8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report

November 8, 2017

Energen Corporation

Registrant

1-7810	Alabama	63-0757759
Commission File Number	State of Incorporation	IRS Employer Identification Number

605 Richard Arrington Jr. Boulevard North Birmingham, Alabama	35203
(Address of principal executive offices)	(Zip Code)

(205) 326-2700

(Registrant’s telephone number including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

ITEM 2.02 Results of Operations and Financial Condition.

On November 8, 2017, Energen Corporation issued a press release announcing the third quarter financial results. The press release and supplemental financial information are attached hereto as Exhibit 99.1 and 99.2.

The information furnished pursuant to Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Energen Corporation under the Securities Act of 1933 or the Exchange Act.

ITEM 7.01 Regulation FD Disclosure.

Energen Corporation has included reconciliations of certain Non-GAAP financial measures to the related GAAP financial measures. The reconciliations are attached hereto as exhibit 99.3.

The information furnished pursuant to Item 7.01, including Exhibit 99.3, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Energen Corporation under the Securities Act of 1933 or the Exchange Act.

ITEM 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are furnished as part of this Current Report on Form 8-K.

Exhibit Number
99.1	Press Release dated November 8, 2017
99.2	Supplemental Financial Information
99.3	Non-GAAP Financial Measures Reconciliation

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EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION
99.1	* Press Release dated November 8, 2017
99.2	* Supplemental Financial Information
99.3	* Non-GAAP Financial Measures Reconciliation

* This exhibit is furnished to, but not filed with, the Commission by inclusion herein.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ENERGEN CORPORATION
November 8, 2017	By	/s/ Charles W. Porter, Jr.
	Charles W. Porter, Jr. Vice President, Chief Financial Officer and Treasurer of Energen Corporation

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EX-99.1

Exhibit 99.1

For Release: 6:00 a.m. ET	Contact:	Julie S. Ryland
Wednesday, November 8, 2017		205.326.8421

ENERGEN’S GEN 3 WELLS CONTINUE TO DELIVER OUTSTANDING RESULTS

3Q17 Production Beats Guidance by 9%; All Commodities Exceed Expectations

4Q17 Production Guidance Raised 5%

Per-Unit LOE and SG&A Decrease Substantially Again in 3Q17

****NOTE: 3Q17 conference call slides available at www.energen.com****

BIRMINGHAM, Alabama – Energen Corporation (NYSE: EGN) (“Energen” or the “company”) today announced financial and operating results for the third quarter ended September 30, 2017.

FINANCIAL AND OPERATING HIGHLIGHTS

PRODUCTION

• 3Q17 production of 81.3 mboepd exceeded guidance by 9% and surpassed 2Q17 production by 12%.

• 3Q17 oil production grew 9% from 2Q17.

• Revised CY17 production of 73.2 mboepd is on track to exceed CY16 volumes by 34% (prior estimate was 29%).

• YOY production growth in Midland and Delaware basins is now estimated to be 43% as company focuses on development of multiple horizontal shale plays.

• 4Q17 production estimate raised for all commodities; YOY growth in the 4Q exit rate is now estimated to be 60%.

EARNINGS AND EXPENSES

• 3Q17 adjusted EBITDAX of $174 mm grew 22% from 2Q17 and beat internal expectations by 14%.

• Per-unit LOE (including marketing and transportation) beat the guidance midpoint by 17%.

• Per unit SG&A beat the guidance midpoint by 12%.

CAPITAL EXPENDITURES

• 2017 drilling and development capital range is unchanged at $850 - $900 mm.

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• Energen closed on an additional 1,300 net acres of unproved leasehold in 3Q17, bringing its YTD acquisition of unproved bolt-on acreage to 11,000 net acres for »$235 mm, or »$21,400/acre.

3Q17 WELL RESULTS

• 26 gross (25 net) wells in the Midland and Delaware basins were turned to production in 3Q17; 77% are multi-zone pattern wells completed in batches.

• The cumulative production of 80 Gen 3 wells are performing at or above the highest EUR type curve and significantly outperforming the midpoint EUR type curve; 78% are multi-zone pattern wells completed in batches.

• Public data continues to show that Energen’s Gen 3 wells in the Midland and Delaware basins are outperforming other operators’ wells.

Comments from the CEO

“Energen’s execution and operational success continued in the third quarter of 2017,” said Energen Chief Executive Officer James McManus. “Once again, we delivered on our drilling and development plans; we exceeded our expectations for oil and total production; and we further reduced our LOE and G&A.

“Our Gen 3 wells continue to perform at or above our highest EUR type curves and at or above wells completed by other operators. Importantly, we expect our Gen 3 multi-zone pattern wells to continue driving production growth as we move forward. We have increased our guidance for 4^th quarter production in all commodities, with estimated total production up 5 percent; and we now expect year-over-year production growth in 2017 to be 34 percent.

