Derivative Commodity Instruments (Tables)

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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, 2013
	Oil and Gas Operations				Natural Gas Distribution		Total
Derivative assets or (liabilities) designated as hedging instruments
Accounts receivable	$	51,277			$	—	$	51,277
Long-term asset derivative instruments	25,921				—		25,921
Total derivative assets	77,198				—		77,198
Accounts receivable	(36,245		)	*	—		(36,245		)
Long-term asset derivative instruments	(6,594		)	*	—		(6,594		)
Accounts payable	(11,983		)		—		(11,983		)
Long-term liability derivative instruments	(7,275		)		—		(7,275		)
Total derivative liabilities	(62,097		)		—		(62,097		)
Total derivatives designated	15,101				—		15,101
Derivative assets or (liabilities) not designated as hedging instruments
Accounts receivable	(4,342		)	*	—		(4,342		)
Long-term asset derivative instruments	6,872				—		6,872
Total derivative assets	2,530				—		2,530
Accounts payable	(20,816		)		—		(20,816		)
Long-term liability derivative instruments	(1,074		)		—		(1,074		)
Total derivative liabilities	(21,890		)		—		(21,890		)
Total derivatives not designated	(19,360		)		—		(19,360		)
Total derivatives	$	(4,259	)		$	—	$	(4,259	)

(in thousands)	December 31, 2012
	Oil and Gas Operations				Natural Gas Distribution			Total
Derivative assets or (liabilities) designated as hedging instruments
Accounts receivable	$	87,514			$	—		$	87,514
Long-term asset derivative instruments	37,954				—			37,954
Total derivative assets	125,468				—			125,468
Accounts receivable	(37,326		)	*	—			(37,326		)
Long-term asset derivative instruments	(6,810		)	*	—			(6,810		)
Long-term liability derivative instruments	(8,726		)		—			(8,726		)
Total derivative liabilities	(52,862		)		—			(52,862		)
Total derivatives designated	72,606				—			72,606
Derivative assets or (liabilities) not designated as hedging instruments
Accounts receivable	14,604				—			14,604
Long-term asset derivative instruments	9,433				—			9,433
Total derivative assets	24,037				—			24,037
Accounts payable	—				(2,593		)	(2,593		)
Long-term liability derivative instruments	(874		)		—			(874		)
Total derivative liabilities	(874		)		(2,593		)	(3,467		)
Total derivatives not designated	23,163				(2,593		)	20,570
Total derivatives	$	95,769			$	(2,593	)	$	93,176

* 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 Statement of Income	Three months ended March 31, 2013			Three months ended March 31, 2012
Loss recognized in OCI on derivatives (effective portion), net of tax of ($16.4) million and ($7.5) million	—	$	(26,798	)	$	(12,234	)
Gain reclassified from accumulated OCI into income (effective portion)	Operating revenues	$	17,824		$	1,872
Loss recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)	Operating revenues	$	(534	)	$	(2,666	)

Schedule of Derivatives Not Designated as Hedging Instruments on Income Statements

The following table details the effect of open and closed derivative commodity instruments not designated as hedging instruments on the income statement:

(in thousands)	Location on Statement of Income	Three months ended March 31, 2013			Three months ended March 31, 2012
Loss recognized in income on derivatives	Operating revenues	$	(31,501	)	$	(44,005	)

Schedule of Hedging Transactions

Energen Resources entered into the following transactions for the remainder of 2013 and subsequent years:

Production Period	Total Hedged Volumes		Average Contract Price	Description
Natural Gas
2013	9.4	Bcf	$4.83 Mcf	NYMEX Swaps
	24.4	Bcf	$4.56 Mcf	Basin Specific Swaps - San Juan
	3.4	Bcf	$3.45 Mcf	Basin Specific Swaps - Permian
2014	10.6	Bcf	$4.55 Mcf	NYMEX Swaps
	25.7	Bcf	$4.72 Mcf	Basin Specific Swaps - San Juan
	9.7	Bcf	$3.81 Mcf	Basin Specific Swaps - Permian
Oil
2013	6,752	MBbl	$90.99 Bbl	NYMEX Swaps
2014	9,796	MBbl	$92.64 Bbl	NYMEX Swaps
2015	720	MBbl	$90.10 Bbl	NYMEX Swaps
Oil Basis Differential
2013	2,701	MBbl	$(3.02) Bbl	WTS/WTI Basis Swaps*
	2,995	MBbl	$(1.00) Bbl	WTI/WTI Basis Swaps**
Natural Gas Liquids
2013	33.9	MMGal	$1.02 Gal	Liquids Swaps
*WTS - West Texas Sour/Midland, WTI - West Texas Intermediate/Cushing
**WTI - West Texas Intermediate/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, 2013
(in thousands)	Level 2*			Level 3*			Total
Current assets	$	(12,452	)	$	23,142		$	10,690
Noncurrent assets	12,194			14,005			26,199
Current liabilities	(24,834		)	(7,965		)	(32,799		)
Noncurrent liabilities	(5,626		)	(2,723		)	(8,349		)
Net derivative asset (liability)	$	(30,718	)	$	26,459		$	(4,259	)

	December 31, 2012
(in thousands)	Level 2*			Level 3*			Total
Current assets	$	(3,629	)	$	68,421		$	64,792
Noncurrent assets	18,899			21,678			40,577
Current liabilities	(2,593		)	—			(2,593		)
Noncurrent liabilities	(8,520		)	(1,080		)	(9,600		)
Net derivative asset	$	4,157		$	89,019		$	93,176

* 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, 2013			March 31, 2012
Balance at beginning of period	$	89,019		$	65,801
Realized gains	27,107			13,181
Unrealized gains (losses) relating to instruments held at the reporting date*	(63,482		)	39,767
Settlements during period	(26,185		)	(13,826		)
Balance at end of period	$	26,459		$	104,923

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, 2013			Valuation Technique*	Unobservable Input*	Range
Natural Gas Basis - San Juan
2013	$	14,529		Discounted Cash Flow	Forward Basis	($0.14 - $0.16) Mcf
2014	$	16,066		Discounted Cash Flow	Forward Basis	($0.14 - $0.16) Mcf
Natural Gas Basis - Permian
2013	$	(1,854	)	Discounted Cash Flow	Forward Basis	($0.12) Mcf
2014	$	(2,731	)	Discounted Cash Flow	Forward Basis	($0.12 - $0.14) Mcf
Oil Basis - WTS/WTI
2013	$	(6,209	)	Discounted Cash Flow	Forward Basis	($0.66) Bbl
Oil Basis - WTI/WTI
2013	$	(2,207	)	Discounted Cash Flow	Forward Basis	($0.18 - $0.28) Bbl
Natural Gas Liquids
2013	$	8,865		Discounted Cash Flow	Forward Price	$0.75 - $0.83 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.

Offsetting Assets and Liabilities

The tables below set forth information about the offsetting of derivative assets and liabilities as follows:

	March 31, 2013
								Gross Amounts Not Offset in the Balance Sheets
(in thousands)	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheets			Net Amount Presented in the Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Derivative assets	$	79,728	$	(42,839	)	$	36,889	$	—	$	—	$	36,889
Derivative liabilities	$	83,987	$	(42,839	)	$	41,148	$	—	$	—	$	41,148

	December 31, 2012
								Gross Amounts Not Offset in the Balance Sheets
(in thousands)	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheets			Net Amount Presented in the Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Derivative assets	$	149,504	$	(44,135	)	$	105,369	$	—	$	—	$	105,369
Derivative liabilities	$	56,328	$	(44,135	)	$	12,193	$	—	$	—	$	12,193