8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report

April 25, 2007

Commission File Number	Registrant	State of Incorporation	IRS Employer Identification Number
1-7810	Energen Corporation	Alabama	63-0757759
2-38960	Alabama Gas Corporation	Alabama	63-0022000

605 Richard Arrington Jr. Boulevard North Birmingham, Alabama	35203
(Address of principal executive offices)	(Zip Code)

(205) 326-2700

(Registrant’s telephone number including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 Results of Operations and Financial Condition

On April 25, 2007, Energen Corporation and Alabama Gas Corporation issued a press release announcing the first quarter and year-to-date 2007 financial results. The press release and supplemental financial information are attached hereto as Exhibit 99.1 and 99.2.

ITEM 7.01 Regulation FD Disclosure

Energen Corporation has included a reconciliation of certain Non-GAAP financial measures to the related GAAP financial measures. These Non-GAAP financial measures were disclosed at the Company’s Annual Meeting of Shareholders held on April 25, 2007. A slide presentation containing the meeting material will be available April 25, 2007, on the Company’s web site: www.energen.com. The reconciliation is attached hereto as exhibit 99.3.

ITEM 9.01 Financial Statements and Exhibits

(c) Exhibits.

The following exhibits are furnished as part of this Current Report on Form 8-K.

Exhibit Number:	Description
99.1	Press Release dated April 25, 2007
99.2	Supplemental Financial Information
99.3	Non-GAAP Financial Measures Reconciliation

SIGNATURES

Pursuant to the requirements of the Securities 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
April 25, 2007	By:	/s/    Charles W. Porter, Jr.
		Charles W. Porter, Jr.
		Vice President, Chief Financial Officer and Treasurer of Energen Corporation and Alabama Gas Corporation

EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION
99.1*	Press Release dated April 25, 2007
99.2*	Supplemental Financial Information
99.3*	Non-GAAP Financial Measures Reconciliation

* This exhibit is furnished to, but not filed with, the Commission by inclusion herein.

EX-99.1

EXHIBIT 99.1:

For Immediate Release:	Contacts:
Wednesday, April 25, 2007	Julie S. Ryland,      205.326.8421

Oil & Gas Operations Continue to Drive Energen’s Earnings Growth

Company Reaffirms 2007 Guidance; Initiates 2008 Guidance

BIRMINGHAM, Alabama – Energen Corporation (NYSE: EGN) announced at today’s Annual Meeting of Shareholders that its 19 percent increase in year-over-year first quarter net income indicates that the diversified energy company is on track to achieve its sixth consecutive year of record earnings in 2007. Energen’s net income in the first quarter of 2007 totaled $103.9 million, or $1.44 per diluted share.

“We are very pleased with the results we are generating, and we are excited about our prospects for the future,” Mike Warren, Energen’s chairman and chief executive officer, told shareholders at the energy company’s Birmingham headquarters.

“By accelerating the development of our proved undeveloped reserves and our probable and possible inventory beginning this year, we believe we can achieve organic production growth in 2008 of approximately 3 percent. In 2009, we could well see production in excess of 100 billion cubic feet equivalent.

“Meanwhile, we continue to build our acreage position in Alabama in anticipation of exploring our state’s extensive shale potential,” Warren added.

In other developments announced today:

• Energen reaffirmed its 2007 earnings guidance range of $3.80-$4.20 per diluted share.

• Energen initiated 2008 earnings guidance with a range of $3.60-$4.00 per diluted share, reflecting the potential impact of lower realized commodity prices partially offset by increased production.

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• Energen’s oil and gas subsidiary, Energen Resources Corporation, has increased its net lease position in Alabama shales to approximately 180,000 acres.

• Energen Resources’ review of its unproved reserve inventory again supported 1.9 trillion cubic feet equivalent (Tcfe) of probable and possible reserves.

First Quarter 2007 Results

For the three months ended March 31, 2007, Energen’s net income totaled $103.9 million, or $1.44 per diluted share, and compares with first quarter 2006 net income of $87.5 million, or $1.18 per diluted share. This 22 percent increase in earnings per share (EPS) largely reflects the impact of the Company’s strong hedge position on the average prices realized for Energen Resources’ first quarter 2007 production.