“During the 3^rd quarter, we continued to execute on our bolt-on acquisition program, which we believe has created significant value for Energen. Over the last 21 months, we have added approximately 20,300 net acres in prime Delaware and Midland basin locations for an average price of about $17,500 an acre,” McManus said.

“We are extremely pleased with our performance this quarter and very excited about our future prospects as we successfully implement our 2017 drilling and development program and plan for 2018. We are confident that Energen is well-positioned to continue delivering strong results and creating shareholder value now and in the future.”

Operations Update

In the third quarter of 2017, Energen turned to production 17 gross (16 net) wells in the Midland Basin and 9 gross (9 net) wells in the Delaware Basin; 77 percent are multi-zone pattern wells completed in batches. The company is currently operating six horizontal drilling rigs and two frac crews.

2017 First Production/Flow back (Operated Horizontal Wells – Gross/Net)

	1Q17a		2Q17a		3Q17a		4Q17e		CY17e
Midland Basin		10/9		27/27		17/16		20/16		74/68
Delaware Basin		2/2		18/18		9/9		5/5		34/34

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3Q17 Wells Turned to Production

Average Completed

Avg. Peak 24- Hour IP

Avg. Peak 30-day IP

Area

# of Wells

Lateral Length

Boepd

%Oil

Boepd

%Oil

Delaware Basin†

7

Wolfcamp A (6) Wolfcamp B (1)

8,851’

2,806

55

2,204

51

Northern Midland Basin††

7

Wolfcamp A (3) Wolfcamp B (4)

9,189’

1,466

81

1,070

83

^† Excludes 2 Wolfcamp BC wells

^†† Excludes 10 Northern Midland Basin Spraberry interval wells due to timing of first production or disposal-related choke management

For 80 Gen 3 wells drilled to date (78 percent of which were multi-zone pattern wells completed in batches), the average cumulative production uplift of wells in each formation group (normalized to 10,000’) is performing at or above the highest EUR type curve – and significantly outperforming the midpoint EUR type curve – identified for wells in that group completed with pre-Gen 3 frac designs. These are key measures of success for Energen’s latest frac design.

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Relative to the midpoint EUR type curve, the average cumulative production uplift of the Gen 3 wells normalized to 10,000’ is:

• ≈21% over a 1.75 MMBOE type curve at 340 days for 27 Delaware Basin Wolfcamp A and B wells – 56% are multi-zone pattern wells completed in batches

• ≈40% over a 1.2 MMBOE type curve at 175 days for 18 wells in the Spraberry package – 89% are multi-zone pattern wells completed in batches

• ≈6% over a 1.2 MMBOE type curve at 250 days for 17 northern Midland Basin Wolfcamp A and B wells – 76% are multi-zone pattern wells completed in batches

• ≈11% over a 1.2 MMBOE type curve at 250 days for 16 central Midland Basin Wolfcamp A and B wells – 100% are multi-zone pattern wells in batches

• ≈45% over an 850 MBOE type curve at 240 days for 2 central Midland Basin Lower Spraberry wells – 100% are multi-zone pattern wells completed in batches

In another assessment of success, the average cumulative production of Energen’s Midland Basin Gen 3 multi-zone pattern wells completed in batches continues to outperform other operators’ pattern wells, and the average cumulative production of Energen’s Gen 3 wells (pattern and stand-alone) in the Midland and Delaware basins is outperforming other operators’ wells with proppant loads of 1,700-2,500 pounds per foot; Energen’s average proppant loading is near the low end of this range at approximately 1,800 pounds in the Midland Basin and 1,900 pounds in the Delaware Basin.

The company attributes this outperformance to completing the wells in multi-zone batches instead of completing them as offset pattern wells. Utilizing simultaneous, multi-zone pattern development allows all wells to be completed at the original reservoir pressure, which should maximize reservoir productivity. In offset pattern well development, the original stand-alone well causes the reservoir pressure to drop and reduces the productivity of all subsequent wells drilled.

Bolt-on Lease Acquisitions Continue

During 3Q17, Energen closed on an additional 1,300 net acres of unproved leasehold in the Permian Basin for approximately $20 million. Year to date, Energen has acquired more than 11,000 net acres for approximately $235 million, or an average price of some $21,400 per acre. The company also has purchased 690 net mineral acres primarily in the Delaware Basin in the first nine months of 2017 for approximately $20 million.

Over the last 21 months (CY16 and YTD17), Energen’s bolt-on acquisition program has added approximately 20,300 net lease acres in prime Delaware and Midland basin locations for some $355 million, or an average price of less than $17,500 per acre.

2017 Capital Overview

Energen’s estimate of capital spending for drilling and development in 2017 remains unchanged at $850-$900 million.

Capital Summary by Basin	2017e Capital ($MM)
Midland Basin	$	470 - 490
Delaware Basin	$	375 - 405
Central Basin, ARO, Other	$	5
Drilling & Development Capital	$	850 - 900
Acquisitions/Unproved Leasehold	$	265
Total Capital Expenditures	$	1,115 - 1,165

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Liquidity and Leverage Update

The fall redetermination cycle is under way. While Energen estimates that its borrowing base will increase from $1.4 billion to $1.7 billion, the company expects its aggregate commitment under the credit facility will remain unchanged at $1.05 billion. At September 30, 2017, Energen had cash of $0.3 million, long-term debt of $527.8 million, and $238.0 million drawn on its $1.05 billion line of credit. The company estimates that net debt-to-adjusted EBITDAX at year-end 2017 will range from 1.2x-1.3x.

3Q17 Financial Results

For the 3 months ended September 30, 2017, Energen reported a GAAP net loss from all operations of $(18.5 million), or $(0.19) per diluted share. Adjusting for a non-cash loss on mark-to-market derivatives of $(40.2 million) and other miscellaneous items totaling $2.5 million, Energen had adjusted net income in 3Q17 of $19.2 million, or $0.20 per diluted share. This compares with an adjusted loss in 3Q16 of $(21.4 million), or $(0.22) per diluted share. [See “Non-GAAP Financial Measures” beginning on pp 8 for more information and reconciliation.]

Energen’s adjusted 3Q17 net income of $19.2 million exceeded internal expectations by $6.6 million largely due to better-than-expected performance of wells completed with Gen 3 fracs, less-than-expected lease operating expense (LOE) and net salaries and general and administrative expense (SG&A), and higher realized oil prices. Partially offsetting these gains was increased depreciation, depletion, and amortization expense (DD&A) largely due to increased production.

Energen’s adjusted EBITDAX totaled $174.0 million in the 3rd quarter of 2017, increased 22 percent from the second quarter, and exceeded internal expectations by 14 percent. In the same period a year ago, Energen’s adjusted EBITDAX totaled $84.8 million. [See “Non-GAAP Financial Measures” beginning on pp 8 for more information and reconciliation.]

3Q17 Production (mboepd)

	3Q17
Commodity	Actual		Guidance		% D
Oil		49.0		47.9		2
NGL		15.7		12.9		22
Natural Gas		16.6		13.9		19
Total		81.3		74.8		9

	3Q17
Area	Actual		Guidance		% D
Midland Basin		44.8		40.6		10
Delaware Basin		28.7		26.2		10
Central Basin/Other		7.9		8.0		(1	)
Total		81.3		74.8		9

Note: Totals in production tables above may not sum due to rounding.

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3Q17 Expenses

Per BOE, except where noted	3Q17
	Actual			Midpoint			% D
LOE (production costs, marketing & transportation)	$	5.95		$	7.15			(17	)
Production & ad valorem taxes (% of revenues exc. hedges)		6.2	%		6.4	%		(3	)
DD&A	$	17.46		$	17.25			1
SG&A	$	2.87		$	3.25			(12	)
Exploration (includes seismic, delay rentals, etc.)	$	0.08		$	0.13			(38	)
Interest ($mm)	$	9.9		$	10.0			(1	)

3Q17 Average Realized Prices

Commodity	With Hedges		W/O Hedges
Oil (per barrel)	$	46.27	$	45.07
NGL (per gallon)	$	0.39	$	0.42
Natural Gas (per mcf)	$	2.35	$	2.22

CY17 Guidance

Energen today raised its production guidance for 2017 by 4 percent to 73.2 mboepd to reflect the company’s strong 3Q17 performance as well as a 5 percent increase in its estimated 4Q17 production. Energen now expects 4Q17 volumes to reach 85.7 mboepd for an increase of 60 percent from the same period a year ago. On the strength of its Generation 3 frac design, Energen sees YOY production growth in 2017 of 34 percent, up from the prior estimate of 29 percent.

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Production (mboepd)

By Basin	1Q17a		2Q17a		3Q17a		4Q17e		CY17e
Midland Basin		31.8		41.3		44.8		45.4		40.8
Delaware Basin		12.8		23.4		28.7		32.4		24.4
Central Basin Platform/Other		8.3		7.9		7.9		7.8		8.0
Total		52.8		72.5		81.3		85.7		73.2

By Commodity	1Q17a		2Q17a		3Q17a		4Q17e		CY17e
Oil		33.3		45.1		49.0		54.0		45.4
NGL		8.9		13.5		15.7		14.9		13.3
Gas		10.6		13.9		16.6		16.8		14.5
Total		52.8		72.5		81.3		85.7		73.2

Note: Totals in production tables above may not sum due to rounding.

Operating Expenses

Per BOE, except where noted	1Q17a			2Q17a			3Q17a			4Q17e	CY17e
LOE*	$	8.68		$	6.66		$	5.95		$6.55 - $6.85	$6.70 - $7.00
Production & ad valorem taxes**		7.3	%		6.0	%		6.2	%	6.2%	6.4%
DD&A expense†	$	20.71		$	18.25		$	17.46		$16.05 - $16.55	$17.70 - $18.10
SG&A	$	4.29		$	3.00		$	2.87		$2.70 - $3.00	$3.00 - $3.30
Exploration††	$	0.76		$	0.30		$	0.08		$0.15 - $0.25	$0.25 - $0.35
Interest ($mm)	$	9.0		$	9.1		$	9.9		$9.5 - $10.5	$38.0 - $39.0
Effective tax rate		32	%		35	%		36	%	36% - 38%	37% - 39%

* Production costs, marketing & transportation

** % of revenues, excluding hedges

† 4Q17 and CY17 does not include estimate of 4Q17 DD&A look-back adjustment

†† Includes seismic, delay rentals, etc.

LOE per boe in CY17 is estimated to range from $4.95-$5.25 in the Delaware Basin, $5.50-$5.80 in the Midland Basin, and $18.20-$18.50 in the Central Basin Platform. Production and ad valorem taxes in CY17, as a percent of revenues excluding hedges, are estimated to be 6.2 percent in the Delaware Basin, 6.2 percent in the Midland Basin, and 7.3 percent in the Central Basin Platform. SG&A per boe in CY17 is estimated to be comprised of cash and other of $2.55-$2.65 per boe and non-cash, equity-based compensation of $0.45-$0.65 per boe.

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Hedges

Energen recently added some 1.1 mmbo of 2018 WTI Midland to WTI Cushing (sweet oil) differential hedges at an average price of $(0.60) per barrel. The company also has initiated hedging for its estimated 2019 oil production and Midland to Cushing sweet oil differential.

For the last three months of 2017, 64 percent of the company’s estimated oil production of 5.0 mmbo is hedged. Swaps for 2.0 mmbo have an average NYMEX price of $50.68 per barrel, and 3-way collars for 1.2 mmbo have average call, put, and short put prices of $62.18, $45.00, and $35.00 per barrel, respectively. Approximately 36 percent of Energen’s estimated NGL production is hedged at an average price of $0.57 per gallon, and 47 percent of its estimated gas production is hedged at an average NYMEX-equivalent price of $3.36 per Mcf. Energen also has hedged the WTI Midland to WTI Cushing (sweet oil) differential for 3.0 million barrels at an average price of $(0.68) per barrel; approximately 88 percent of Energen’s oil production for the remainder of the year is estimated to be sweet.

Basis Differentials

Energen’s average realized prices in the last three months of CY17 will reflect commodity and basis hedges, oil transportation charges of approximately $1.97 per barrel, NGL T&F fees of approximately $0.13 per gallon, and basis differentials applicable to unhedged production. Natural gas and NGL production also is subject to a percent of proceeds contract of approximately 85%.

The assumed gas basis for all open contracts for November-December 2017 is $(0.45) per Mcf, and assumed prices for unhedged Midland to Cushing basis differentials for sweet and sour oil (November-December) are $(1.00) and $(1.30), respectively. Energen’s assumed commodity prices for unhedged production are approximately $51.46 per barrel of oil (October-December), $0.76 per gallon of NGL (October-December), and $2.93 per Mcf of gas (November-December).

Estimated Price Realizations (pre-hedge):

	4Q17
Crude oil (% of NYMEX/WTI)	94
NGL (after T&F) (% of NYMEX/WTI)	44
Natural gas (% of NYMEX/Henry Hub)	72

2018 Hedges

Oil	2018 Hedge Volumes		Avg. NYMEX Price
Three-way Collars		13.5 mmbo
Call Price			$	60.04 per barrel
Put Price			$	45.47 per barrel
Short Put Price			$	35.47 per barrel

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Commodity	Hedge Volumes	NYMEXe Price
NGL	105.8 mm gallons	$0.59 per gallon
Natural Gas	3.6 bcf	$3.19 per mcf

Energen also has hedged the Midland to Cushing differential on 10.8 million barrels of its estimated 2018 sweet oil production at an average price of $(1.01).

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2019 Hedges

Oil	2019 Hedge Volumes		Avg. NYMEX Price
Three-way Collars		1.4 mmbo
Call Price			$	58.61 per barrel
Put Price			$	45.00 per barrel
Short Put Price			$	35.00 per barrel

Energen also has hedged the Midland to Cushing differential on 1.4 million barrels of its estimated 2019 sweet oil production at an average price of $(0.53).

Conference Call

3Q17 slides associated with Energen’s quarterly release and conference call are available at www.energen.com. Energen will hold its quarterly conference call Wednesday, November 8, at 8:30 a.m. EDT. Investment community members may participate by calling 1-877-407-8289 (reference Energen earnings call). A live audio Webcast of the program as well as a replay may be accessed via www.energen.com.

