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Derivative Commodity Instruments (Tables)
9 Months Ended
Sep. 30, 2011
Derivative [Line Items] 
Schedule of Fair Values of Commodity Contracts by business Segment on Balance Sheet
The following tables detail the fair values of commodity contracts by business segment on the balance sheets:

(in thousands)
September 30, 2011
 
Oil and Gas Operations
 
Natural Gas Distribution

Total
Derivative assets or (liabilities) designated as hedging instruments
 
 
 
 
Accounts receivable
$
88,839

 
$
—

$
88,839

Long-term asset derivative instruments
67,461

 
—

67,461

Total derivative assets
156,300

 
—

156,300

Accounts receivable
(25,642
)
*
—

(25,642
)
Accounts payable
(1,298
)
 
—

(1,298
)
Long-term liability derivative instruments
(9,049
)
*
—

(9,049
)
Total derivative liabilities
(35,989
)
 
—

(35,989
)
Total derivatives designated
120,311

 
—

120,311

Derivative assets or (liabilities) not designated as hedging instruments
 
 
 
 
Accounts receivable
10,745

 
—

10,745

Long-term asset derivative instruments
42,482

 
—

42,482

Total derivative assets
53,227

 
—

53,227

Accounts payable
(40
)
 
(44,137
)
(44,177
)
Long-term liability derivative instruments
—

 
(13,050
)
(13,050
)
Total derivative liabilities
(40
)
 
(57,187
)
(57,227
)
Total derivatives not designated
53,187

 
(57,187
)
(4,000
)
Total derivatives
$
173,498

 
$
(57,187
)
$
116,311


(in thousands)
December 31, 2010
 
Oil and Gas Operations
 
Natural Gas Distribution

Total
Derivative assets or (liabilities) designated as hedging instruments
 
 
 
 
Accounts receivable
$
85,867

 
$
—

$
85,867

Long-term asset derivative instruments
3,156

*
—

3,156

Total derivative assets
89,023

 
—

89,023

Accounts receivable
(25,315
)
*
—

(25,315
)
Accounts payable
(50,508
)
 
—

(50,508
)
Long-term liability derivative instruments
(83,631
)
 
—

(83,631
)
Total derivative liabilities
(159,454
)
 
—

(159,454
)
Total derivatives designated
(70,431
)
 
—

(70,431
)
Derivative assets or (liabilities) not designated as hedging instruments
 
 
 
 
Accounts payable
(110
)
 
(27,906
)
(28,016
)
Long-term liability derivative instruments
—

 
(32,461
)
(32,461
)
Total derivative liabilities
(110
)
 
(60,367
)
(60,477
)
Total derivatives not designated
(110
)
 
(60,367
)
(60,477
)
Total derivatives
$
(70,541
)
 
$
(60,367
)
$
(130,908
)

* Amounts classified in accordance with accounting guidance which permits offsetting fair value amounts recognized for multiple derivative instruments executed with the same counterparty under a master netting arrangement.
Schedule of Cash Flow Hedging Relationships on Financial Statements
The following table details the effect of derivative commodity instruments in cash flow hedging relationships on the financial statements:

(in thousands)
Location on Income Statement
Three months
ended
September 30, 2011
Three months
ended
September 30, 2010
Gain (loss) recognized in OCI on derivative (effective portion), net of tax of $105.7 million and ($4.4) million
—
$
172,430

$
(7,244
)
Gain reclassified from accumulated OCI into income (effective portion)
Operating revenues
$
11,207

$
56,456

Gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Operating revenues
$
5,631

$
(1,861
)

(in thousands)
Location on Income Statement
Nine months
ended
September 30, 2011
Nine months
ended
September 30, 2010
Gain recognized in OCI on derivative (effective portion), net of tax of $76.6 million and $55.9 million
—
$
125,005

$
91,141

Gain reclassified from accumulated OCI into income (effective portion)
Operating revenues
$
13,028

$
149,845

Gain recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Operating revenues
$
3,240

$
18

Schedule of Derivatives Not Designated as Hedging Instruments on Income Statements
The following table details the effect of derivative commodity instruments not designated as hedging instruments on the income statements:

(in thousands)
Location on Income Statement
Three months
ended
September 30, 2011
Three months
ended
September 30, 2010
Gain (loss) recognized in income on derivative
Operating revenues
$
53,227

$
—

 
 
 
 
(in thousands)
Location on Income Statement
Nine months
ended
September 30, 2011
Nine months
ended
September 30, 2010
Gain (loss) recognized in income on derivative
Operating revenues
$
53,225

$
(4
)
Schedule of Hedging Transactions
Energen Resources entered into the following transactions for the remainder of 2011 and subsequent years:

Production Period
Total Hedged Volumes
Average Contract
Price

Description
Natural Gas
 
 
 
2011
3.5 Bcf
$6.47 Mcf
NYMEX Swaps
 
9.7 Bcf
$5.63 Mcf
Basin Specific Swaps
2012
11.0 Bcf
$5.07 Mcf
NYMEX Swaps
 
29.5 Bcf
$4.60 Mcf
Basin Specific Swaps
2013
8.8 Bcf
$5.30 Mcf
NYMEX Swaps
 
25.1 Bcf
$4.88 Mcf
Basin Specific Swaps
2014
3.0 Bcf
$5.72 Mcf
NYMEX Swaps
 
16.8 Bcf
$5.16 Mcf
Basin Specific Swaps
Oil
 
 
 
2011
1,334 MBbl
$83.73 Bbl
NYMEX Swaps
2012
6,282 MBbl
$87.40 Bbl
NYMEX Swaps
2013
6,827 MBbl
$89.31 Bbl
NYMEX Swaps
2014
5,612 MBbl
$90.56 Bbl
NYMEX Swaps
Oil Basis Differential
 
 
 
2011
854 MBbl
*
Basis Swaps
2012
3,124 MBbl
*
Basis Swaps
2013
2,768 MBbl
*
Basis Swaps
Natural Gas Liquids
 
 
 
2011
10.5 MMGal
 $0.90 Gal
Liquids Swaps
2012
43.4 MMGal
 $0.88 Gal
Liquids Swaps
2013
44.5 MMGal
 $1.02 Gal
Liquids Swaps
* Average contract prices are not meaningful due to the varying nature of each contract.
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following sets forth derivative assets and liabilities that were measured at fair value on a recurring basis:

 
September 30, 2011
(in thousands)
Level 2*
Level 3*
Total
Current assets
$
51,263

$
22,680

$
73,943

Noncurrent assets
84,700

16,475

101,175

Current liabilities
(42,806
)
(2,670
)
(45,476
)
Noncurrent liabilities
(13,050
)
(281
)
(13,331
)
Net derivative asset
$
80,107

$
36,204

$
116,311


 
December 31, 2010
(in thousands)
Level 2*
Level 3*
Total
Current assets
$
10,316

$
50,236

$
60,552

Current liabilities
(76,527
)
(1,997
)
(78,524
)
Noncurrent liabilities
(107,452
)
(5,484
)
(112,936
)
Net derivative asset (liability)
$
(173,663
)
$
42,755

$
(130,908
)

* Amounts classified in accordance with accounting guidance which permits offsetting fair value amounts recognized for multiple derivative instruments executed with the same counterparty under a master netting arrangement.
Schedule of Changes in Fair Value of Derivative Instruments Classified as Level 3
The tables below set forth a summary of changes in the fair value of the Company’s Level 3 derivative commodity instruments as follows:

 
Three months ended
Three months ended
(in thousands)
September 30, 2011
September 30, 2010
Balance at beginning of period
$
13,446

$
91,817

Realized (gains) losses
1,088

(455
)
Unrealized gains relating to instruments held at the reporting date
32,235

26,282

Settlements during period
(10,565
)
(30,767
)
Balance at end of period
$
36,204

$
86,877


 
Nine months ended
Nine months ended
(in thousands)
September 30, 2011
September 30, 2010
Balance at beginning of period
$
42,755

$
64,517

Realized (gains) losses
1,088

(455
)
Unrealized gains relating to instruments held at the reporting date
28,681

102,169

Settlements during period
(36,320
)
(79,354
)
Balance at end of period
$
36,204

$
86,877

Alabama Gas Corporation
 
Derivative [Line Items] 
Schedule of Hedging Transactions
Alagasco entered into the following natural gas transactions for the remainder of 2011 and subsequent years:

Production Period
Total Hedged Volumes
 
Description
2011
3.9 Bcf
 
NYMEX Swaps
2012
17.2 Bcf
 
NYMEX Swaps
2013
1.5 Bcf
 
NYMEX Swaps