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Derivative Commodity Instruments (Tables)
 9 Months Ended
Sep. 30, 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)
September 30, 2013
 
Oil and Gas Operations
 
Natural Gas Distribution

Total
Derivative assets or (liabilities) not designated as hedging instruments
 
 
 
 
Accounts receivable
$
53,082

 
$
—

$
53,082

Long-term asset derivative instruments
18,346

 
—

18,346

Total derivative assets
71,428

 
—

71,428

Accounts receivable
(40,789
)
*
—

(40,789
)
Long-term asset derivative instruments
(5,560
)
*
—

(5,560
)
Accounts payable
(31,928
)
 
—

(31,928
)
Long-term liability derivative instruments
(1,379
)
 
—

(1,379
)
Total derivative liabilities
(79,656
)
 
—

(79,656
)
Total derivatives not designated
$
(8,228
)
 
$
—

$
(8,228
)

(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
September 30, 2013
Three months
ended
September 30, 2012
Gain (loss) recognized in OCI on derivatives (effective portion), net of tax of $42 and ($30,622)
—
$
69

$
(49,962
)
Gain reclassified from accumulated OCI into income (effective portion)
Operating revenues
$
8,455

$
15,998

Loss recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)
Operating revenues
$
(22
)
$
(3,042
)

(in thousands)
Location on Statement of Income
Nine months
ended
September 30, 2013
Nine months
ended
September 30, 2012
Gain (loss) recognized in OCI on derivatives (effective portion), net of tax of ($6,669) and $30,621
—
$
(10,882
)
$
49,961

Gain reclassified from accumulated OCI into income (effective portion)
Operating revenues
$
29,391

$
39,012

Gain (loss) recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)
Operating revenues
$
835

$
(1,372
)
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
September 30, 2013
Three months
ended
September 30, 2012
Loss recognized in income on derivatives
Operating revenues
$
(92,313
)
$
(45,618
)

(in thousands)
Location on Statement of Income
Nine months
ended
September 30, 2013
Nine months
ended
September 30, 2012
Gain (loss) recognized in income on derivatives
Operating revenues
$
(70,735
)
$
33,825
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
3.0
 Bcf
$4.82 Mcf
NYMEX Swaps
 
8.9
 Bcf
$4.51 Mcf
Basin Specific Swaps - San Juan
 
1.6
 Bcf
$3.64 Mcf
Basin Specific Swaps - Permian
2014
10.6
 Bcf
$4.55 Mcf
NYMEX Swaps
 
31.4
 Bcf
$4.60 Mcf
Basin Specific Swaps - San Juan
 
9.7
 Bcf
$3.81 Mcf
Basin Specific Swaps - Permian
2015
6.0
 Bcf
$4.07 Mcf
Basin Specific Swaps - San Juan
Oil
 
 
 
2013
2,434
 MBbl
$91.44 Bbl
NYMEX Swaps
2014
9,796
 MBbl
$92.64 Bbl
NYMEX Swaps
2015
5,760
 MBbl
$88.85 Bbl
NYMEX Swaps
Oil Basis Differential
 
 
 
2013
907
 MBbl
$(2.99) Bbl
WTS/WTI Basis Swaps*
 
1,070
 MBbl
$(1.00) Bbl
WTI/WTI Basis Swaps**
Natural Gas Liquids
 
 
 
2013
12.0
 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:

 
September 30, 2013
(in thousands)
Level 2*
Level 3*
Total
Current assets
$
(12,712
)
$
25,005

$
12,293

Noncurrent assets
6,828

5,958

12,786

Current liabilities
(40,970
)
9,042

(31,928
)
Noncurrent liabilities
(2,580
)
1,201

(1,379
)
Net derivative asset (liability)
$
(49,434
)
$
41,206

$
(8,228
)

 
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)
September 30, 2013
September 30, 2012
Balance at beginning of period
$
51,131

$
103,456

Realized gains
10,852

18,737

Unrealized losses relating to instruments held at the reporting date*
(10,947
)
(46,983
)
Settlements during period
(9,830
)
(17,929
)
Balance at end of period
$
41,206

$
57,281



 
Nine months ended
Nine months ended
(in thousands)
September 30, 2013
September 30, 2012
Balance at beginning of period
$
89,019

$
65,801

Realized gains
41,952

51,858

Unrealized losses relating to instruments held at the reporting date*
(48,835
)
(9,328
)
Settlements during period
(40,930
)
(51,050
)
Balance at end of period
$
41,206

$
57,281
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 September 30, 2013
Valuation Technique*
Unobservable Input*
Range
Natural Gas Basis - San Juan
 
 
 
 
2013
$
9,499

Discounted Cash Flow
Forward Basis
($0.12 - $0.14) Mcf
2014
$
27,678

Discounted Cash Flow
Forward Basis
($0.13 - $0.15) Mcf
2015
$
1,201

Discounted Cash Flow
Forward Basis
($0.20) Mcf
Natural Gas Basis - Permian
 
 
 
 
2013
$
286

Discounted Cash Flow
Forward Basis
($0.14) Mcf
2014
$
825

Discounted Cash Flow
Forward Basis
($0.13 - $0.15) Mcf
Oil Basis - WTS/WTI
 
 
 
 
2013
$
(1,897
)
Discounted Cash Flow
Forward Basis
($1.06) Bbl
Oil Basis - WTI/WTI
 
 
 
 
2013
$
(641
)
Discounted Cash Flow
Forward Basis
($0.41 - $0.50) Bbl
Natural Gas Liquids
 
 
 
 
2013
$
4,255

Discounted Cash Flow
Forward Price
 $0.74 - $0.81 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:

 
September 30, 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
$
71,428

$
(46,349
)
$
25,079

$
—

$
—

$
25,079

Derivative liabilities
$
79,656

$
(46,349
)
$
33,307

$
—

$
—

$
33,307


 
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