Energen Corporation is an oil-focused exploration and production company with operations in the Permian Basin in west Texas and New Mexico. For more information, go to www.energen.com.

FORWARD LOOKING STATEMENTS: All statements, other than statements of historical fact, appearing in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements about our expectations, beliefs, intentions or business strategies for the future, statements concerning our outlook with regard to the timing and amount of future production of oil, natural gas liquids and natural gas, price realizations, the nature and timing of capital expenditures for exploration and development, plans for funding operations and drilling program capital expenditures, the timing and success of specific projects, operating costs and other expenses, proved oil and natural gas reserves, liquidity and capital resources, outcomes and effects of litigation, claims and disputes and derivative activities. Forward-looking statements may include words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “foresee”, “intend”, “may”, “plan”, “potential”, “predict”, “project”, “seek”, “will” or other words or expressions concerning matters that are not historical facts. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this news release. Except as otherwise disclosed, the forward-looking statements do not reflect the impact of possible or pending acquisitions, investments, divestitures or restructurings. The absence of errors in input data, calculations and formulas used in estimates, assumptions and forecasts cannot be guaranteed. We base our forward-looking statements on information currently available to us, and we undertake no obligation to correct or update these statements whether as a result of new information, future events or otherwise. Additional information regarding our forward-looking statements and related risks and uncertainties that could affect future results of Energen, can be found in the Company’s periodic reports filed with the Securities and Exchange Commission and available on the Company’s website - www.energen.com.

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CAUTIONARY STATEMENTS: The SEC permits oil and gas companies to disclose in SEC filings only proved, probable and possible reserves that meet the SEC’s definitions for such terms, and price and cost sensitivities for such reserves, and prohibits disclosure of resources that do not constitute such reserves. Outside of SEC filings, we use the terms “estimated ultimate recovery” or “EUR,” reserve or resource “potential,” “contingent resources” and other descriptions of volumes of non-proved reserves or resources potentially recoverable through additional drilling or recovery techniques. These estimates are inherently more speculative than estimates of proved reserves and are subject to substantially greater risk of actually being realized. We have not risked EUR estimates, potential drilling locations, and resource potential estimates. Actual locations drilled and quantities that may be ultimately recovered may differ substantially from estimates. We make no commitment to drill all of the drilling locations that have been attributed these quantities. Factors affecting ultimate recovery include the scope of our on-going drilling program, which will be directly affected by the availability of capital, drilling, and production costs, availability of drilling and completion services and equipment, drilling results, lease expirations, regulatory approvals, and geological and mechanical factors. Estimates of unproved reserves, type/decline curves, per-well EURs, and resource potential may change significantly as development of our oil and gas assets provides additional data. Additionally, initial production rates contained in this news release are subject to decline over time and should not be regarded as reflective of sustained production levels.

Financial, operating, and support data pertaining to all reporting periods included in this release are

unaudited and subject to revision.

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EX-99.2

Exhibit 99.2

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

For the 3 months ending September 30, 2017 and 2016

	3rd Quarter
(in thousands, except per share data)	2017			2016			Change
Revenues
Oil, natural gas liquids and natural gas sales	$	249,114		$	163,973		$	85,141
Gain (loss) on derivative instruments, net		(57,610	)		20,412			(78,022	)
Total revenues		191,504			184,385			7,119
Operating Costs and Expenses
Oil, natural gas liquids and natural gas production		44,549			42,280			2,269
Production and ad valorem taxes		15,326			10,987			4,339
Depreciation, depletion and amortization		131,756			108,167			23,589
Asset impairment		100			587			(487	)
Exploration		625			18			607
General and administrative (including stock based compensation of $4,713 and $6,518 for the three months ended September 30, 2017, and 2016, respectively)		21,474			21,710			(236	)
Accretion of discount on asset retirement obligations		1,473			1,556			(83	)
Gain on sale of assets and other		(5,977	)		(91,222	)		85,245
Total operating costs and expenses		209,326			94,083			115,243
Operating Income (Loss)		(17,822	)		90,302			(108,124	)
Other Income (Expense)
Interest expense		(9,928	)		(8,987	)		(941	)
Other income		58			421			(363	)
Total other expense		(9,870	)		(8,566	)		(1,304	)
Income (Loss) Before Income Taxes		(27,692	)		81,736			(109,428	)
Income tax expense (benefit)		(9,206	)		28,422			(37,628	)
Net Income (Loss)	$	(18,486	)	$	53,314		$	(71,800	)
Diluted Earnings Per Average Common Share	$	(0.19	)	$	0.55		$	(0.74	)
Basic Earnings Per Average Common Share	$	(0.19	)	$	0.55		$	(0.74	)
Diluted Average Common Shares Outstanding		97,198			97,511			(313	)
Basic Average Common Shares Outstanding		97,198			97,068			130

