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

July 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 July 25, 2007, Energen Corporation and Alabama Gas Corporation issued a press release announcing the second 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 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:
99.1	Press Release dated July 25, 2007**
99.2	Supplemental Financial Information

** Exhibit 99.1 revised to correct Total Production labels in the tables on pages 5 and 6.

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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
July 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 July 25, 2007
99.2	*	Supplemental Financial Information

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

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EX-99.1

Exhibit 99.1

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

Higher Realized Prices, Increased Production Drive Energen’s

Earnings Growth

Company Narrows 2007 Guidance Range, Raises 2008 Guidance

BIRMINGHAM, Alabama — Energen Corporation (NYSE: EGN) today attributed the 40 percent increase in its second quarter 2007 earnings per diluted share (EPS) primarily to higher realized sales prices for its natural gas, oil and natural gas liquids (NGL) production. Energen’s net income for the three months ended June 30, 2007, totaled $67.9 million, or 94 cents per diluted share, and compared favorably with net income of $49.6 million, or 67 cents per diluted share, in the same period a year ago.

Energen also announced today that the diversified energy company is:

• Increasing by 1 billion cubic feet equivalent (Bcfe) its 2007 production estimate to 96 Bcfe;

• Increasing by 10 cents the lower end of its 2007 earnings guidance to reflect a new, tighter range of $3.90 - $4.20 per diluted share;

• Increasing by 5 cents its 2008 earnings guidance to a new range of $3.65 - $4.05 per diluted share;

• Increasing its acreage position in Alabama shales; the Company currently has 220,000 net acres under lease.

MANAGEMENT COMMENTS

“Energen has experienced a number of positive developments during the first half of 2007,” said James McManus, Energen’s president and chief executive officer. “Year-to-date earnings are very strong due to higher realized sales prices and increased production. Energen remains on track to realize its sixth consecutive year of record earnings.

“We are very pleased with the success we continue to have in the San Juan Basin, where we are accelerating development largely through horizontal drilling in the Fruitland Coal formation. At mid-year, total production is outpacing our expectations, and we are pleased to be able to increase our 2007 production estimate to 96 Bcfe,” McManus said.

“With almost 70 percent of our estimated production in 2007 already hedged at solid prices, our sensitivity to commodity price changes is quite low; this fact, together with increased production, has prompted us to narrow our earnings guidance range by raising the bottom of the range 10 cents to $3.90 per diluted share,” he added.

“During the second quarter of 2007, Energen increased its hedge position for 2008 production,” said McManus. “We further added to this position just last week, such that 44 percent of our estimated 2008 production is now hedged: Approximately one-third of our estimated natural gas production is hedged and approximately two-thirds of both our estimated oil and NGL production. We believe there will be additional opportunities to add to our natural gas hedge position as we continue through the late summer and early winter.

“Having hedged at attractive prices relative to our assumptions, we are raising our earnings guidance for 2008 by 5 cents to $3.65 - $4.05 per diluted share,” McManus said.

“Our underlying price assumptions applicable to unhedged volumes remain unchanged at $8.50 per thousand cubic feet (Mcf) for natural gas, $65 per barrel for oil and 84.5 cents per gallon for NGLs,” he noted. “Although the 2008 strip price for natural gas currently is below our assumption, we were able to add to our hedge position just last week at prices above $8.50 per Mcf and believe the market will remain volatile, thereby providing future opportunities for additional hedging at or above our assumed price; meanwhile, the strip price for oil is well above our assumption at more than $70 per barrel.”

ALABAMA SHALES UPDATE

Energen Resources Corporation, Energen’s oil and gas exploration and production subsidiary, and its AMI partner, Chesapeake Energy Corporation, have now amassed a 440,000-acre lease position in multiple shale plays in north-central Alabama; Energen Resources’ net position is 220,000 acres. The two companies plan to start a 5- to 10-well test program on their Alabama shale acreage in the 4^th quarter of 2007. “This test program will run into 2008 and is aimed at defining the productive potential of our joint acreage position,” McManus said.

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2^ND QUARTER RESULTS

For the three months ended June 30, 2007, