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Discontinued Operations and Held for Sale Properties
 6 Months Ended
Jun. 30, 2015
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations and Held for Sale Properties
DISCONTINUED OPERATIONS AND HELD FOR SALE PROPERTIES

As discussed in Note 14, Acquisition and Disposition of Properties, the following table details held for sale properties by major classes of assets and liabilities:

(in thousands)
December 31, 2014
 
 
 
 
 
San Juan Basin*
Oil and natural gas properties
 
 
 
$
1,166,124

Less accumulated depreciation, depletion and amortization
 
 
 
(770,327
)
Total assets held for sale
 
 
 
395,797

Other long-term liabilities
 
 
 
(24,230
)
Total liabilities held for sale
 
 
 
(24,230
)
Total net assets held for sale
 
 
 
$
371,567

*The San Juan Basin natural gas assets that were held for sale as of December 31, 2014, did not qualify for discontinued operations as we have ongoing operations in the San Juan Basin.

On September 2, 2014, Energen completed the transaction to sell Alagasco to Laclede for $1.6 billion, less the assumption of $267 million in debt. The net pre-tax proceeds to Energen totaled approximately $1.32 billion, resulting in a pre-tax gain of $726.5 million. This sale had an effective date of August 31, 2014. Energen used cash proceeds from the sale to reduce long-term and short-term indebtedness. During the second quarter of 2014, Energen classified Alagasco as held for sale and reflected the associated operating results in discontinued operations. Energen’s results of operations and cash flows for the three months and six months ended June 30, 2014 presented in our unaudited consolidated financial statements and these notes reflect Alagasco as discontinued operations.

We classified as discontinued operations interest on debt required to be extinguished, certain depreciation costs that ended at close of transaction, the related income tax impact of these items and the earnings of Alagasco. In addition, we reclassified from discontinued operations certain general and administrative costs, other income and the related tax impact from these items. The table below provides a detail of these items included in income (loss) from discontinued operations as follows:

(in thousands)
Three months ended June 30, 2014
Six months ended June 30, 2014
Alagasco net income (loss)
$
(615
)
$
42,413

Depreciation, depletion and amortization
(153
)
(305
)
General and administrative
687

1,627

Interest expense
(7,190
)
(12,977
)
Other income
(228
)
(347
)
Income tax expense
2,603

4,538

Alagasco income (loss) from discontinued operations
(4,896
)
34,949

Energen income (loss) from discontinued operations
97

(1,029
)
Income (loss) from discontinued operations
$
(4,799
)
$
33,920




(in thousands, except per share data)
Three months
ended
June 30, 2014
Six months
ended
June 30, 2014
Natural gas distribution revenues
$
93,873

$
357,774

Oil and natural gas revenues
390

5,211

Total revenues
$
94,263

$
362,985

Pretax income (loss) from discontinued operations
$
(7,797
)
$
54,519

Income tax expense (benefit)
(2,998
)
20,599

Income (Loss) From Discontinued Operations
$
(4,799
)
$
33,920

Loss on disposal of discontinued operations
$
—

$
(1,667
)
Income tax benefit
—

(617
)
Loss on Disposal of Discontinued Operations
$
—

$
(1,050
)
Total Income (Loss) From Discontinued Operations
$
(4,799
)
$
32,870

Diluted Earnings Per Average Common Share
 
 
Income (loss) from discontinued operations
$
(0.07
)
$
0.46

Loss on disposal of discontinued operations
—

(0.01
)
Total Income (Loss) From Discontinued Operations
$
(0.07
)
$
0.45

Basic Earnings Per Average Common Share
 
 
Income (loss) from discontinued operations
$
(0.07
)
$
0.46

Loss on disposal of discontinued operations
—

(0.01
)
Total Income (Loss) From Discontinued Operations
$
(0.07
)
$
0.45



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. 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.