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

For the 9 months ending September 30, 2017 and 2016

	Year-to-date
(in thousands, except per share data)	2017			2016			Change
Revenues
Oil, natural gas liquids and natural gas sales	$	644,212		$	458,374		$	185,838
Gain (loss) on derivative instruments, net		45,037			(40,005	)		85,042
Total revenues		689,249			418,369			270,880
Operating Costs and Expenses
Oil, natural gas liquids and natural gas production		129,746			132,847			(3,101	)
Production and ad valorem taxes		41,364			33,422			7,942
Depreciation, depletion and amortization		352,957			344,564			8,393
Asset impairment		1,589			220,612			(219,023	)
Exploration		6,259			1,780			4,479
General and administrative (including stock based compensation of $11,101 and $14,493 for the nine months ended September 30, 2017, and 2016, respectively)		61,665			74,783			(13,118	)
Accretion of discount on asset retirement obligations		4,330			5,092			(762	)
Gain on sale of assets and other		(6,980	)		(252,097	)		245,117
Total operating costs and expenses		590,930			561,003			29,927
Operating Income (Loss)		98,319			(142,634	)		240,953
Other Income (Expense)
Interest expense		(28,039	)		(27,858	)		(181	)
Other income		486			580			(94	)
Total other expense		(27,553	)		(27,278	)		(275	)
Income (Loss) Before Income Taxes		70,766			(169,912	)		240,678
Income tax expense (benefit)		26,368			(56,869	)		83,237
Net Income (Loss)	$	44,398		$	(113,043	)	$	157,441
Diluted Earnings Per Average Common Share	$	0.45		$	(1.21	)	$	1.66
Basic Earnings Per Average Common Share	$	0.46		$	(1.21	)	$	1.67
Diluted Average Common Shares Outstanding		97,678			93,602			4,076
Basic Average Common Shares Outstanding		97,176			93,602			3,574

2

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As of September 30, 2017 and December 31, 2016

(in thousands)	September 30, 2017		December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents	$	252	$	386,093
Accounts receivable, net		129,219		73,322
Inventories, net		14,538		14,222
Derivative instruments		3,895		50
Income tax receivable		9,598		27,153
Prepayments and other		5,838		5,071
Total current assets		163,340		505,911
Property, Plant and Equipment
Oil and natural gas properties, net		4,633,512		4,016,683
Other property and equipment, net		45,198		44,869
Total property, plant and equipment, net		4,678,710		4,061,552
Other postretirement assets		3,583		3,619
Noncurrent derivative instruments		1,064		—
Other assets		6,879		8,741
TOTAL ASSETS	$	4,853,576	$	4,579,823
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Long-term debt due within one year	$	—	$	24,000
Accounts payable		101,819		65,031
Accrued taxes		14,585		7,252
Accrued wages and benefits		21,268		25,089
Accrued capital costs		67,176		79,988
Revenue and royalty payable		48,429		51,217
Derivative instruments		18,089		65,467
Other		11,402		20,160
Total current liabilities		282,768		338,204
Long-term debt		765,759		527,443
Asset retirement obligations		86,643		81,544
Deferred income taxes		535,002		495,888
Noncurrent derivative instruments		2,962		3,006
Other long-term liabilities		7,162		13,136
Total liabilities		1,680,296		1,459,221
Total Shareholders’ Equity		3,173,280		3,120,602
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	4,853,576	$	4,579,823

3

SELECTED BUSINESS SEGMENT DATA (UNAUDITED)

For the 3 months ending September 30, 2017 and 2016

	3rd Quarter
(in thousands, except sales price and per unit data)	2017			2016			Change
Operating and production data
Oil, natural gas liquids and natural gas sales
Oil	$	203,281		$	138,388		$	64,893
Natural gas liquids		25,508			12,067			13,441
Natural gas		20,325			13,518			6,807
Total	$	249,114		$	163,973		$	85,141
Open non-cash mark-to-market gains (losses) on derivative instruments
Oil	$	(46,395	)	$	22,984		$	(69,379	)
Natural gas liquids		(15,765	)		(954	)		(14,811	)
Natural gas		(105	)		2,992			(3,097	)
Total	$	(62,265	)	$	25,022		$	(87,287	)
Closed gains (losses) on derivative instruments
Oil	$	5,388		$	(4,118	)	$	9,506
Natural gas liquids		(1,923	)		—			(1,923	)
Natural gas		1,190			(492	)		1,682
Total	$	4,655		$	(4,610	)	$	9,265
Total revenues	$	191,504		$	184,385		$	7,119
Production volumes
Oil (MBbl)		4,510			3,325			1,185
Natural gas liquids (MMgal)		60.6			41.2			19.4
Natural gas (MMcf)		9,174			5,958			3,216
Total production volumes (MBOE)		7,483			5,298			2,185
Average daily production volumes
Oil (MBbl/d)		49.0			36.1			12.9
Natural gas liquids (MMgal/d)		0.7			0.4			0.3
Natural gas (MMcf/d)		99.7			64.8			34.9
Total average daily production volumes (MBOE/d)		81.3			57.6			23.7
Average realized prices excluding effects of open non-cash mark-to-market derivative instruments
Oil (per barrel)	$	46.27		$	40.38		$	5.89
Natural gas liquids (per gallon)	$	0.39		$	0.29		$	0.10
Natural gas (per Mcf)	$	2.35		$	2.19		$	0.16
Average realized prices excluding effects of all derivative instruments
Oil (per barrel)	$	45.07		$	41.62		$	3.45
Natural gas liquids (per gallon)	$	0.42		$	0.29		$	0.13
Natural gas (per Mcf)	$	2.22		$	2.27		$	(0.05	)
Costs per BOE
Oil, natural gas liquids and natural gas production expenses	$	5.95		$	7.98		$	(2.03	)
Production and ad valorem taxes	$	2.05		$	2.07		$	(0.02	)
Depreciation, depletion and amortization	$	17.61		$	20.42		$	(2.81	)
Exploration expense	$	0.08		$	—		$	0.08
General and administrative	$	2.87		$	4.10		$	(1.23	)
Capital expenditures (including acquisitions)	$	251,621		$	211,393		$	40,228

