Energen Corp.'s Permian Basin returns look strong enough -- despite commodity prices -- to boost drilling later this year and begin a "multi-year acceleration" in 2016, the company said Wednesday.

The Birmingham, AL-based independent has launched plans to raise $405 million through a public offering of 5.7 million shares. The proceeds would be dedicated to more drilling in West Texas.

"Energen intends to use the net proceeds from the offering to fund a slight increase in drilling activity in the Midland Basin in the second half of 2015 and, more significantly, to begin a multi-year acceleration of development activities in the Permian Basin in 2016, with capital investment in 2016 of $1.0 billion or more," management said.

Net proceeds also may be used to acquire "proved and unproved leasehold," the company noted. In addition, some of the proceeds could be used to pay down debt.

Energen is one of the dozens of North American producers that have worked to raise funds from equity markets, private and public. Energen's allows its investors, instead of outside firms, to help pump up drilling activity in a down market.

Energen's decision to increase Permian development this year follows similar news by Denver-based Cimarex Energy Co., which last month said it planned to use the proceeds from its $654 million public stock sale to increase drilling in the second half of 2015 and "more significantly" in 2016. Like Energen, Cimarex is primarily focused on the Permian; it also has operations in the Midcontinent.

Energen had 373 million boe of proved reserves at the end of 2014, nearly all in the Permian and San Juan basins. Earlier this month the company said the 54-day performances of its first two Permian wells in the Lower Spraberry in Martin County, TX, were strong performers. The Campbell No. 501H was tracking above a 900,000 boe/d estimated ultimate recovery (EUR) type curve, while the Wilbanks SN 16-15 No. 501H had a 1.2 million boe EUR type curve.

Energen also has begun hedging 2016 oil production and has added to this year's oil hedges. Two swap contracts were put in place for about 1.1 million bbl of 2016 production at an average New York Mercantile Exchange price of  $63.80/bbl. The company also hedged an additional 2.9 million bbl of production for July through December at an average price of $62.46. Adjusted for the new 2015 swaps, the hedge position for April through December now covers about 82% of estimated 2015 production at an average price of $80.76/bbl.