Energen Resources Corporation

Energen Resources’ net income for the first three months of 2007 totaled $63.2 million as compared with $49.7 million in the same period last year. Discontinued operations in both periods were immaterial. In addition to increased average realized prices, Energen Resources benefited from a 0.6 billion cubic feet equivalent (Bcfe) increase in period-over-period production to 23.8 Bcfe.

Average Realized Sales Prices

Commodity	1Q2007		1Q2006		% Change
Natural Gas (per Mcf)	$	7.93	$	7.57	4.8
Oil (per barrel)	$	58.36	$	45.94	27.0
NGL (per gallon)	$	0.80	$	0.58	37.9

Production

Commodity	1Q2007	1Q2006	% Change
Natural Gas	15,547 MMcf	15,327 Bcf	1.4
Oil	927 MBbl	917 MBbl	1.1
NGL	18,893 Mgal	16,646 Mgal	13.5
Total	23.8 Bcfe	23.2 Bcfe	2.6

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Per-unit lease operating expense totaled $1.99 per Mcfe, down from $2.02 per unit in the same period last year largely due to lower, commodity price-driven production taxes. DD&A expense per unit in the first quarter of 2007 increased 10 percent over the same period last year to $1.09 per Mcfe.

Alabama Gas Corporation

Energen’s natural gas utility, Alabama Gas Corporation (Alagasco), generated net income of $40.3 million in the first quarter of 2007; this $3 million increase over the same period a year ago largely reflects the utility’s ability to earn on a higher level of equity representing investment in utility plant.

Trailing 12-Months Results

For the 12 months ended March 31, 2007, Energen’s net income totaled $290 million, or $3.99 per diluted share, and compares with $201.5 million, or $2.73 per diluted share, for the same period a year ago. Included in the current 12-months earnings is a $34.5 million, or 47 cents per diluted share, after-tax gain associated with the Company’s sale of one-half interest in its acreage position in Alabama shales to Chesapeake Energy Corporation. Income from discontinued operations in both periods was immaterial.

Energen Resources Corporation

Energen Resources’ net income for the trailing 12-months period totaled $251 million as compared with $165.5 million in the same period last year. In addition to the one-time $34.5 million after-tax gain, Energen Resources’ benefited from significantly higher average realized prices for its natural gas, oil and NGL volumes and from a 4 percent, period-over-period, increase in production to 96.2 Bcfe.

Average Realized Sales Prices, Trailing 12 Months

Commodity	Ending 3/31/2007		Ending 3/31/2006		% Change
Natural Gas (per Mcf)	$	7.05	$	6.71	5.1
Oil (per barrel)	$	52.93	$	38.80	36.4
NGL (per gallon)	$	0.71	$	0.56	26.8

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Production, Trailing 12 Months

Commodity	Ending 3/31/2007	Ending 3/31/2006	% Change
Natural Gas	63.0 Bcf	61.7 Bcf	2.1
Oil	3.7 MMBbl	3.4 MMBbl	8.8
NGL	78.6 MMgal	71.4 MMgal	10.0
Total	96.2 Bcfe	92.4 Bcfe	4.1

Per-unit lease operating expense totaled $1.92 per Mcfe in the 12 months ending March 31, 2007, up 4 percent from $1.85 per Mcfe in the same period last year; this increase largely was due to a general rise in field service costs, increased repairs and work-over expenses, and the December 2005 acquisition of Permian Basin properties; these increases were partially offset by a 17 percent decline in per-unit production taxes. DD&A expense per unit in the 12 months ended March 31, 2007, increased 5 percent over the same period last year from 97 cents per Mcfe to $1.02 per Mcfe, primarily due to the Permian Basin property acquisition in December 2005.

Alabama Gas Corporation

Alagasco generated net income in the 12 months ended March 31, 2007, of $40.3 million as compared with $35.3 million in the same period a year ago.

2007 Earnings Guidance Affirmed

Energen today reaffirmed its 2007 earnings guidance range of $3.80 to $4.20 per diluted share. “Energen’s excellent performance in the first quarter of 2007, together with our substantial hedge position for the remainder of this year, gives us a great deal of confidence that we are on the right track to achieve our sixth consecutive year of record earnings in 2007,” said Energen President James McManus at today’s Annual Shareholders Meeting.

Key assumptions in Energen’s 2007 budget are:

• Existing hedge position covering approximately 68 percent of production for the remainder of 2007.

• Assumed prices for unhedged natural gas, oil and NGL production of $8 per Mcf, $60 per barrel and 78 cents per gallon, respectively

• Production of 95 Bcfe

• Capital spending of $335 million, including some $275 million by Energen Resources and approximately $60 million by Alagasco

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• An average DD&A rate at Energen Resources of $1.13 per Mcfe

• Per-unit LOE at Energen Resources, including production taxes, of $2.11 per Mcfe

• Alagasco’s earning near its allowed range of return on average equity of approximately $300 million

• Average diluted shares outstanding of 72.3 million.

Hedge Position for Remainder of 2007

Energen Resources’ hedge position for the remainder of the year by commodity is as follows:

Commodity	Hedge Vols.	Est. 2007 Production	% Hedged	NYMEX- equiv. price
Natural Gas	31.8 Bcf	46.8 Bcf	68	$	8.93
Oil	2.0 MMBbl	2.9 MMBbl	71	$	68.96
NGL	33.6 MMgal	53.0 MMgal	63	$	0.93

NOTE: Actual April data used where known

Energen Resources’ natural gas hedge position for the remainder of the year by hedge type is as follows:

Hedge Type	Volumes (Bcf)	Assumed Basis		Price/Mcf (NYMEX equiv)
NYMEX Hedges	9.7		—	$	9.28
San Juan Basin-specific	19.5	$	1.00	$	8.68
Permian Basin-specific	0.3	$	0.79	$	8.11
SNG-Louisiana	2.3		—	$	9.72

NOTE: Actual April data used where known

Energen Resources’ oil hedge position for the remainder of the year by hedge type is as follows:

Hedge Type	Volumes (MBbl)	Assumed Differential		Price/Barrel (NYMEX equiv)
NYMEX Hedges	261		—	$	75.42
Sour Oil (WTS)	1,774	$	4.76	$	68.01

NOTE: Actual April data used where known

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Average realized oil and gas prices for Energen Resources’ production associated with NYMEX contracts as well as for unhedged production will reflect the impact of basis differentials. Average NGL revenue per unit of production will be net of transportation and fractionation fees.

For production associated with basin-specific contracts, Energen Resources will receive the contracted hedge price. Energen typically hedges basis differentials where applicable. In the tables above, the basin-specific contract prices were converted for comparability purposes to a NYMEX-equivalent price by adding to them Energen Resources’ assumed basis differentials.

Earnings Sensitivities to Commodity Price Changes

Given Energen Resources’ current hedge position for the remainder of 2007 and using the price assumptions given above for the Company’s unhedged production, changes in commodity prices are estimated to have the following impact on Energen’s 2007 earnings:

• Every 10-cent change in the average NYMEX price of gas from $8.00 represents an estimated net income impact of approximately $560,000 (0.8 cents per diluted share).

• Every $1.00 change in the average NYMEX price of oil from $60.00 per barrel represents an estimated net income impact of approximately $380,000 (0.5 cents per diluted share).

• Every 1-cent change in the average price of liquids from $0.78 per gallon represents an estimated net income impact of approximately $80,000 (0.1 cents per diluted share).

Price-related events such as substantial basis differential changes could cause earnings sensitivities to be materially different from those outlined above.

2008 Earnings Guidance Initiated

Energen initiated earnings guidance for 2008 with a range of $3.60—$4.00 per diluted share. “Our outlook for 2008 earnings is being influenced significantly by three factors,” said McManus. “First, our current hedge position; second, our assumed prices for our unhedged production; and, third, our production estimates.

“What we are looking at right now is a substantially smaller hedge position in 2008 relative to 2007, and the average prices of our 2008 hedges are lower for each commodity relative to our 2007 hedges.

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“So, even though our estimated 2008 production of 98 Bcfe represents a 3 percent increase over 2007 production estimates, our average realized prices likely will be lower on a per-unit basis for each commodity in 2008 given our current hedge position and our price assumptions,” McManus said.

“We do believe there is room for commodity-price driven upside,” he added, noting that current strip prices for 2008 are about $8.80 per Mcf for natural gas and approximately $70 per barrel for oil.

“We are very excited about the organic production growth we expect to generate in 2008,” McManus added. “This production growth is the direct result of our current-year drilling activities that are focused on the accelerated development of our proved undeveloped reserves and, to a lesser extent, accelerated development of our 1.9 Tcfe of unproved reserves.”

Key assumptions in Energen’s 2008 earnings guidance include:

• Existing hedge position covering approximately 21 percent of estimated 2008 production

• Assumed prices for unhedged natural gas, oil and NGL production of $8.50 per Mcf, $65 per barrel and 84.5 cents per gallon, respectively

• A 3 percent increase in production to 98 Bcfe

• Capital spending of approximately $250 million, including $190 by Energen Resources and $60 million by Alagasco

• An average DD&A rate at Energen Resources of $1.28 per Mcfe

• Lease operating expense at Energen Resources, including production taxes, of $2.22 per Mcfe

• Alagasco’s earning within its allowed range of return on average equity of approximately $315 million

• Average diluted shares outstanding of 72.6 million

“I would emphasize that none of our 2008 estimates include any potential production or drilling capital associated with our stake in multiple shale plays in Alabama,” added McManus.

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2008 Hedge Position

Energen Resources’ 2008 hedge position by commodity is as follows:

Commodity	Hedge Vols.	Est. 2008 Production	% Hedged		NYMEX- equiv. price
Natural Gas	7.2 Bcf	64.8 Bcf	11	%	$	8.68 per Mcf
Oil	2.2 MMBbl	4.0 MMBbl	53	%	$	66.62 per barrel
NGL	4.5 MMgal	63.7 MMgal	7	%	$	0.87 per gallon

Energen Resources’ 2008 natural gas hedge position by hedge type is as follows:

Hedge Type	Volumes (Bcf)	Assumed Basis		Price/Mcf (NYMEX equiv)
NYMEX Hedges	3.6		—	$	8.47
San Juan Basin-specific	3.6	$	0.98	$	8.90

Energen Resources’ 2008 oil hedge position by hedge type is as follows:

Hedge Type	Volumes (MBbl)	Assumed Differential		Price/Barrel (NYMEX equiv)
NYMEX Hedges	900		—	$	57.71
Sour Oil (WTS)	1,260	$	5.20	$	72.99

Average realized oil and gas prices for ERC’s production associated with NYMEX contracts as well as for unhedged production will reflect the impact of basis differentials. Average realized NGL prices will be net of transportation and fractionation fees.

For production associated with basin-specific contracts, ERC will receive the contracted hedge price. Energen typically hedges basis differentials where applicable. In the tables above, the basin-specific contract prices were converted for comparability purposes to a NYMEX-equivalent price by adding to them ERC’s assumed basis differentials.

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Earnings Sensitivities to Commodity Price Changes

Given ERC’s current hedge position for 2008 and using the price assumptions given above for the Company’s unhedged production, changes in commodity prices are estimated to have the following impact on Energen’s 2008 earnings:

• Every 10-cent change in the average NYMEX price of gas from $8.50 represents an estimated net income impact of approximately $3 million (4.1 cents per diluted share).

• Every $1.00 change in the average NYMEX price of oil from $65.00 per barrel represents an estimated net income impact of approximately $925,000 (1.3 cents per diluted share).

• Every 1-cent change in the average price of liquids from $0.845 per gallon represents an estimated net income impact of approximately $265,000 (0.4 cents per diluted share).

Price-related events such as substantial basis differential changes could cause earnings sensitivities to be materially different from those outlined above.

Alabama Shale Update

Energen Resources and Chesapeake Energy Corporation continue to work together to lease shale acreage in their Area of Mutual Interest (AMI), which encompasses Alabama and some of Georgia. Energen Resources’ net acreage position as of April 15, 2007, totals approximately 180,000 acres and represents multiple shale opportunities.

For the next 3-6 months, the two energy companies plan to continue building their acreage position in Alabama in advance of drilling. Energen and Chesapeake still plan to drill two natural gas wells in Alabama in 2007 but now anticipate that activity to get under way late in the year.

