ACQUISITION AND DISPOSITION OF PROPERTIES

In June 2013, Energen Resources classified its Black Warrior Basin properties in Alabama as held-for-sale and began marketing these coalbed methane assets. At December 31, 2012, proved reserves associated with Energen's Black Warrior Basin properties totaled 97 Bcf of natural gas. The Company anticipates the sale being completed within the next twelve-months and using the proceeds from the sale to repay short-term obligations.

During the first quarter of 2013, Alagasco entered into a purchase and sale agreement to sell its Metro Operations Center which is located in Birmingham, Alabama, and has been in service since the 1940's. The property is being classified as held-for sale and has a sales price of approximately $14 million. The sale is expected to close in August of 2013. Effective upon closing, Alagasco plans to lease the facility from the purchaser for a period of approximately 18 months.

The following table details held-for-sale properties by major classes of assets and liabilities:



(in thousands)	June 30, 2013
	Oil and Gas Operations			Natural Gas Distribution			Total
Accounts receivable	$	5,257		$	—		$	5,257
Inventories	286			—			286
Oil and gas properties	294,607			—			294,607
Less accumulated depreciation, depletion and amortization	(172,464		)	—			(172,464		)
Utility plant	—			7,971			7,971
Less accumulated depreciation	—			(4,960		)	(4,960		)
Other property, net	46			—			46
Total assets held-for-sale	127,732			3,011			130,743
Accounts payable	(1,573		)	—			(1,573		)
Royalty payable	(646		)	—			(646		)
Other current liabilities	(266		)	—			(266		)
Other long-term liabilities	(5,432		)	—			(5,432		)
Total liabilities held-for-sale	(7,917		)	—			(7,917		)
Total held-for-sale properties	$	119,815		$	3,011		$	122,826

During the first quarter of 2012, Energen Resources recognized a noncash impairment writedown on certain properties in East Texas of $21.5 million pre-tax to adjust the carrying amount of these properties to their fair value based on expected future discounted cash flows. Significant assumptions in valuing the proved reserves included the reserve quantities, anticipated operating costs, anticipated production taxes, future expected natural gas prices and basis differentials, anticipated production declines, and a discount rate of 10 percent commensurate with the risk of the underlying cash flow estimates. The impairment was caused by the impact of lower future natural gas prices. During the first quarter of 2012, future natural gas price curves shifted significantly lower, especially in the next 5 years. This nonrecurring impairment writedown is classified as Level 3 fair value.