-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EECymz8YX/7oK/lkH3wyG5LCpTCFU4hhlvoOXEUOJkoDbJcgJA1BBHOimI6wQiAq 5s0whWUPjgi501ly3vKhZA== 0000277595-99-000014.txt : 19990518 0000277595-99-000014.hdr.sgml : 19990518 ACCESSION NUMBER: 0000277595-99-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENERGEN CORP CENTRAL INDEX KEY: 0000277595 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 630757759 STATE OF INCORPORATION: AL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-07810 FILM NUMBER: 99626457 BUSINESS ADDRESS: STREET 1: 605 21ST STREET N CITY: BIRMINGHAM STATE: AL ZIP: 35203 BUSINESS PHONE: 2053262700 MAIL ADDRESS: STREET 1: 605 21ST STREET N CITY: BIRNINGHAM STATE: AL ZIP: 35203 FORMER COMPANY: FORMER CONFORMED NAME: ALAGASCO INC DATE OF NAME CHANGE: 19851002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALABAMA GAS CORP CENTRAL INDEX KEY: 0000003146 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 630022000 STATE OF INCORPORATION: AL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-70466 FILM NUMBER: 99626458 BUSINESS ADDRESS: STREET 1: 2101 SIXTH AVE NORTH CITY: BIRMINGHAM STATE: AL ZIP: 35203 BUSINESS PHONE: 2053262742 MAIL ADDRESS: STREET 1: 2101 SIXTH AVE NORTH CITY: BIRMINGHAM STATE: AL ZIP: 35203 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 1999 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___ TO ___ Commission IRS Employer File State of Identification Number Registrant Incorporation Number 1-7810 Energen Corporation Alabama 63-0757759 2-38960 Alabama Gas Corporation Alabama 63-0022000 605 21st Street North Birmingham, Alabama 35203 Telephone Number 205/326-2700 http://www.energen.com Alabama Gas Corporation, a wholly owned subsidiary of Energen Corporation, meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with reduced disclosure format pursuant to General Instruction H(2). Indicate by a check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. YES X NO ____ Indicate the number of shares outstanding of each of the issuers' classes of common stock, as of May 12, 1999: Energen Corporation, $0.01 par value 29,714,856 shares Alabama Gas Corporation, $0.01 par value 1,972,052 shares ENERGEN CORPORATION AND ALABAMA GAS CORPORATION FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1999 TABLE OF CONTENTS Page PART I: FINANCIAL INFORMATION (Unaudited) Item 1. Financial Statements (a) Consolidated Statements of Income of Energen Corporation 3 (b) Consolidated Balance Sheets of Energen Corporation 4 (c) Consolidated Statements of Cash Flows of Energen Corporation 6 (d) Statements of Income of Alabama Gas Corporation 7 (e) Balance Sheets of Alabama Gas Corporation 8 (e) Statements of Cash Flows of Alabama Gas Corporation 10 (g) Notes to Unaudited Financial Statements 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Selected Business Segment Data of Energen Corporation 20 Item 3. Quantitative and Qualitative Disclosures about Market Risk 21 PART II: OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 22 Item 6. Exhibits and Reports on Form 8-K 22 SIGNATURES 23 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF INCOME ENERGEN CORPORATION (Unaudited) Three months ended Six months ended (in thousands, March 31, March 31, except share data) 1999 1998 1999 1998 Operating Revenues Natural gas distribution $144,692 $161,747 $216,249 $257,502 Oil and gas production activities 43,698 36,226 86,109 66,359 Total operating revenues 188,390 197,973 302,358 323,861 Operating Expenses Cost of gas 59,915 80,299 86,578 131,046 Operations and maintenance 42,611 35,765 85,458 70,047 Depreciation, depletion and amortization 22,443 24,316 45,647 42,152 Taxes, other than income taxes 12,642 13,167 20,935 23,048 Total operating expenses 137,611 153,547 238,618 266,293 Operating Income 50,779 44,426 63,740 57,568 Other Income (Expense) Interest expense (9,330) (7,666) (19,205) (14,901) Other, net 36 507 514 1,325 Total other expense (9,294) (7,159) (18,691) (13,576) Income Before Income Taxes 41,485 37,267 45,049 43,992 Income tax benefit (884) (3,025) (1,162) (2,427) Net Income $42,369 $40,292 $46,211 $46,419 Basic Earnings Per Avg. Common Share $ 1.43 $ 1.39 $ 1.57 $ 1.60 Diluted Earnings Per Avg. Common Share $ 1.42 $ 1.37 $ 1.55 $ 1.59 Dividends Per Common Share $ 0.16 $0.155 $ 0.32 $ 0.31 Basic Avg. Common Shares Outstanding 29,589 29,027 29,511 28,956 The accompanying Notes are an integral part of these financial statements. 3 CONSOLIDATED BALANCE SHEETS ENERGEN CORPORATION March 31, 1999 September 30, 1998 (in thousands) (unaudited) ASSETS Current Assets Cash and cash equivalents $ 10,963 $103,231 Accounts receivable, net of allowance for doubtful accounts of $3,546 at March 31, 1999, and $3,547 at September 30, 1998 89,452 64,173 Inventories, at average cost Storage gas 15,701 21,237 Materials and supplies 7,802 8,670 Liquified natural gas in storage 3,117 3,381 Deferred gas cost 4,933 1,774 Deferred income taxes 14,004 12,569 Prepayments and other 6,295 3,418 Total current assets 152,267 218,453 Property, Plant and Equipment Oil and gas properties, successful efforts method 680,560 516,040 Less accumulated depreciation, depletion and amortization 125,853 88,306 Oil and gas properties, net 554,707 427,734 Utility plant 625,150 632,165 Less accumulated depreciation 320,980 307,488 Utility plant, net 304,170 324,677 Other property, net 3,546 3,933 Total property, plant and equipment, net 862,423 756,344 Other Assets Deferred income taxes 20,693 10,942 Deferred charges and other 7,443 7,716 Total other assets 28,136 18,658 TOTAL ASSETS $1,042,826 $993,455 The accompanying Notes are an integral part of these financial statements. 4 CONSOLIDATED BALANCE SHEETS ENERGEN CORPORATION (in thousands, March 31, 1999 September 30, 1998 except share data) (unaudited) CAPITAL AND LIABILITIES Current Liabilities Long-term debt due within one year $ 1,955 $ 7,209 Notes payable to banks 150,000 153,000 Accounts payable 31,060 33,533 Accrued taxes 23,825 21,255 Customers' deposits 17,582 16,344 Amounts due customers 10,143 12,070 Accrued wages and benefits 17,328 15,299 Other 39,043 25,531 Total current liabilities 290,936 284,241 Deferred Credits and other Liabilities Other 8,319 7,183 Total deferred credits and other liabilities 8,319 7,183 Commitments and Contingencies -- -- Capitalization Preferred stock, cumulative $0.01 par value, 5,000,000 shares authorized -- -- Common shareholders' equity Common stock, $0.01 par value; 75,000,000 shares authorized, 29,682,387 shares outstanding at March 31, 1999, and 29,326,597 shares outstanding at September 30, 1998 297 293 Premium on capital stock 201,892 195,874 Capital surplus 2,802 2,802 Retained earnings 167,048 130,280 Deferred compensation plan 743 873 Treasury stock, at cost (69,270 shares at March 31, 1999, and 49,096 shares at September 30, 1998) (1,031) (873) Total common shareholders' equity 371,751 329,249 Long-term debt 371,820 372,782 Total capitalization 743,571 702,031 TOTAL CAPITAL AND LIABILITIES $1,042,826 $ 993,455 The accompanying Notes are an integral part of these financial statements. 5 CONSOLIDATED STATEMENTS OF CASH FLOWS ENERGEN CORPORATION (Unaudited) Six months ended March 31, (in thousands) 1999 1998 Operating Activities Net income $46,211 $46,419 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation, depletion and amortization 45,647 42,152 Deferred income taxes, net (11,450) (15,231) Deferred investment tax credits, net (224) (234) Net change in: Accounts receivable (22,948) (13,392) Inventories 6,668 8,269 Deferred gas cost (3,159) (5,719) Accounts payable - gas purchases 4,907 4,380 Accounts payable - trade (7,380) (4,467) Other current assets and liabilities 14,141 10,792 Other, net (388) 62 Net cash provided by operating activities 72,025 73,031 Investing Activities Additions to property, plant and equipment (54,563) (110,612) Acquisition, net of cash acquired (123,816) -- Proceeds from sale of assets 27,000 -- Other, net 14 2,207 Net cash used in investing activities (151,365) (108,405) Financing Activities Payment of dividends on common stock (9,442) (8,980) Issuance of common stock 6,021 5,481 Purchase of treasury stock (288) -- Reduction of long-term debt (6,219) (870) Proceeds from issuance of long-term debt -- 98,541 Payment of note payable issued to purchase U.S. Treasury securities (100,571) (98,636) Net change in short-term debt 97,571 (57,364) Net cash used in financing activities (12,928) (61,828) Net change in cash and cash equivalents (92,268) (97,202) Cash and cash equivalents at beginning of period 103,231 105,402 Cash and Cash Equivalents at End of Period $10,963 $ 8,200 The accompanying Notes are an integral part of these financial statements. 6 STATEMENTS OF INCOME ALABAMA GAS CORPORATION (Unaudited) Three months ended Six months ended March 31, March 31, (in thousands) 1999 1998 1999 1998 Operating Revenues $144,692 $161,747 $216,249 $257,502 Operating Expenses Cost of gas 60,412 80,774 87,558 132,178 Operations and maintenance 24,808 23,493 49,803 48,494 Depreciation 6,605 6,232 13,193 12,429 Income taxes Current 17,371 18,874 18,393 21,022 Deferred, net (2,564) (4,820) (1,971) (5,747) Deferred investment tax credits, net (112) (117) (224) (234) Taxes, other than income taxes 10,014 10,918 15,760 18,170 Total operating expenses 116,534 135,354 182,512 226,312 Operating Income 28,158 26,393 33,737 31,190 Other Income (Expense) Allowance for funds used during construction 102 99 168 184 Other, net (386) 168 (483) 247 Total other income (expense) (284) 267 (315) 431 Interest Charges Interest on long-term debt 2,143 2,211 4,342 4,422 Other interest expense 533 503 1,027 1,071 Total interest charges 2,676 2,714 5,369 5,493 Net Income $25,198 $23,946 $28,053 $26,128 The accompanying Notes are an integral part of these financial statements. 7 BALANCE SHEETS ALABAMA GAS CORPORATION March 31, 1999 September 30, 1998 (in thousands) (unaudited) ASSETS Property, Plant and Equipment Utility plant $625,150 $632,165 Less accumulated depreciation 320,980 307,488 Utility plant, net 304,170 324,677 Other property, net 309 318 Current Assets Cash and cash equivalents 5,939 1,222 Accounts receivable Gas 48,642 32,191 Merchandise 1,967 2,362 Other 19,480 1,621 Allowance for doubtful accounts (3,482) (3,482) Inventories, at average cost Storage gas 15,701 21,237 Materials and supplies 5,476 5,533 Liquified natural gas in storage 3,117 3,381 Deferred gas cost 4,933 1,774 Deferred income taxes 11,354 10,470 Prepayments and other 4,568 2,112 Total current assets 117,695 78,421 Deferred Charges and Other Assets 4,275 4,733 TOTAL ASSETS $426,449 $408,149 The accompanying Notes are an integral part of these financial statements. 8 BALANCE SHEETS ALABAMA GAS CORPORATION (in thousands, March 31, 1999 September 30, 1998 except share data) (unaudited) CAPITAL AND LIABILITIES Capitalization Common shareholder's equity Common stock, $0.01 par value; 3,000,000 shares authorized, 1,972,052 shares outstanding at March 31, 1999, and September 30, 1998 $ 20 $ 20 Premium on capital stock 31,682 31,682 Capital surplus 2,802 2,802 Retained earnings 148,257 120,205 Total common shareholder's equity 182,761 154,709 Cumulative preferred stock, $0.01 par value, 120,000 shares authorized, issuable in series- $4.70 Series -- -- Long-term debt 119,650 119,650 Total capitalization 302,411 274,359 Current Liabilities Long-term debt due within one year -- 5,350 Notes payable to banks -- 15,000 Accounts payable Trade 24,644 23,217 Affiliated companies -- 2,738 Accrued taxes 28,737 19,428 Customers' deposits 17,582 16,344 Other amounts due customers 10,143 12,070 Accrued wages and benefits 8,600 4,217 Other 12,278 11,915 Total current liabilities 101,984 110,279 Deferred Credits and Other Liabilities Deferred income taxes 16,313 17,136 Accumulated deferred investment tax credits 2,437 2,661 Regulatory liability 2,516 2,910 Customer advances for construction and other 788 804 Total deferred credits and other liabilities 22,054 23,511 Commitments and Contingencies -- -- TOTAL CAPITAL AND LIABILITIES $426,449 $408,149 The accompanying Notes are an integral part of these financial statements. 9 STATEMENTS OF CASH FLOWS ALABAMA GAS CORPORATION (Unaudited) Six months ended March 31, (in thousands) 1999 1998 Operating Activities Net income $ 28,053 $26,128 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 13,193 12,429 Deferred income taxes, net (1,971) (5,747) Deferred investment tax credits (224) (234) Net change in: Accounts receivable (15,989) (17,567) Inventories 5,857 8,244 Deferred gas cost (3,159) (5,719) Accounts payable - gas purchases 4,907 4,380 Accounts payable - other trade (3,480) (815) Other current assets and liabilities 11,158 15,407 Other, net (104) 930 Net cash provided by operating activities 38,241 37,436 Investing Activities Additions to property, plant and equipment (19,632) (23,455) Net advances to affiliates (20,664) (6,776) Proceeds from sale of assets 27,000 -- Other, net 122 330 Net cash used in investing activities (13,174) (29,901) Financing Activities Payment of dividends on common stock -- (3,680) Net change in short-term debt (20,350) 1,000 Net cash used in financing activities (20,350) (2,680) Net change in cash and cash equivalents 4,717 4,855 Cash and cash equivalents at beginning of period 1,222 2,580 Cash and Cash Equivalents at End of Period $ 5,939 $ 7,435 The accompanying Notes are an integral part of these financial statements. 10 NOTES TO UNAUDITED FINANCIAL STATEMENTS ENERGEN CORPORATION AND ALABAMA GAS CORPORATION 1. BASIS OF PRESENTATION All adjustments to the unaudited financial statements which are, in the opinion of management, necessary for a fair statement of the results of operations for the interim periods have been recorded. Such adjustments consisted of normal recurring items and immaterial adjustments. The consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes for the years ended September 30, 1998, 1997, and 1996, included in the 1998 Annual Report of Energen Corporation (the Company) on Form 10-K. Certain reclassifications were made to conform prior years' financial statements to the current quarter presentation. The Company's natural gas distribution business is seasonal in character and influenced by weather conditions. Results of operations for the interim periods are not necessarily indicative of the results which may be expected for the fiscal year. 2. REGULATORY As an Alabama utility, Alabama Gas Corporation (Alagasco) is subject to regulation by the Alabama Public Service Commission (APSC) which, in 1983, established the Rate Stabilization and Equalization (RSE) rate-setting process. RSE was extended with modifications in 1985, 1987 and 1990. On October 7, 1996, RSE was extended, without change, for a five-year period through January 1, 2002. Under the terms of that extension, RSE will continue after January 1, 2002, unless, after notice to the Company and a hearing, the Commission votes to either modify or discontinue its operation. Under RSE as extended, the APSC conducts quarterly reviews to determine, based on Alagasco's projections and fiscal year-to-date performance, whether Alagasco's return on average equity for the fiscal year will be within the allowed range of 13.15 percent to 13.65 percent. Reductions in rates can be made quarterly to bring the projected return within the allowed range; however, increases are allowed only once each fiscal year, effective December 1, and cannot exceed 4 percent of prior-year revenues. RSE limits the utility's equity upon which a return is permitted to 60 percent of total capitalization, as measured as of the fiscal year end, and provides for certain cost control measures designed to monitor Alagasco's operations and maintenance (O&M) expense. If the change in O&M expense per customer falls within 1.25 percentage points above or below the Consumer Price Index For All Urban Customers (index range), no adjustment is required. If, however, the change in O&M expense per customer exceeds the index range, three-quarters of the difference is returned to customers. To the extent the change is less than the index range, the utility benefits by one-half of the difference through future rate adjustments. Under RSE as extended, a $6.6 million annual increase in revenue became effective December 1, 1998, an $11.8 million annual increase in revenue became effective December 1, 1997, and a $2.5 million annual decrease in revenue became effective July 1, 1998. Alagasco calculates a temperature adjustment to customers' bills to remove the effect of departures from normal temperatures on earnings The calculation is performed monthly, and the adjustments to customers' bills are made in the same billing cycle in which the weather variation occurs. Substantially all the customers to whom the temperature adjustment applies are residential, small commercial and small industrial. Alagasco's rate schedules for natural gas distribution charges contain a Gas Supply Adjustment (GSA) rider, established in 1993, which permits the pass-through to customers of changes in the cost of gas supply. The APSC approved an Enhanced Stability Reserve (ESR), beginning fiscal year 1998, to which Alagasco may charge the full amount of: (1) extraordinary O&M expenses resulting from force majeure events such as storms, severe weather, and outages, when one or a combination of two such events results in more than $200,000 of additional O&M expense during a fiscal year or (2) individual industrial and commercial customer revenue losses that exceed $250,000 during the fiscal year, if such losses cause Alagasco's return on equity to fall below 13.15 percent. The APSC approved the reserve on October 6, 1998, in the amount of $3.9 million; the maximum approved funding level of the ESR is $4 million. The APSC provides for accretions to the ESR in an amount of no more than $40,000 monthly following a year in which a charge against the ESR is made until the maximum funding level is achieved. The APSC will re-evaluate the operation of the ESR following the conclusion of Alagasco's fiscal year 2000. In accordance with APSC-directed regulatory accounting procedures, Alagasco in 1989 began returning to customers excess utility deferred taxes which resulted from a reduction in the federal statutory tax rate from 46 percent to 34 percent using the average rate assumption method. This method provides for the return to ratepayers of excess deferred taxes over the lives of the related assets. In 1993 those excess taxes were reduced as a result of a federal tax rate increase from 34 percent to 35 percent. Remaining excess utility deferred taxes of $1.8 million are being returned to ratepayers over approximately 12 years. At March 31, 1999, and September 30, 1998, a regulatory liability related to income taxes of $2.5 million and $2.9 million, respectively, was included in the consolidated financial statements. As of November 1, 1998, Alagasco offered a Voluntary Early Retirement Program to certain eligible employees. At March 31, 1999, a regulatory asset of $3.0 million for costs associated with this early retirement program is included in the consolidated financial statements. The APSC has allowed these costs to be amortized over a three-year period. 3. DERIVATIVE COMMODITY INSTRUMENTS Energen Resources periodically enters into derivative commodity instruments to hedge its exposure to price fluctuations on oil and gas production. Such instruments include regulated natural gas and crude oil futures contracts traded on the New York Mercantile Exchange and over-the-counter swaps and basis hedges with major energy derivative product specialists. These transactions are accounted for under the hedge method of accounting. Under this method, any unrealized gains and losses are recorded as a current receivable/payable and a deferred gain/loss. Realized gains and losses are deferred as current liabilities or assets until the revenues from the related hedged volumes are recognized in the income statement. Cash flows from derivative instruments are recognized as incurred through changes in working capital. The Company had deferred gains of $3.0 million and $0.6 million on the balance sheet at March 31, 1999, and September 30, 1998, respectively. At March 31, 1999, Energen Resources had entered into contracts and swaps for 23.5 Bcf of its remaining estimated 1999 flowing gas production at an average contract price of $2.18 per Mcf and for 1,180 MBbl of its remaining estimated flowing oil production at an average contract price of $14.66 per barrel. Fiscal year 2000 contracts