Probable, Possible Reserves Update

An update of Energen Resources’ probable and possible reserves shows that the Company’s unproved reserve inventory remains an estimated 1.9 Tcfe, with probable reserves totaling 590 Bcfe and possible reserves totaling 1,315 Bcfe. These unproved reserves do not include any potential reserves associated with the Company’s pursuit of natural gas in Alabama shales.

The Company cannot include such information about unproved reserve potential in its financial statements and notes filed with the Securities and Exchange Commission.

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Location, Amount and Estimated Finding Cost of Reserves (Bcfe) – Unrisked

Basin/Area	Proved Reserves	Probable Reserves			Possible Reserves
		Quantity	Unit Cost		Quantity	Unit Cost
San Juan	920	280	$	1.18	798	$	0.66
Permian	497	254	$	1.28	460	$	1.29
Black Warrior	231	31	$	0.86	42	$	0.90
No. LA/E. TX/Other	75	25	$	3.22	16	$	3.88
Total	1,723	590	$	1.29	1,315	$	0.93

The definitions of probable and possible reserves imply different probabilities of potential recovery in each classification; the quantities reported here are unrisked. All the estimates were prepared by Energen Resources’ technical staff and were 100 percent reviewed by independent reservoir engineers. The same commodity prices used to calculate year-end 2006 proved reserves were applied in establishing the Company’s probable and possible reserves.

Additional investment is necessary to develop the Company’s probable and possible reserve inventory. The cost estimates in the table are unrisked and are based on the Company’s best estimate of current costs to drill wells in each basin/area and bring associated production to market. Future development costs are dependent on the timing of development.

Definitions of Unproved Reserve Classifications

Previously reported proved reserves were based on Security and Exchange Commission (SEC) definitions. Since the SEC does not define unproved reserves, Energen Resources followed definitions for probable and possible reserves approved by the Society of Petroleum Engineers (SPE) and the World Petroleum Congress (WPC).

Unproved reserves are based on geologic and/or engineering data similar to that used in estimates of proved reserves; but technical, contractual, economic, or regulatory uncertainties preclude such reserves being classified as proved. Unproved reserves may be further classified as probable reserves and possible reserves.

Unproved reserves may be estimated assuming future economic conditions different from those prevailing at the time of the estimate. The effect of possible future improvements in economic conditions and technological developments can be expressed by allocating appropriate quantities of reserves to the probable and possible classifications.

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Probable Reserves

Probable reserves are those unproved reserves which analysis of geological and engineering data suggests are more likely than not to be recoverable. In this context, when probabilistic methods are used, there should be at least a 50% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable reserves.

In general, probable reserves may include:

1) reserves anticipated to be proved by normal step-out drilling where sub-surface control is inadequate to classify these reserves as proved,

2) reserves in formations that appear to be productive based on well log characteristics but lack core data or definitive tests and that are not analogous to producing or proved reservoirs in the area,

3) incremental reserves attributable to infill drilling that could have been classified as proved if closer statutory spacing had been approved at the time of the estimate,

4) reserves attributable to improved recovery methods that have been established by repeated commercially successful applications when (a) a project or pilot is planned but not in operation and (b) rock, fluid, and reservoir characteristics appear favorable for commercial application,

5) reserves in an area of the formation that appears to be separated from the proved area by faulting and the geologic interpretation indicates the subject area is structurally higher than the proved area,

6) reserves attributable to a future workover, treatment, re-treatment, change of equipment, or other mechanical procedures, where such procedure has not been proved successful in wells which exhibit similar behavior in analogous reservoirs, and

7) incremental reserves in proved reservoirs where an alternative interpretation of performance or volumetric data indicates more reserves than can be classified as proved.

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Possible Reserves

Possible reserves are those unproved reserves which analysis of geological and engineering data suggests are less likely to be recoverable than probable reserves. In this context, when probabilistic methods are used, there should be at least a 10% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable plus possible reserves.

In general, possible reserves may include:

1) reserves which, based on geological interpretations, could possibly exist beyond areas classified as probable,

2) reserves in formations that appear to be petroleum bearing based on log and core analysis but may not be productive at commercial rates,

3) incremental reserves attributed to infill drilling that are subject to technical uncertainty,

4) reserves attributed to improved recovery methods when (a) a project or pilot is planned but not in operation and (b) rock, fluid, and reservoir characteristics are such that a reasonable doubt exists that the project will be commercial, and

5) reserves in an area of the formation that appears to be separated from the proved area by faulting and geological interpretation indicates the subject area is structurally lower than the proved area.

