Energen Corp. said Friday that it has hedged an additional 3.6 Bcf of its oil and gas unit’s 2008 San Juan Basin natural gas production at an average Nymex-equivalent price of approximately $9.02/Mcf, bringing the company’s total natural gas hedge position for 2008 to 10.8 Bcf at an average Nymex-equivalent price of approximately $8.79/Mcf, which represents approximately 17% of its estimated 2008 gas production.
As previously announced, Energen also has hedged approximately 2.2 million bbl (approximately 53%) of its 2008 oil production at an average Nymex-equivalent price of approximately $66.62/bbl and some 4.5 million gallons (approximately 7%) of its 2008 gas liquids production at a price of approximately 87 cents/gallon.
Average natural gas and oil revenues per unit of production for Energen’s production associated with Nymex contracts will reflect the impact of basis differentials. Average NGL revenue per unit of production will be net of transportation and fractionation fees. For production associated with basin-specific contracts, Energen will receive the contracted hedge price and typically hedges basis differentials where applicable. The basin-specific contract prices have been converted for comparability purposes to a Nymex-equivalent price by adding to them Energen’s assumed basis differentials.
Birmingham, AL-based Energen focuses on the development and production of domestic, onshore natural gas, oil and natural gas liquid reserves and gas distribution in central and north Alabama. The company said it has approximately 1.7 Tcfe of proved reserves in the San Juan, Permian and Black Warrior basins and in the North Louisiana/East Texas area.
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