4

SELECTED BUSINESS SEGMENT DATA (UNAUDITED)

For the 9 months ending September 30, 2017 and 2016

	Year-to-date
(in thousands, except sales price and per unit data)	2017			2016			Change
Operating and production data
Oil, natural gas liquids and natural gas sales
Oil	$	532,652		$	386,905		$	145,747
Natural gas liquids		59,776			34,584			25,192
Natural gas		51,784			36,885			14,899
Total	$	644,212		$	458,374		$	185,838
Open non-cash mark-to-market gains (losses) on derivative instruments
Oil	$	42,730		$	(33,444	)	$	76,174
Natural gas liquids		(4,148	)		(954	)		(3,194	)
Natural gas		8,856			(1,462	)		10,318
Total	$	47,438		$	(35,860	)	$	83,298
Closed gains (losses) on derivative instruments
Oil	$	(470	)	$	(5,321	)	$	4,851
Natural gas liquids		(3,468	)		—			(3,468	)
Natural gas		1,537			1,176			361
Total	$	(2,401	)	$	(4,145	)	$	1,744
Total revenues	$	689,249		$	418,369		$	270,880
Production volumes
Oil (MBbl)		11,608			10,269			1,339
Natural gas liquids (MMgal)		146.0			126.0			20.0
Natural gas (MMcf)		22,500			20,700			1,800
Total production volumes (MBOE)		18,833			16,719			2,114
Average daily production volumes
Oil (MBbl/d)		42.5			37.5			5.0
Natural gas liquids (MMgal/d)		0.5			0.5			—
Natural gas (MMcf/d)		82.4			75.5			6.9
Total average daily production volumes (MBOE/d)		69.0			61.0			8.0
Average realized prices excluding effects of open non-cash mark-to-market derivative instruments
Oil (per barrel)	$	45.85		$	37.16		$	8.69
Natural gas liquids (per gallon)	$	0.39		$	0.27		$	0.12
Natural gas (per Mcf)	$	2.37		$	1.84		$	0.53
Average realized prices excluding effects of all derivative instruments
Oil (per barrel)	$	45.89		$	37.68		$	8.21
Natural gas liquids (per gallon)	$	0.41		$	0.27		$	0.14
Natural gas (per Mcf)	$	2.30		$	1.78		$	0.52
Costs per BOE
Oil, natural gas liquids and natural gas production expenses	$	6.89		$	7.94		$	(1.05	)
Production and ad valorem taxes	$	2.20		$	2.00		$	0.20
Depreciation, depletion and amortization	$	18.74		$	20.61		$	(1.87	)
Exploration expense	$	0.33		$	0.11		$	0.22
General and administrative	$	3.27		$	4.47		$	(1.20	)
Capital expenditures (includes acquisitions)	$	971,867		$	428,443		$	543,424

5

EX-99.3

Exhibit 99.3

Non-GAAP Financial Measures

Adjusted Net Income is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles) which excludes the effects of certain non-cash mark-to-market derivative financial instruments. Adjusted income from continuing operations further excludes impairment losses, certain prior period losses associated with a reduction in force, and income associated with divestitures. Energen believes that excluding the impact of these items is more useful to analysts and investors in comparing the results of operations and operational trends between reporting periods and relative to other oil and gas producing companies.