This release contains statements expressing expectations of future plans, objectives and performance that constitute forward-looking statements made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Except as otherwise disclosed, the Company’s forward-looking statements do not reflect the impact of possible or pending acquisitions, divestitures or restructurings. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise. All statements based on future expectations rather than on historical facts are forward-looking statements that are dependent on certain events, risks and uncertainties that could cause actual results to differ materially from those anticipated. In addition, the Company cannot guarantee the absence of errors in input data, calculations and formulas used in its estimates, assumptions and forecasts. A more complete discussion of risks and uncertainties that could affect future results of Energen and its subsidiaries is included in the Company’s periodic reports filed with the Securities and Exchange Commission.

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Energen Corporation is a diversified energy holding company with headquarters in Birmingham, AL. Its two lines of business are the acquisition and development of domestic, onshore natural gas, oil and NGL reserves and natural gas distribution in central and north Alabama. Energen Resources has approximately 1.7 Tcfe of proved reserves in the San Juan, Permian and Black Warrior basins and in the North Louisiana/East Texas area. More information is available at www.energen.com.

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EX-99.2

EXHIBIT 99.2:

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

For the 3 months ending March 31, 2007 and 2006

	1st Quarter						Change
(in thousands, except per share data)	2007			2006
Operating Revenues
Oil and gas operations	$	194,033		$	169,519		$	24,514
Natural gas distribution		298,628			318,623			(19,995	)
Total operating revenues		492,661			488,142			4,519
Operating Expenses
Cost of gas		168,138			194,050			(25,912	)
Operations & maintenance		82,043			74,483			7,560
Depreciation, depletion and amortization		38,020			34,297			3,723
Taxes, other than income taxes		30,312			32,679			(2,367	)
Accretion expense		950			898			52
Total operating expenses		319,463			336,407			(16,944	)
Operating Income		173,198			151,735			21,463
Other Income (Expense)
Interest expense		(12,221	)		(13,177	)		956
Other income		561			707			(146	)
Other expense		(195	)		(229	)		34
Total other expense		(11,855	)		(12,699	)		844
Income from Continuing Operations Before Income Taxes		161,343			139,036			22,307
Income tax expense		57,462			51,535			5,927
Income from Continuing Operations		103,881			87,501			16,380
Discontinued Operations, Net of Taxes
Income (loss) from discontinued operations		1			(7	)		8
Gain on disposal of discontinued operations		—			—			—
Income (Loss) from Discontinued Operations		1			(7	)		8
Net Income	$	103,882		$	87,494		$	16,388
Diluted Earnings Per Average Common Share
Continuing operations	$	1.44		$	1.18		$	0.26
Discontinued operations		—			—			—
Net Income	$	1.44		$	1.18		$	0.26
Basic Earnings Per Average Common Share
Continuing operations	$	1.45		$	1.19		$	0.26
Discontinued operations		—			—			—
Net Income	$	1.45		$	1.19		$	0.26
Diluted Avg. Common Shares Outstanding		72,124			74,094			(1,970	)
Basic Avg. Common Shares Outstanding		71,482			73,268			(1,786	)
Dividends Per Common Share	$	0.115		$	0.11		$	0.005

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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)2

