Stock Compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Compensation

STOCK COMPENSATION

Stock Incentive Plan

Stock Options: The Stock Incentive Plan provides for the grant of incentive stock options and non-qualified stock options to officers and key employees. Options granted under the Stock Incentive Plan provide for the purchase of Energen common stock at not less than the fair market value on the date the option was granted. The sale or transfer of the shares is limited during certain periods. All outstanding options vest within three years from date of grant and expire 10 years from the grant date.

Restricted Stock: Additionally, the Stock Incentive Plan provides for the grant of restricted stock and restricted stock units. In February 2015, Energen awarded 99,814 restricted stock units with a grant-date fair value of $65.15. These awards have a three year vesting period and were valued based on the quoted market price of Energen’s common stock at the date of grant.

Performance Share Awards: The Stock Incentive Plan also provides for the grant of performance share awards to eligible employees based on predetermined Company performance criteria at the end of an award period. The Stock Incentive Plan provides that payment of earned performance share awards be made in the form of Energen common stock. Performance share awards are valued using the Monte Carlo model which uses historical volatility and other variables to estimate the probability of satisfying the market condition of the award. Energen granted 120,372 performance share awards during the first quarter of 2015 with a three year vesting period and a grant-date fair value of $83.94.

Stock Appreciation Rights Plan

The Stock Appreciation Rights Plan provides for the payment of cash incentives measured by the long-term appreciation of Energen common stock. These awards are liability awards which settle in cash and are remeasured each reporting period until settlement and have a three year vesting period.

Petrotech Incentive Plan

The Petrotech Incentive Plan provides for the grant of stock equivalent units. These awards are liability awards which settle in cash and are remeasured each reporting period until settlement. During the first quarter of 2015, Energen awarded 59,288 Petrotech units with a fair value of $49.68 as of September 30, 2015, none of which included a market condition. Energen awarded 64,305 Petrotech units which included a market condition and had a fair value of $81.96 as of September 30, 2015. These awards have a three year vesting period. Also awarded were 1,472 Petrotech units with a sixteen month vesting period and a fair value of $49.82 as of September 30, 2015, and 265 Petrotech units with a twenty-four month vesting period and a fair value of $49.76 as of September 30, 2015, none of which included a market condition. During the third quarter of 2015, Energen awarded 4,926 Petrotech units with a fair value of $49.68 as of September 30, 2015, 176 Petrotech units with a sixteen month vesting period and a fair value of $49.82 as of September 30, 2015, and 32 Petrotech units with a twenty-four month vesting period and a fair value of $49.76 as of September 30, 2015, none of which included a market condition.

Stock Repurchase Program

During the three months and nine months ended September 30, 2015, Energen had non-cash purchases of approximately $23,000 and $4.4 million, respectively, of Energen common stock in conjunction with tax withholdings on our non-qualified deferred compensation plan and other stock compensation. Energen had non-cash purchases of Energen common stock of $0.6 million and $2.0 million during the three months and nine months ended September 30, 2014, respectively. Energen utilized internally generated cash flows in payment of the related tax withholdings.