased ad valorem taxes (approximately $3.4 million), higher non-operated costs (approximately $2 million), and increased labor costs (approximately $1 million) partially offset by decreased electrical costs (approximately $1 million) and lower repairs and maintenance expense (approximately $0.8 million). Administrative expense decreased $2.2 million for the three months ended June 30, 2009 primarily due to lower benefit costs primarily related to the Companys performance-based compensation plans. For the six months ended June 30, 2009, administrative expense declined $3.1 million largely due to insurance recoveries associated with certain legal expenses along with lower benefit costs as described above. Exploration expense declined $2.9 million and $3.1 million in the second quarter of 2009 and in the year-to-date, respectively, primarily due to mechanical difficulties encountered in the prior year while drilling an exploratory well in the San Juan Basin.
Energen Resources DD&A expense for the quarter rose $11.8 million and increased $23.3 million year-to-date. The average depletion rate for the current quarter was $1.57 per thousand cubic feet equivalent (Mcfe) as compared to $1.25 per Mcfe in the same period a year ago. For the six months ended June 30, 2009, the average depletion rate was $1.56 per Mcfe as compared to $1.23 per Mcfe in the previous period. The increase in the current quarter and year-to-date per unit DD&A rate, which contributed approximately $7.7 million and $15.7 million, respectively, was largely due to higher rates resulting from an increase in development costs and the negative effect on reserves of lower year-end oil and gas prices. Increased production volumes also contributed approximately $4.1 million and $7.6 million to the increase in DD&A expense in the three months and six months ended June 30, 2009, respectively.
O&M expense declined 4.4 percent in the current quarter primarily due to decreased consulting and technology fees (approximately $0.9 million), lower distribution operation expenses (approximately $0.8 million) and decreased bad debt expense (approximately $0.7 million) partially offset by increased marketing expenses (approximately $0.7 million). In the six months ended June 30, 2009, O&M expense decreased 1.7 percent. Decreased consulting fees (approximately $1.4 million) and lower distribution operation expenses (approximately $1.3 million) were partially offset by increased insurance costs (approximately $1.8 million).
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ENERGEN CORP is a diversified energy holding company engaged in naturalgas distribution and oil and natural gas exploration and productionactivities. The Corporation\'s utility subsidiary Alabama Gas Corporation is the largest natural gas distribution utility in the State of Alabama. The Corporation\'s oil and gas exploration and production activities are conducted by its subsidiary Taurus Exploration Inc. and its subsidiary. Energen Corp. has a market cap of $2.96 billion; its shares were traded at around $41.29 with a P/E ratio of 10.3 and P/S ratio of 1.9. The dividend yield of Energen Corp. stocks is 1.2%. Energen Corp. had an annual average earning growth of 33.6% over the past 10 years. GuruFocus rated Energen Corp. the business predictability rank of 4-star.
Highlight of Business Operations:
Energens net income totaled $55 million ($0.76 per diluted share) for the three months ended June 30, 2009 compared with net income of $66.9 million ($0.93 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, 2009, of $54.9 million as compared with $70.6 million in the same quarter in the previous year. Significantly lower commodity prices (approximately $35 million after-tax) and increased depreciation, depletion and amortization (DD&A) expense (approximately $7 million after-tax) were partially offset by increased natural gas, oil and natural gas liquids production volumes (approximately $13 million after-tax), lower production taxes (approximately $9 million after-tax) and decreased exploration expense (approximately $2 million after-tax). Current-quarter results also include a $1.7 million after-tax insurance settlement associated with its business interruption claim following a natural gas processing plant fire in November 2007. Energens natural gas utility, Alagasco, reported net income of $0.9 million in the second quarter of 2009 compared to a net loss of $3.1 million in the same period last year largely reflecting the utilitys ability to earn on a higher level of equity, lower operations and maintenance (O&M) expense, increased revenue from cycle sales partially offset by decreased revenue from large commercial and industrial customers.For the 2009 year-to-date, Energens net income totaled $150.6 million ($2.09 per diluted share) and compared to net income of $183.6 million ($2.55 per diluted share) for the same period in the prior year. Energen Resources generated net income for the six months ended June 30, 2009, of $102 million as compared with $143.1 million in the previous period primarily as a result of lower commodity prices (approximately $63 million after-tax), higher DD&A expense (approximately $15 million after-tax), a 2008 after-tax gain of $6.4 million on the sale of certain Permian Basin oil properties and increased lease operating expenses (approximately $3 million after-tax). Positively affecting net income was the impact of increased production volumes (approximately $26 million after-tax), decreased production taxes (approximately $14 million after-tax), lower exploration expense (approximately $2 million after-tax) and the $1.7 million after-tax insurance settlement discussed above. Alagascos net income of $48.4 million in the current year-to-date compared to net income of $40.6 million in the same period in the previous year primarily due to the same reasons discussed above.
