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Derivative Commodity Instruments (Tables)
 3 Months Ended
Mar. 31, 2012
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)
March 31, 2012
 
Oil and Gas Operations
 
Natural Gas Distribution

Total
Derivative assets or (liabilities) designated as hedging instruments
 
 
 
 
Accounts receivable
$
90,764

 
$
—

$
90,764

Long-term asset derivative instruments
94,764

 
—

94,764

Total derivative assets
185,528

 
—

185,528

Accounts receivable
(65,461
)
*
—

(65,461
)
Long-term asset derivative instruments
(64,621
)
*
—

(64,621
)
Accounts payable
(36,536
)
 
—

(36,536
)
Long-term liability derivative instruments
(33,774
)
 
—

(33,774
)
Total derivative liabilities
(200,392
)
 
—

(200,392
)
Total derivatives designated
(14,864
)
 
—

(14,864
)
Derivative assets or (liabilities) not designated as hedging instruments
 
 
 
 
Accounts receivable
(3,624
)
*
—

(3,624
)
Long-term asset derivative instruments
(19,535
)
*
—

(19,535
)
Total derivative assets
(23,159
)
 
—

(23,159
)
Accounts payable
(28,916
)
 
(47,885
)
(76,801
)
Long-term liability derivative instruments
(26,939
)
 
—

(26,939
)
Total derivative liabilities
(55,855
)
 
(47,885
)
(103,740
)
Total derivatives not designated
(79,014
)
 
(47,885
)
(126,899
)
Total derivatives
$
(93,878
)
 
$
(47,885
)
$
(141,763
)

(in thousands)
December 31, 2011
 
Oil and Gas Operations
 
Natural Gas Distribution

Total
Derivative assets or (liabilities) designated as hedging instruments
 
 
 
 
Accounts receivable
$
73,636

 
$
—

$
73,636

Long-term asset derivative instruments
75,982

 
—

75,982

Total derivative assets
149,618

 
—

149,618

Accounts receivable
(48,174
)
*
—

(48,174
)
Long-term asset derivative instruments
(36,341
)
*
—

(36,341
)
Accounts payable
(37,070
)
 
—

(37,070
)
Long-term liability derivative instruments
(20,386
)
 
—

(20,386
)
Total derivative liabilities
(141,971
)
 
—

(141,971
)
Total derivatives designated
7,647

 
—

7,647

Derivative assets or (liabilities) not designated as hedging instruments
 
 
 
 
Accounts receivable
(3,670
)
*
—

(3,670
)
Long-term asset derivative instruments
(8,585
)
*
—

(8,585
)
Total derivative assets
(12,255
)
 
—

(12,255
)
Accounts payable
(13,416
)
 
(56,804
)
(70,220
)
Long-term liability derivative instruments
(10,922
)
 
(3,070
)
(13,992
)
Total derivative liabilities
(24,338
)
 
(59,874
)
(84,212
)
Total derivatives not designated
(36,593
)
 
(59,874
)
(96,467
)
Total derivatives
$
(28,946
)
 
$
(59,874
)
$
(88,820
)

* 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
March 31, 2012
Three months
ended
March 31, 2011
Loss recognized in OCI on derivative (effective portion), net of tax of ($7.5) million and ($59.4) million
—
$
(12,234
)
$
(96,873
)
Gain reclassified from accumulated OCI into income (effective portion)
Operating revenues
$
1,872

$
7,591

Loss recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Operating revenues
$
(2,666
)
$
(1,651
)
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
March 31, 2012
Three months
ended
March 31, 2011
Loss recognized in income on derivative
Operating revenues
$
(44,005
)
$
(1
)
Schedule of Hedging Transactions
Energen Resources entered into the following transactions for the remainder of 2012 and subsequent years:

Production Period
Total Hedged Volumes
Average Contract
Price

Description
Natural Gas
 
 
 
