ASSET IMPAIRMENT

Impairments recognized by Energen are presented below:



	Three months ended June 30,				Six months ended June 30,
(in thousands)	2015		2014		2015		2014
Continuing operations:
Permian Basin oil properties	$	51,474	$	—	$	55,804	$	—
Permian Basin unproved leasehold properties	8,939		1,339		10,944		2,587
San Juan Basin unproved leasehold properties	—		3		248		1
Total asset impairments from continuing operations	60,413		1,342		66,996		2,588
Discontinued operations:
North Louisiana/East Texas oil and natural gas properties	—		—		—		1,667
Total asset impairments from discontinued operations	—		—		—		1,667
Total asset impairments	$	60,413	$	1,342	$	66,996	$	4,255

During the three months and six months ended June 30, 2015, Energen recognized non-cash impairment writedowns on certain properties primarily in the Central Basin Platform of the Permian Basin of $51.5 million pre-tax and $55.8 million pre-tax, respectively, to adjust the carrying amount of these properties to their fair value based on expected future discounted cash flows. During the quarter, Energen received an unsolicited offer for certain properties which resulted in an evaluation and subsequent revision of estimated future cash flows. The non-cash impairment writedowns are reflected in asset impairment on the consolidated income statement.

Energen recognized unproved leasehold writedowns primarily on Permian properties in the Delaware Basin of $8.9 million pre-tax during the second quarter of 2015 and $11.2 million in the year-to-date. These non-cash writedowns are reflected in asset impairment on the consolidated income statement.

In March 2014, Energen completed the sale of its North Louisiana/East Texas natural gas and oil properties for $30.3 million. The sale had an effective date of December 1, 2013, and the proceeds from the sale were used to repay short-term obligations. During the third quarter of 2013, Energen classified these primarily natural gas properties as held for sale and reflected the associated operating results in discontinued operations. Energen recognized a non-cash impairment writedown on these properties in the first quarter of 2014 of $1.7 million pre-tax to adjust the carrying amount of these properties to their fair value based on an estimate of the selling price of the properties. This non-cash impairment writedown is reflected in loss on disposal of discontinued operations in the three months ended March 31, 2014. Significant assumptions in valuing the proved reserves included the reserve quantities, anticipated operating costs, anticipated production taxes, future expected natural gas prices and basis differentials, anticipated production declines, and a discount rate of 10 percent commensurate with the risk of the underlying cash flow estimates. The impairment writedowns are classified as Level 3 fair value. At December 31, 2013, proved reserves associated with Energen’s North Louisiana/East Texas properties totaled 23 Bcf of natural gas and 91 MBbl of oil.