Revenues from oil and gas operations declined 14.3 percent to $198.5 million for the three months ended June 30, 2009 and 15.1 percent to $387.7 million in the year-to-date largely as a result of decreased commodity prices partially offset by the impact of higher production volumes. During the current quarter, revenue per unit of production for natural gas fell 24 percent to $6.27 per thousand cubic feet (Mcf), while oil revenue per unit of production decreased 19.7 percent to $59.85 per barrel. Natural gas liquids revenue per unit of production decreased 20.7 percent to an average price of $0.88 per gallon. In the year-to-date, revenue per unit of production for natural gas declined 21 percent to $6.41 per Mcf, oil revenue per unit of production decreased 20.9 percent to $56.44 per barrel and natural gas liquids revenue per unit of production fell 21.3 percent to an average price of $0.85 per gallon.
O&M expense decreased $3.2 million for the quarter and $1.7 million in the year-to-date. Lease operating expense (excluding production taxes) increased by $1.8 million for the quarter largely due to increased ad valorem taxes (approximately $1.7 million) and higher labor costs (approximately $1 million) partially offset by lower electrical costs (approximately $1.3 million). In the year-to-date, lease operating expense (excluding production taxes) rose $4.5 million primarily due to increased ad valorem taxes (approximately $3.4 million), higher non-operated costs (approximately $2 million), and increased labor costs (approximately $1 million) partially offset by decreased electrical costs (approximately $1 million) and lower repairs and maintenance expense (approximately $0.8 million). Administrative expense decreased $2.2 million for the three months ended June 30, 2009 primarily due to lower benefit costs primarily related to the Companys performance-based compensation plans. For the six months ended June 30, 2009, administrative expense declined $3.1 million largely due to insurance recoveries associated with certain legal expenses along with lower benefit costs as described above. Exploration expense declined $2.9 million and $3.1 million in the second quarter of 2009 and in the year-to-date, respectively, primarily due to mechanical difficulties encountered in the prior year while drilling an exploratory well in the San Juan Basin.
Energen Resources DD&A expense for the quarter rose $11.8 million and increased $23.3 million year-to-date. The average depletion rate for the current quarter was $1.57 per thousand cubic feet equivalent (Mcfe) as compared to $1.25 per Mcfe in the same period a year ago. For the six months ended June 30, 2009, the average depletion rate was $1.56 per Mcfe as compared to $1.23 per Mcfe in the previous period. The increase in the current quarter and year-to-date per unit DD&A rate, which contributed approximately $7.7 million and $15.7 million, respectively, was largely due to higher rates resulting from an increase in development costs and the negative effect on reserves of lower year-end oil and gas prices. Increased production volumes also contributed approximately $4.1 million and $7.6 million to the increase in DD&A expense in the three months and six months ended June 30, 2009, respectively.
O&M expense declined 4.4 percent in the current quarter primarily due to decreased consulting and technology fees (approximately $0.9 million), lower distribution operation expenses (approximately $0.8 million) and decreased bad debt expense (approximately $0.7 million) partially offset by increased marketing expenses (approximately $0.7 million). In the six months ended June 30, 2009, O&M expense decreased 1.7 percent. Decreased consulting fees (approximately $1.4 million) and lower distribution operation expenses (approximately $1.3 million) were partially offset by increased insurance costs (approximately $1.8 million).
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