2012
7.9
 Bcf
$5.07 Mcf
NYMEX Swaps
 
21.1
 Bcf
$4.60 Mcf
Basin Specific Swaps - San Juan
2013
11.2
 Bcf
$4.98 Mcf
NYMEX Swaps
 
27.7
 Bcf
$4.76 Mcf
Basin Specific Swaps - San Juan
2014
7.8
 Bcf
$4.76 Mcf
NYMEX Swaps
 
22.0
 Bcf
$4.88 Mcf
Basin Specific Swaps - San Juan
Oil
 
 
 
2012
5,307
 MBbl
$88.57 Bbl
NYMEX Swaps
2013
8,098
 MBbl
$90.65 Bbl
NYMEX Swaps
2014
7,892
 MBbl
$92.70 Bbl
NYMEX Swaps
Oil Basis Differential
 
 
 
2012
2,312
 MBbl
$(2.95) Bbl
WTS/WTI Basis Swaps*
2013
2,768
 MBbl
$(3.40) Bbl
WTS/WTI Basis Swaps*
Natural Gas Liquids
 
 
 
2012
44.2
 MMGal
$0.98 Gal
Liquids Swaps
2013
44.5
 MMGal
$1.02 Gal
Liquids Swaps
*WTS - West Texas Sour/Midland, WTI -West Texas Intermediate/Cushing
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:

 
March 31, 2012
(in thousands)
Level 2*
Level 3*
Total
Current assets
$
(33,849
)
$
55,528

$
21,679

Noncurrent assets
(40,635
)
51,243

10,608

Current liabilities
(111,489
)
(1,848
)
(113,337
)
Noncurrent liabilities
(60,713
)
—

(60,713
)
Net derivative asset (liability)
$
(246,686
)
$
104,923

$
(141,763
)

 
December 31, 2011
(in thousands)
Level 2*
Level 3*
Total
Current assets
$
(14,843
)
$
36,635

$
21,792

Noncurrent assets
(8,382
)
39,438

31,056

Current liabilities
(98,468
)
(8,822
)
(107,290
)
Noncurrent liabilities
(32,928
)
(1,450
)
(34,378
)
Net derivative asset (liability)
$
(154,621
)
$
65,801

$
(88,820
)

* 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)
March 31, 2012
March 31, 2011
Balance at beginning of period
$
65,801

$
42,755

Realized losses
(1,291
)
(702
)
Unrealized gains (losses) relating to instruments held at the reporting date
54,239

(9,870
)
Settlements during period
(13,826
)
(15,256
)
Balance at end of period
$
104,923

$
16,927
Schedule of Fair Value Inputs, Derivatives, Quantitative Information
The tables below set forth quantitative information about the Company’s Level 3 fair value measurements of derivative commodity instruments as follows:

(in thousands)
Fair Value as of March 31, 2012
Valuation Technique*
Unobservable Input*
Range
Natural Gas Basis - San Juan
 
 
 
 
2012
$
47,977

Discounted Cash Flow
Forward Basis
($0.16 - $0.17) Mcf
2013
$
40,323

Discounted Cash Flow
Forward Basis
($0.19 - $0.21) Mcf
2014
$
23,314

Discounted Cash Flow
Forward Basis
($0.19 - $0.21) Mcf
Oil Basis - WTS/WTI
 
 
 
 
2012
$
493

Discounted Cash Flow
Forward Basis
($3.17 - $3.25) Bbl
2013
$
(2,392
)
Discounted Cash Flow
Forward Basis
($2.50 - $2.85) Bbl
Natural Gas Liquids
 
 
 
 
2012
$
(5,339
)
Discounted Cash Flow
Forward Price
 $1.00 - $1.18 Gal
2013
$
547

Discounted Cash Flow
Forward Price
 $0.96 - $1.05 Gal
*Discounted cash flow represents an income approach in calculating fair value including the referenced unobservable input and a discount reflecting credit quality of the counterparty.
Alabama Gas Corporation
  
Derivative [Line Items]  
Schedule of Hedging Transactions
Alagasco entered into the following natural gas transactions for the remainder of 2012 and subsequent years:

Production Period
Total Hedged Volumes
 
Description
2012
10.8
 Bcf
 
NYMEX Swaps
2013
1.5
 Bcf
 
NYMEX Swaps