For the 12 months ending March 31, 2007 and 2006

	Trailing 12 Months						Change
(in thousands, except per share data)	2007			2006
Operating Revenues
Oil and gas operations	$	755,056		$	594,333		$	160,723
Natural gas distribution		643,449			661,195			(17,746	)
Total operating revenues		1,398,505			1,255,528			142,977
Operating Expenses
Cost of gas		347,185			372,817			(25,632	)
Operations & maintenance		309,717			282,805			26,912
Depreciation, depletion and amortization		145,809			134,563			11,246
Taxes, other than income taxes		93,360			100,112			(6,752	)
Accretion expense		3,671			2,902			769
Total operating expenses		899,742			893,199			6,543
Operating Income		498,763			362,329			136,434
Other Income (Expense)
Interest expense		(47,696	)		(48,307	)		611
Other income		865			2,517			(1,652	)
Other expense		(1,072	)		(671	)		(401	)
Total other expense		(47,903	)		(46,461	)		(1,442	)
Income from Continuing Operations Before Income Taxes		450,860			315,868			134,992
Income tax expense		160,957			114,423			46,534
Income from Continuing Operations		289,903			201,445			88,458
Discontinued Operations, Net of Taxes
Income from discontinued operations		2			6			(4	)
Gain on disposal of discontinued operations		53			9			44
Income from Discontinued Operations		55			15			40
Net Income	$	289,958		$	201,460		$	88,498
Diluted Earnings Per Average Common Share
Continuing operations	$	3.99		$	2.73		$	1.26
Discontinued operations		—			—			—
Net Income	$	3.99		$	2.73		$	1.26
Basic Earnings Per Average Common Share
Continuing operations	$	4.02		$	2.75		$	1.27
Discontinued operations		—			—			—
Net Income	$	4.02		$	2.75		$	1.27
Diluted Avg. Common Shares Outstanding		72,674			73,904			(1,230	)
Basic Avg. Common Shares Outstanding		72,138			73,160			(1,022	)
Dividends Per Common Share	$	0.445		$	0.41		$	0.035

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SELECTED BUSINESS SEGMENT DATA (UNAUDITED)

For the 3 months ending March 31, 2007 and 2006

	1st Quarter
(in thousands, except sales price data)	2007		2006		Change
Oil and Gas Operations
Operating revenues
Natural gas	$	123,225	$	116,084	$	7,141
Oil		54,084		42,142		11,942
Natural gas liquids		15,042		9,677		5,365
Other		1,682		1,616		66
Total	$	194,033	$	169,519	$	24,514
Production volumes from continuing operations
Natural gas (MMcf)		15,547		15,327		220
Oil (MBbl)		927		917		10
Natural gas liquids (MMgal)		18.9		16.6		2.3
Production volumes from continuing ops. (MMcfe)		23,806		23,209		597
Total production volumes (MMcfe)		23,805		23,209		596
Revenue per unit of production including effects of all derivative instruments
Natural gas (Mcf)	$	7.93	$	7.57	$	0.36
Oil (barrel)	$	58.36	$	45.94	$	12.42
Natural gas liquids (gallon)	$	0.80	$	0.58	$	0.22
Other data from continuing operations
Lease operating expense (LOE)
LOE and other	$	35,409	$	33,862	$	1,547
Production taxes		12,011		13,093		(1,082	)
Total	$	47,420	$	46,955	$	465
Depreciation, depletion and amortization	$	26,473	$	23,551	$	2,922
Capital expenditures	$	53,395	$	44,905	$	8,490
Exploration expenditures	$	97	$	109	$	(12	)
Operating income	$	105,301	$	88,539	$	16,762
Natural Gas Distribution
Operating revenues
Residential	$	203,798	$	218,506	$	(14,708	)
Commercial and industrial		77,722		84,557		(6,835	)
Transportation		14,567		12,735		1,832
Other		2,541		2,825		(284	)
Total	$	298,628	$	318,623	$	(19,995	)
Gas delivery volumes (MMcf)
Residential		11,579		11,685		(106	)
Commercial and industrial		4,872		4,941		(69	)
Transportation		13,420		13,359		61
Total		29,871		29,985		(114	)
Other data
Depreciation and amortization	$	11,547	$	10,746	$	801
Capital expenditures	$	14,967	$	18,845	$	(3,878	)
Operating income	$	68,437	$	63,727	$	4,710

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SELECTED BUSINESS SEGMENT DATA (UNAUDITED)