	Three Months Ended 9/30/17
Energen Net Income ($ in millions except per share data)	Net Income			Per Diluted Share
Net Income (Loss) All Operations (GAAP)		(18.5	)		(0.19	)
Non-cash mark-to-market losses (net of $22.1 tax)		40.2			0.41
Asset impairment, other (net of tax)		0.1			nm
Income associated with property sales (net of $2.0 tax)		(2.5	)		(0.03	)
Adjusted Income from Continuing Operations (Non-GAAP)		19.2			0.20

	Three Months Ended 9/30/16
Energen Net Income ($ in millions except per share data)	Net Income			Per Diluted Share
Net Income (Loss) All Operations (GAAP)		53.3			0.55
Non-cash mark-to-market gains (net of $8.9 tax)		(16.1	)		(0.17	)
Asset impairment, other (net of $0.3 tax)		0.3			nm
Reduction in force expenses (net of $0.2 tax)		0.3			nm
Income associated property sales (net of $32.3 tax)		(59.2	)		(0.61	)
Adjusted Income from Continuing Operations (Non-GAAP)		(21.4	)		(0.22	)

Note: Amounts may not sum due to rounding

Non-GAAP Financial Measures

Earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses (EBITDAX) is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Adjusted EBITDAX from continuing operations further excludes impairment losses, certain non-cash mark-to-market derivative financial instruments, prior period losses associated with a reduction in force, and income associated with divestitures. Energen believes these measures allow analysts and investors to understand the financial performance of the company from core business operations, without including the effects of capital structure, tax rates and depreciation. Further, this measure is useful in comparing the company and other oil and gas producing companies.

Reconciliation To GAAP Information	Three Months Ended 9/30
($ in millions)	2017			2016
Energen Net Income (Loss) (GAAP)		(18.5	)		53.3
Income associated with property sales, net of tax*		(2.5	)		(59.2	)
Net Income (Loss) Excluding Property Sales (Non-GAAP)		(21.0	)		(5.9	)
Interest expense		9.9			9.0
Income tax expense (benefit) **		(11.2	)		(3.9	)
Depreciation, depletion and amortization **		131.8			108.0
Accretion expense **		1.5			1.6
Exploration expense **		0.6			nm
Adjustment for asset impairment		0.1			0.6
Adjustment for mark-to-market (gains)/ losses		62.3			(25.0	)
Adjustment for reduction in force expenses		0.0			0.5
Energen Adjusted EBITDAX from Continuing Operations (Non-GAAP)		174.0			84.8

Note: Amounts may not sum due to rounding

*For quarter to quarter comparability, excluded from GAAP income in the current quarter is an immaterial sale of certain unproved leasehold properties in Wyoming.

** Amount adjusted to exclude 2016 property sales in prior period. See reconciliation to GAAP Information for the Three Months Ended 9/30/2016.

Non-GAAP Financial Measures

The consolidated statement of income excluding certain divestments is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Energen believes excluding information associated with 2016 property sales provides analysts and investors useful information to understand the financial performance of the company from ongoing business operations. Further, this information is useful in comparing the company and other oil and gas producing companies operating primarily in the Permian Basin.

Energen Net Income (Loss) Excluding 2016 Property Sales
Reconciliation to GAAP Information	Three Months Ended September 30, 2016
(in thousands except per share and production data)
	GAAP			2016 Property Sales			Non-GAAP
Revenues
Oil, natural gas liquids and natural gas sales	$	163,973		$	2,162		$	161,811
Gain (loss) on derivative instruments		20,412			—			20,412
Total Revenues		184,385			2,162			182,223
Operating Costs and Expenses
Oil, natural gas liquids and natural gas production		42,280			1,253			41,027
Production and ad valorem taxes		10,987			621			10,366
O&G Depreciation, depletion and amortization		106,989			215			106,774
FF&E Depreciation, depletion and amortization		1,178			—			1,178
Asset impairment		587			—			587
Exploration		18			6			12
General and administrative†		21,710			(53	)		21,763
Accretion of discount on asset retirement obligations		1,556			1			1,555
(Gain) loss on sale of assets and other		(91,222	)		(91,371	)		149
Total costs and expenses		94,083			(89,328	)		183,411
Operating Income (Loss)		90,302			91,490			(1,188	)
Other Income/(Expense)
Interest expense		(8,987	)		—			(8,987	)
Other income		421			12			409
Total other expense		(8,566	)		12			(8,578	)
Loss Before Income Taxes		81,736			91,502			(9,766	)
Income tax expense (benefit)		28,422			32,289			(3,867	)
Net Income (Loss)	$	53,314		$	59,213		$	(5,899	)
Diluted Earnings Per Average Common Share	$	0.55		$	0.60		$	(0.06	)
Basic earning Per Average Common Share	$	0.55		$	0.60		$	(0.06	)
Oil		3,325			30			3,295
NGL		980			22			958
Natural Gas		993			43			950
Total Production (mboe)		5,298			95			5,203
Total Production (boepd)		57,587			1,033			56,554

Note: Amounts may not sum due to rounding

† General and administrative includes $515 of expense related to the reductions in force