Energen to Purchase Additional Wolfberry Acreage in Permian Basin

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Energen Resources Corporation, the oil and gas exploration and production subsidiary of Energen Corporation (NYSE: EGN), has signed a Purchase and Sale Agreement with a private seller to acquire 10,360 net Wolfberry acres in the southeast portion of the trend for $75 million. This Permian Basin acquisition is largely oil and natural gas liquids (NGL) and offers a sizeable drilling inventory.

The property includes six producing wells and two wells awaiting completion. Energen Resources has identified 63 proved undeveloped (PUD) locations and 169 probable locations. Estimated proved reserves total 7.6 million barrels of oil equivalents (MMBOE), or 45.8 billion cubic feet equivalent (Bcfe). Estimated probable reserves total 18.4 MMBOE, or 110.1 Bcfe. Future development costs are estimated to be $430 million (including P&A), bringing Energen Resources’ all-in acquisition cost to $19.42 per BOE.

Oil represents 63 percent of the acquisition’s estimated proved and probable reserves; NGLs make up 24 percent; and natural gas comprises the remaining 13 percent.

The company plans to develop these properties over the next six years. Specific plans for this acreage in 2011 will be incorporated into the company’s 2011 capital and operating budgets that will be finalized in early December.

The acquisition is expected to close by the end of the year, with an effective date of December 1, 2010.

Energen Corporation is a diversified energy holding company with headquarters in Birmingham, AL. Its two lines of business are the acquisition, development and exploration of domestic, onshore natural gas, oil and NGL reserves and natural gas distribution in central and north Alabama. Energen Resources has approximately 3.5 trillion cubic feet equivalent of proved, probable, and possible reserves in the San Juan, Permian, and Black Warrior basins. Alabama Gas Corporation is the largest distributor of natural gas in Alabama. More information is available at http://www.energen.com.

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 more complete discussion of risks and uncertainties that could affect future results of Energen and its subsidiaries is included in the Company's periodic reports filed with the Securities and Exchange Commission.