For the 12 months ending March 31, 2007 and 2006

	Trailing 12 Months
(in thousands, except sales price data)	2007		2006		Change
Oil and Gas Operations
Operating revenues
Natural gas	$	444,701	$	414,119	$	30,582
Oil		193,401		132,488		60,913
Natural gas liquids		55,623		39,987		15,636
Other		61,331		7,739		53,592
Total	$	755,056	$	594,333	$	160,723
Production volumes from continuing operations
Natural gas (MMcf)		63,044		61,693		1,351
Oil (MBbl)		3,654		3,414		240
Natural gas liquids (MMgal)		78.6		71.4		7.2
Production volumes from continuing ops. (MMcfe)		96,193		92,373		3,820
Total production volumes (MMcfe)		96,191		92,402		3,789
Revenue per unit of production including effects of all derivative instruments
Natural gas (Mcf)	$	7.05	$	6.71	$	0.34
Oil (barrel)	$	52.93	$	38.80	$	14.13
Natural gas liquids (gallon)	$	0.71	$	0.56	$	0.15
Other data
Lease operating expense (LOE)
LOE and other	$	136,400	$	115,354	$	21,046
Production taxes		48,427		55,160		(6,733	)
Total	$	184,827	$	170,514	$	14,313
Depreciation, depletion and amortization	$	100,764	$	91,879	$	8,885
Capital expenditures	$	268,168	$	358,132	$	(89,964	)
Exploration expenditures	$	4,169	$	461	$	3,708
Operating income	$	421,911	$	293,438	$	128,473
Natural Gas Distribution
Operating revenues
Residential	$	411,358	$	425,105	$	(13,747	)
Commercial and industrial		175,065		186,214		(11,149	)
Transportation		47,782		42,996		4,786
Other		9,244		6,880		2,364
Total	$	643,449	$	661,195	$	(17,746	)
Gas delivery volumes (MMcf)
Residential		22,204		23,274		(1,070	)
Commercial and industrial		11,157		12,144		(987	)
Transportation		50,821		49,468		1,353
Total		84,182		84,886		(704	)
Other data
Depreciation and amortization	$	45,045	$	42,684	$	2,361
Capital expenditures	$	72,279	$	77,319	$	(5,040	)
Operating income	$	78,984	$	70,245	$	8,739

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EX-99.3

EXHIBIT 99.3:

Non-GAAP Financial Measures

The United States Securities and Exchange Commission requires public companies, such as Energen Corporation (the Company), to reconcile Non-GAAP (GAAP refers to generally accepted accounting principles) financial measures to related GAAP measures. After-tax Cash Flows and Adjusted Cash Flows from Operations Excluding Alabama Gas Corporation (Alagasco) are Non-GAAP financial measures. Energen believes after-tax cash flows are relevant because they are a measure of cash available to fund the Company’s capital expenditures, dividends, debt reduction, and other investments. Similarly, Adjusted Cash Flows from Operations Excluding Alagasco reflect comparable information specific to the Company’s non-regulated activities.

Reconciliation To GAAP Information

($ in millions)

	Years Ended 12/31
	2006 Actual		2007 Estimate (a)			2008 Estimate (a)
Net Income (GAAP)	274		275	—	305	260	—	290
Depreciation, depletion and amortization	142		155	—	155	180	—	180
Deferred income taxes, net	98		0	—	0	50	—	50
After-tax Cash Flows (Non-GAAP)	514		430	—	460	490	—	520
Changes in assets and liabilities and other adjustments	(31	)	10	—	20	10	—	20
Net Cash Provided by Operating Activities (GAAP)	483		440	—	480	500	—	540

Reconciliation To GAAP Information

($ in millions)

	Years Ended 12/31
	2006 Actual		2007 Estimate (a)					2008 Estimate (a)
Net Cash Provided by Operating Activities (GAAP)	483		440		—	480		500		—	540
Changes in assets and liabilities and other adjustments	31		(10	)	—	(20	)	(10	)	—	(20	)
After-tax Cash Flow (Non-GAAP)	514		430		—	460		490		—	520
Less: AGC cash flows from operations (GAAP)	(84	)	(95	)	—	(95	)	(88	)	—	(88	)
Adj. Cash Flows from Operations Excluding Alagasco (Non-GAAP)	430		335		—	365		402		—	432

(a) This estimate is a “forward-looking statement” as defined by the Securities and Exchange Commission. All statements based on future expectations rather than on historical facts are forward-looking statements that are dependent on certain events, risks and uncertainties that could cause actual results to differ materially from those anticipated. In addition, the Company cannot guarantee the absence of errors in input data, calculations and formulas used in its estimates, assumptions and forecasts. A discussion of risks and uncertainties, which could affect future results of Energen and its subsidiaries, is included in the Company’s periodic reports filed with the Securities and Exchange Commission.

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