Energen Corp. on Monday hedged an additional 5 Bcf of its 2006 natural gas production at $7.50/Mcf and 360,000 bbl of its sour oil output at $55.21/bbl, and with the additional uncertainty of price volatility removed, raised its 2006 earnings guidance to a range of $2.55-2.75/diluted share

The company’s previous guidance for 2006, adjusted for a 2-for-1 stock split on June 1, was $2.50-2.60/share.

“Our 2006 price assumptions leave a lot of potential for commodity price-driven earnings upside given that current 2006 strip prices are approximately $56/bbl for oil and $7.50/Mcf for natural gas,” said CEO Mike Warren.

The Birmingham, AL-based company’s oil and gas acquisition and development subsidiary, Energen Resources Corp., uses derivative hedge instruments to mitigate the impact of volatile commodity prices.

Energen Resources’ total natural gas hedge position for 2006 now stands at approximately 22.7 Bcf at an average New York Mercantile Exchange-equivalent price of $6.99/Mcf; the company’s total oil hedge position is now approximately 1.8 million bbl at $47.85/bbl.

Embedded in Energen’s 2006 earnings guidance is the assumption that prices applicable to its unhedged natural gas and oil production will average $6.15/Mcf and $35/bbl, respectively. The assumed average price for unhedged natural gas liquids (NGL) production in 2006 is 58 cents/gallon.

Also included in the company’s 2006 guidance is an estimated 8 cents/diluted share from unidentified oil and gas property acquisitions of $200 million each in 4Q2005 and 4Q2006.

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