and swaps were in place for 4.5 Bcf of flowing gas production at an average contract price of $2.22 per Mcf and for 180 MBbl of flowing oil production at an average contract price of $17.31 per barrel. Realized prices are anticipated to be lower than hedged prices due to basis differences and other factors. To help mitigate this variance, the Company has hedged the basis difference on 5.4 Bcf of its remaining 1999 San Juan Basin production. Subsequent to March 31, 1999, Energen Resources entered into additional contracts and swaps for fiscal year 2000 resulting in a total of 34 Bcf of flowing gas production hedged at an average contract price of $2.38 per Mcf and 860 MBbl of flowing oil production at an average contract price of $16.74 per barrel. All hedge transactions are subject to the Company's risk management policy, approved by the Board of Directors, which does not permit speculative positions. To apply the hedge method of accounting, management must demonstrate that a high correlation exists between the value of the derivative commodity instrument and the value of the item hedged. Management uses the historic relationships between the derivative instruments and the sales prices of the hedged volumes to ensure that a high level of correlation exists. 4. ACCOUNTING FOR LONG-LIVED ASSETS SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long- Lived Assets to be Disposed Of, requires that an impairment loss be recognized when the carrying amount of an asset exceeds the sum of the undiscounted estimated future cash flow of the asset. The Statement also provides that all long-lived assets to be disposed of be reported at the lower of the carrying amount or fair value. Accordingly, during the second fiscal quarter of 1998, Energen Resources recorded a pre-tax writedown of $4.7 million as additional depreciation, depletion and amortization expense on certain oil and gas properties, adjusting the carrying amount of the properties to their fair value based upon expected future discounted cash flows. This writedown primarily reflected the impact of declined crude oil prices. 5. RECENT PRONOUNCEMENTS OF THE FASB The FASB issued SFAS No. 130, Reporting Comprehensive Income, in June 1997, which requires the reporting and display of comprehensive income and its components in an entity's financial statements. There currently are no differences between the Company's net income and comprehensive income. In February 1998, the FASB issued SFAS No. 132, Employers' Disclosures about Pensions and Other Postretirement Benefits, which revises employers' disclosures about pension and other postretirement benefit plans. As this pronouncement relates solely to disclosure provisions, there will be no effect on the results of operations or financial position of the Company. The Company is required to adopt these statements in fiscal year 1999. In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, which establishes accounting and reporting standards for derivative instruments. The Company is required to adopt this statement in fiscal year 2000. The impact of this pronouncement on the Company currently is being evaluated. 6. ACQUISITION OF TOTAL MINATOME CORPORATION On October 15, 1998, Energen Resources purchased the stock of the TOTAL Minatome Corporation (TOTAL), a Houston-based unit of TOTAL American Holding Inc. Immediately upon closing the transaction, Energen Resources sold a 31 percent undivided interest in TOTAL's net assets to Westport Oil and Gas Company Inc. Energen Resources' net adjusted price totaled approximately $134 million, including the assumption of certain legal and financial obligations. Energen Resources gained an estimated 200 Bcf equivalent of proved domestic oil and natural gas reserves. The acquisition was accounted for as a purchase, and the results of operations since the acquisition date are included in the consolidated financial statements. A summary of net assets acquired is as follows: (in thousands) Oil and gas properties $ 134,110 Less liabilities assumed (9,865) Less cash acquired (429) Acquisition cost, net of cash acquired $ 123,816 Summarized below are the consolidated results of operations for the six months ended March 31, 1999 and 1998, on an unaudited pro forma basis, as if the TOTAL acquisition had been made on October 1, 1997. The pro forma financial information is based on the Company's consolidated results of operations for the six months ended March 31, 1999 and 1998, and on data provided by TOTAL after giving effect to certain pro forma adjustments. The pro forma financial information does not purport to be indicative of results of operations that would have occurred had the transactions occurred on the basis assumed above nor are they indicative of results of the future operations of the combined enterprises. Six months ended March 31, (in thousands) (unaudited) 1999 1998 Operating revenues $302,358 $365,229 Net income $ 46,211 $ 48,053 Basic Earnings Per Average Common Share $ 1.57 $ 1.66 Diluted Earnings Per Average Common Share $ 1.55 $ 1.64 7. RECONCILIATION OF EARNINGS PER SHARE (in thousands, Three months ended Three months ended except per share amounts) March 31, 1999 March 31, 1998 Per Share Per Share Income Shares Amount Income Shares Amount Basic EPS $42,369 29,589 $1.43 $40,292 29,027 $1.39 Effect of Dilutive Securities Long-range performance shares 150 121 Non-qualified stock options 131 212 Diluted EPS $42,369 29,870 $1.42 $40,292 29,360 $1.37 (in thousands, Six months ended Six months ended except per share amounts) March 31, 1999 March 31, 1998 Per Share Per Share Income Shares Amount Income Shares Amount Basic EPS $46,211 29,511 $1.57 $46,419 28,956 $1.60 Effect of Dilutive Securities Long-range performance shares 155 115 Non-qualified stock options 144 191 Diluted EPS $46,211 29,810 $1.55 $46,419 29,262 $1.59 8. SEGMENT INFORMATION Effective September 30, 1998, the Company adopted SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information. The Company is principally engaged in two business segments: the purchase, distribution and sale of natural gas in central and north Alabama (natural gas distribution) and the acquisition, development, exploration and production of oil and gas in the continental United States (oil and gas activities). Three months ended Six months ended March 31, March 31, (in thousands) 1999 1998 1999 1998 Operating revenues Natural gas distribution $144,692 $161,747 $216,249 $257,502 Oil and gas activities 43,698 36,226 86,109 66,359 Total $188,390 $197,973 $302,358 $323,861 Operating income (loss) Natural gas distribution $ 42,853 $ 40,330 $ 49,935 $ 46,231 Oil and gas activities 7,875 4,343 14,071 11,884 Eliminations and corporate expenses 51 (247) (266) (547) Total $ 50,779 $ 44,426 $ 63,740 $ 57,568 Identifiable assets Natural gas distribution $426,449 $426,946 $426,449 $426,946 Oil and gas activities 642,466 501,480 642,466 501,480 Eliminations and other (26,089) (13,861) (26,089) (13,861) Total $1,042,826 $914,565 $1,042,826 $914,565 14 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Energen's net income for the three months ended March 31, 1999, totaled $42.4 million ($1.42 per diluted share) and compared favorably to net income of $40.3 million ($1.37 per diluted share) recorded in the same period last year. Energen Resources Corporation, Energen's oil and gas subsidiary, realized net income of $16.9 million in the second fiscal quarter as compared with $16.4 million in the same period last year. Increased production-related income largely was offset by significantly lower realized oil and natural gas liquids prices and moderately lower realized gas prices. Adversely affecting income were increased interest expense as well as increased administrative expense associated with the first quarter acquisition of TOTAL Minatome Corporation (TOTAL). In the prior-year period, Energen Resources recorded a $3.0 million after-tax writedown on certain oil and gas properties. Alagasco, Energen's natural gas utility, reported net income of $25.2 million in the current quarter; this $1.25 million increase from the same period last year primarily reflects the utility's ability to earn within its allowed range of return on an increased level of equity representing investment in utility plant. For the 1999 fiscal year-to-date, Energen's net income totaled $46.2 million ($1.55 per diluted share) compared with $46.4 million ($1.59 per diluted share) for the same period in the prior year. Energen Resources' net income totaled $17.9 million as compared with $20.2 million for the first six months of fiscal 1998. Alagasco's earnings increased $1.9 million to $28.1 million. Major factors contributing to Energen Resources' and Alagasco's financial results were the same as those for the second fiscal quarter. Natural Gas Distribution Natural gas distribution revenues decreased $17.1 million in a quarter-to- quarter comparison and $41.3 million on a year-to-date basis. This primarily was due to decreased sales volumes resulting from weather which was significantly warmer than in the prior periods as well as decreased gas prices. Alagasco's rate schedules for natural gas distribution charges contain a Gas Supply Adjustment rider, established in 1993, which permits the pass-through to customers of changes in the cost of gas supply. For the quarter, weather that was 16.5 percent warmer than the same period last year contributed to a 15.6 percent decrease in residential sales volumes and a 5.2 percent decrease in commercial and industrial sales volumes. For the year-to-date, weather that was 28.7 percent warmer than the same period last year contributed to a 23.7 percent decrease in residential sales volumes and an 8.8 percent decrease in commercial and industrial sales volumes. Decreased gas purchase volumes and prices also contributed to a 25.2 percent decrease in cost of gas for the quarter and a 33.8 percent decrease year-to-date. Alagasco calculates a temperature adjustment to certain customers' bills on a real-time basis to substantially remove the effect of departures from normal temperature on Alagasco's earnings. The customers to whom the temperature adjustment applies are primarily residential, small commercial and small industrial. As discussed more fully in Note 2, Alagasco is subject to regulation by the APSC. On October 7, 1996, the APSC issued an order extending the Company's current rate-setting mechanism through January 1, 2002. Under the terms of that extension, RSE will continue after January 1, 2002, unless, after notice to the Company and a hearing, the Commission votes to either modify or discontinue its operation. Operations and maintenance expense increased slightly in both the current quarter and year-to-date periods. Increases in labor and related costs, primarily due to a one-time, prior-year change in the salaried employee vacation policy, and increases due to Year 2000 related costs were substantially offset by decreased general liability insurance expense. The labor savings in the quarter and year-to-date comparisons from the Voluntary Early Retirement Program effective November 1, 1998, primarily were offset by the amortization of the costs associated with this program. A slight increase in depreciation expense for the quarter and year-to-date comparisons primarily was due to normal growth of the utility's distribution system. Taxes other than income primarily reflect various state and local business taxes as well as payroll-related taxes. State and local business taxes are generally based on gross receipts and fluctuate accordingly. Oil and Gas Activities Revenues from oil and gas production activities rose 20.6 percent to $43.7 million for the three months ended March 31, 1999, and 29.8 percent to $86.1 million for the year-to-date, primarily reflecting Energen Resources' current- and prior-year property acquisitions. Natural gas comprised approximately 71 percent of Energen Resources' production for both the current quarter and the year-to-date. In the second fiscal quarter, natural gas production increased 29.6 percent to 14.2 Bcf and oil volumes more than doubled to 853 MBbl. For the year-to-date, natural gas production increased 34.9 percent to 28.7 Bcf and oil volumes increased 163.5 percent to 1,634 MBbl. In addition, Energen Resources' high BTU-content natural gas reserves in the San Juan Basin yielded 130 MBbl and 288 MBbl in natural gas liquids in the current quarter and in the year-to-date, respectively. The impact of higher production largely was offset by slightly lower realized natural gas prices and significantly lower realized oil prices than in the same periods last year. For the quarter, realized gas prices decreased 4.5 percent to $2.32 per Mcf. Realized oil prices decreased 36.4 percent to $10.43 per barrel. For the year-to-date, realized gas prices decreased 3.4 percent to $2.24 per Mcf, while realized oil prices decreased 33.4 percent to $11.13 per barrel. Natural gas liquids prices decreased 25 percent to an average price of $7.54 per barrel for the quarter and 24.6 percent to an average price of $7.34 per barrel for the year-to-date. Energen Resources enters into derivative commodity instruments to hedge its exposure to the impact of price fluctuations on oil and gas production. Such instruments include regulated natural gas and crude oil futures contracts traded on the New York Mercantile Exchange and over-the-counter swaps and basis hedges with major energy derivative product specialists. All hedge transactions are subject to the Company's risk management policy, approved by the Board of Directors, which does not permit speculative positions. At March 31, 1999, Energen Resources had entered into contracts and swaps for 23.5 Bcf of its remaining estimated 1999 flowing gas production at an average contract price of $2.18 per Mcf and for 1,180 MBbl of its remaining estimated flowing oil production at an average contract price of $14.66 per barrel. Fiscal year 2000 contracts and swaps were in place for 4.5 Bcf of flowing gas production at an average contract price of $2.22 per Mcf and for 180 MBbl of flowing oil production at an average contract price of $17.31 per barrel. Realized prices are anticipated to be lower than hedged prices due to basis differences and other factors. To help mitigate this variance, the Company has hedged the basis difference on 5.4 Bcf of its remaining 1999 San Juan Basin production. Subsequent to March 31, 1999, Energen Resources entered into additional contracts and swaps for fiscal year 2000 resulting in a total of 34 Bcf of flowing gas production hedged at an average contract price of $2.38 per Mcf and 860 MBbl of flowing oil production at an average contract price of $16.74 per barrel. O&M expense increased $5.8 million for the quarter and $14.4 million in the current year-to-date primarily due to significant production growth and acquisition activity at Energen Resources. Lease operating expenses rose by $5.3 million for the quarter and $10.9 million for the year-to-date due to the acquisition of oil and gas properties. Exploration expense decreased $0.7 million for the quarter but was higher by $0.6 million for the year-to-date primarily due to the timing of exploratory efforts and drilling activity associated with certain properties. A $2.1 million decrease in depreciation, depletion and amortization (DD&A) for the quarter resulted primarily from a SFAS No. 121 pre-tax writedown of $4.7 million on certain oil and gas properties in the second quarter of the prior- year, partially offset by increases due to higher production volumes in the current quarter. For the year-to-date, Energen Resources' significantly higher production volumes more than offset the effect of the prior-year writedown resulting in a $2.9 million increase in DD&A. The average depletion rate for the quarter decreased to $0.78 as compared to $0.91, excluding the effect of the writedown, for the same period last year, due primarily to trading certain offshore properties in the fourth quarter of fiscal 1998 for onshore properties which had lower depletion rates. For the year-to-date, the average depletion rate was $0.79 as compared to $0.89 in the prior fiscal period. Energen Resources' expense for taxes other than income taxes primarily reflects production-related taxes which were $0.5 million higher this quarter and $1.6 million for the year-to-date as a result of increased production. Non-Operating Items Interest expense for the Company increased $1.7 million in the quarter and $4.3 million year-to-date. Influencing the increase in interest expense for the current period is $100 million of medium-term notes (MTNs) issued in February 1998 in connection with the growth at Energen Resources. The Company also significantly increased its average borrowings under its short-term credit facilities for the same purpose. The Company's effective tax rates are lower than statutory federal tax rates primarily due to the recognition of nonconventional fuels tax credits and the amortization of investment tax credits. Nonconventional fuels tax credits are generated annually on qualified production through December 31, 2002. These credits are expected to be recognized fully in the financial statements, and effective tax rates are expected to continue to remain lower than statutory federal rates through fiscal year 2003. Income tax expense increased in the current quarter and year-to-date as a result of higher consolidated pretax income and slightly decreased recognition of nonconventional fuels tax credits on an interim basis. FINANCIAL POSITION AND LIQUIDITY Cash flow from operations for the current year-to-date was $72 million and remained relatively stable compared to the same period in the prior year. Changes in working capital items, which are highly influenced by throughput, oil and gas production volumes and timing of payments offset each other in the current period. The Company had a net investment of $151.4 million through the six months ended March 31, 1999, primarily in the addition of property, plant and equipment slightly offset by the proceeds from the sale and leaseback of the headquarters building. Energen Resources invested $158.7 million in capital expenditures year-to-date related to the acquisition and development of oil and gas properties. In October 1998, Energen Resources acquired the stock of TOTAL and, immediately upon closing, sold a 31 percent interest in TOTAL's net assets to Westport Oil and Gas Company Inc. Energen Resources' net adjusted purchase price totaled approximately $134 million, including the assumption of certain legal and financial obligations. Utility capital expenditures totaled $19.6 million and represented primarily normal system distribution expansion and support facilities. The Company used $12.9 million for financing activities in the first half of fiscal 1999. For tax planning purposes, the Company borrowed $100.6 million in September 1998 to invest in short-term federal obligations. The Treasuries matured in early October 1998 and the proceeds were used to repay the debt. Increased borrowings under Energen's short-term credit facilities were used to finance Energen Resources' acquisition strategy. FUTURE CAPITAL RESOURCES AND LIQUIDITY The Company plans to continue to implement its diversified growth strategy which calls for Energen Resources to invest approximately $1 billion in the acquisition and development of producing properties and in exploration and related development over the five-year period ending September 30, 2003. In fiscal year 1999, Energen Resources plans to spend approximately $197 million, including an approximate $134 million net adjusted purchase price for the TOTAL property acquisition and $63 million for development of current- and prior-year property acquisitions. Energen Resources' continued ability to invest in property acquisitions will be influenced significantly by industry trends as the producing property acquisition market has historically been cyclical. From time to time, Energen Resources also may be engaged in negotiations to sell, trade or otherwise dispose of previously acquired property. For the current year, Energen Resources may divest of certain non-strategic properties. To finance Energen Resources' investment program, the Company will continue to utilize its short-term credit facilities to supplement internally generated cash flow, with long-term debt and equity providing permanent financing. In December 1997, Energen filed a $400 million shelf registration for debt and common stock. Under that registration, Energen issued $100 million of Series B MTNs in February 1998, the proceeds from which were used to repay short-term debt. During this fiscal quarter, Energen increased its available short-term credit facilities to $249 million to accommodate its growth plans. Energen plans to issue common equity in fiscal year 2000 to assist in financing investing activity. Utility capital expenditures for normal distribution system renewals and expansion plus support facilities could approximate $47 million in fiscal 1999. Alagasco also will maintain an investment in storage working gas which is expected to average approximately $21 million in 1999. The utility anticipates funding these capital requirements through internally generated capital and the utilization of short-term credit facilities. The Company completed the sale and leaseback of its new headquarters building in January 1999; the proceeds approximated the investment in the facility. Year 2000 Readiness Disclosures Year 2000 issues result from computer applications that use only two-digit representations to refer to a year. Many computer applications could fail or create erroneous results if Year 2000 issues are not properly addressed. Energen has evaluated and continues to evaluate its computer software and hardware to assess the need for modifications for the Year 2000. Over the past three years, the Company has made a substantial investment in software and computer infrastructure and non-information technology systems that either comply with Year 2000 requirements or can be upgraded. A full-time senior management-level position was established and a primary contractor was selected in 1996 to address the Year 2000 issue. The plan of work established involves the following phases: inventory, assessment, testing, certification and change control. A number of inventory reviews have been completed and will continue to be updated in the future. Tools to test, age and evaluate data software and hardware have been purchased and installed and are being utilized for Year 2000 compliance. Test plans for items identified as critical systems either are being deployed or currently developed. Testing and remediating high priority systems and devices are scheduled for completion by September 30, 1999. A third-party assessment of Year 2000 readiness was conducted by an outside entity for both information technology and non-information technology systems as of December 1, 1998, and indicated that mission-critical functions including the flow of gas into homes and commercial accounts are not likely to be impacted by the Year 2000 changeover. In response to the independent assessment, several program changes have been implemented. A steering committee of the Company's executive management has and will continue to review the millennium project progress on a regular basis. With respect to material third-party relationships, the Company, in addition to responding to questions concerning Year 2000 issues from customers and regulators, is requesting information from certain vendors and partners designed to determine their ability to continue uninterrupted supply of materials or services to the Company. This process is scheduled for completion during the third fiscal quarter of 1999. As of March 31, 1999, the Company has incurred approximately $1.1million of Year 2000 related costs to date, which are being expensed as incurred. The Company's Year 2000 remediation is expected to be completed by the end of calendar year 1999 with an estimated total cost of $2.3 million. The Company is developing and implementing Year 2000 readiness procedures to minimize the risks identified to date, including what it believes are worst case scenarios of reduced gas deliverability into the Alagasco distribution system, production failures on Energen Resources properties, or failures of gathering and pipeline systems to accept Energen Resources production. Specific Year 2000 contingency plans are scheduled to be incorporated into the previously established Energen Business Resumption Plan during fiscal year 1999. The Company's contingency plan identifies alternate recovery locations and contact lists, as well as special resource requirements. The Company's goal is that Year 2000 issues will be addressed on a schedule and in a manner that will prevent such issues from having a material effect on the Company's results of operations, liquidity or financial condition. While the Company has and will be pursuing Year 2000 compliance, there can be no assurance that the Company and its vendors will be successful in identifying and addressing all material Year 2000 issues. This document contains Year 2000 Readiness Disclosures as defined in the Year 2000 Information and Readiness Disclosure Act, P.L.105-271 (October 19, 1998). Accordingly, this disclosure, in whole or in part, is not, to the extent provided in the act, admissible in any state or federal civil action to prove the accuracy or truth of any Year 2000 statements contained herein. Forward-Looking Statements and Risks Certain statements in this report, including statements of future plans, objectives and expected performance of the Company and its subsidiaries, are forward-looking statements that are dependent on certain events, risks and uncertainties that may be outside the Company's control which could cause actual results to differ materially from those anticipated. Some of these include, but are not limited to, economic and competitive conditions, inflation rates, legislative and regulatory changes, financial market conditions, future business decisions, Year 2000 issues, and other uncertainties, all of which are difficult to predict. There are numerous uncertainties inherent in estimating quantities of proved oil and gas reserves and in projecting future rates of production and timing of development expenditures. The total amount or timing of actual future production may vary significantly from reserves and production estimates. In the event Energen Resources is unable to invest fully its planned acquisition, development and exploratory expenditures, future operating revenues, production and proved reserves could be negatively affected. The drilling of development and exploratory wells can involve significant risk including that related to timing, success rates and cost overruns. These risks can be affected by lease and rig availability, complex geology and other factors. Although Energen Resources makes use of futures, swaps and fixed price contracts to mitigate risk, fluctuations in future oil and gas prices could materially affect the Company's financial position and results of operations and, furthermore, such risk mitigation activities may cause the Company's financial position and results of operations to be materially different from results which would have been obtained had such risk mitigation activities not occurred. OTHER Recent Pronouncements of the FASB The FASB issued SFAS No. 130, Reporting Comprehensive Income, in June 1997, which requires the reporting and display of comprehensive income and its components in an entity's financial statements. There currently are no differences between the Company's net income and comprehensive income. In February 1998, the FASB issued SFAS No. 132, Employers' Disclosures about Pensions and Other Postretirement Benefits, which revises employers' disclosures about pension and other postretirement benefit plans. As this pronouncement relates solely to disclosure provisions, there will be no effect on the results of operations or financial position of the Company. The Company is required to adopt these statements in fiscal year 1999. In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, which establishes accounting and reporting standards for derivative instruments. The Company is required to adopt this statement in fiscal year 2000. The impact of this pronouncement on the Company currently is being evaluated. 19 SELECTED BUSINESS SEGMENT DATA ENERGEN CORPORATION (Unaudited) Three months ended Six months ended (in thousands, March 31, March 31, except sales price data) 1999 1998 1999 1998 Natural Gas Distribution Operating revenues Residential $99,217 $113,197 $144,564 $175,575 Commercial and industrial - small 34,184 39,713 50,837 63,207 Transportation 10,533 10,495 19,086 19,852 Other 758 (1,658) 1,762 (1,132) Total $144,692 $161,747 $216,249 $257,502 Gas delivery volumes (MMcf) Residential 13,526 16,023 18,204 23,856 Commercial and industrial - small 5,317 6,219 7,733 9,675 Transportation 15,879 16,143 30,759 32,518 Total 34,722 38,385 56,696 66,049 Other data Depreciation and amortization $6,605 $ 6,232 $ 13,193 $ 12,429 Capital expenditures $9,325 $15,066 $ 19,632 $ 23,380 Operating income $42,853 $40,330 $ 49,935 $ 46,231 Oil and Gas Activities Operating revenues Natural gas $33,050 $26,652 $64,427 $49,441 Oil 8,889 5,922 18,195 10,367 Natural gas liquids 980 1,953 2,116 3,602 Other 779 1,699 1,371 2,949 Total $43,698 $36,226 $86,109 $66,359 Sales volume Natural gas (MMcf) 14,220 10,973 28,713 21,277 Oil (MBbl) 853 361 1,634 620 Natural gas liquids (MBbl) 130 194 288 370 Average sales price Natural gas (Mcf) $2.32 $2.43 $2.24 $ 2.32 Oil (barrel) $10.43 $16.41 $11.13 $16.72 Natural gas liquids (barrel) $ 7.54 10.06 $ 7.34 9.74 Other data Depreciation, depletion and amortization $15,838 $18,084 $ 32,454 $29,723 Capital expenditures $10,757 $27,135 $158,747 $87,494 Exploration expenditures $ 713 $ 1,367 $ 2,089 $ 1,490 Operating income $ 7,875 $ 4,343 $ 14,071 $11,884 20 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Energen Resources' major market risk exposure is in the pricing applicable to its oil and gas production. Historically, prices received for oil and gas production have been volatile because of seasonal weather patterns, world and national supply-and-demand factors and general economic conditions. Crude oil prices also are affected by quality differentials, by worldwide political developments and by actions of the Organization of Petroleum Exporting Countries. Basis differentials, like the underlying commodity prices, can be volatile because of regional supply-and-demand factors, including seasonal factors and the availability and price of transportation to consuming areas. Energen Resources enters into derivative commodity instruments to hedge its exposure to the impact of price fluctuations on oil and gas production. Such instruments include regulated natural gas and crude oil futures contracts traded on the New York Mercantile Exchange and over-the-counter swaps and basis hedges with major energy derivative product specialists. All hedge transactions are subject to the Company's risk management policy, approved by the Board of Directors, which does not permit speculative positions. These transactions are accounted for under the hedge method of accounting. Under this method, any unrealized gains and losses are recorded as a current receivable/payable and a deferred gain/loss. Realized gains and losses are deferred as current liabilities or assets until the revenues from the related hedged volumes are recognized in the income statement. Cash flows from derivative instruments are recognized as incurred through changes in working capital. The Company had deferred gains of $3.0 million and $0.6 million on the balance sheet at March 31, 1999, and September 30, 1998, respectively. 21 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Information with respect to the annual meeting of Shareholders held January 27, 1999, is reported in Item 4 of Energen Corporation 10-Q for the three months ended December 31, 1998. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits 27.1 Financial data schedule of Energen Corporation (for SEC purposes only) 27.2 Financial data schedule of Alabama Gas Corporation (for SEC purposes only) b. Reports on Form 8-K No reports on Form 8-K were filed for the three months ended March 31, 1999. 22 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ENERGEN CORPORATION ALABAMA GAS CORPORATION May 12, 1999 By /s/ Wm. Michael Warren, Jr. Wm. Michael Warren, Jr. Chairman, President and Chief Executive Officer of Energen, Chairman and Chief Executive Officer of Alabama Gas Corporation May 12, 1999 By /s/ G. C. Ketcham G. C. Ketcham Executive Vice President, Chief Financial Officer and Treasurer of Energen and Alabama Gas Corporation May 12, 1999 By /s/ Grace B. Carr Grace B. Carr Controller of Energen May 12, 1999 By /s/ Paula H. Rushing Paula H. Rushing Vice President-Finance of Alabama Gas Corporation 23 EX-27.1 2 FDS FOR ENERGEN CORPORATION
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF ENERGEN CORPORATION FOR THE SIX MONTHS ENDED MARCH 31, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000277595 ENERGEN CORPORATION 1,000 6-MOS SEP-30-1999 MAR-31-1999 PER-BOOK 304,170 558,253 152,267 19,239 0 1,033,929 297 204,694 167,048 371,751 0 0 371,820 150,000 0 0 1,955 0 0 0 138,403 1,033,929 302,358 (1,162) 238,618 237,456 63,740 (18,691) 65,416 19,205 46,211 0 46,211 9,442 13,694 72,025 1.57 1.55
EX-27.2 3 FDS FOR ALABAMA GAS CORPORATION
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF ALABAMA GAS CORPORATION FOR THE SIX MONTHS ENDED MARCH 31, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000003146 ALABAMA GAS CORPORATION 1,000 6-MOS SEP-30-1999 MAR-31-1999 PER-BOOK 304,170 309 117,695 4,275 0 426,449 20 34,484 148,257 182,761 0 0 119,650 0 0 0 0 0 0 0 124,038 426,449 216,249 16,198 166,314 182,512 33,737 (315) 33,422 5,369 28,053 0 28,053 0 4,342 38,241 0. 0. ALABAMA GAS CORPORATION (ALAGASCO) IS A SUBSIDIARY OF ENERGEN CORPORATION. EARNINGS PER SHARE IS NOT CALCULATED FOR ALAGASCO AS AMOUNT WOULD NOT BE MEANINGFUL.
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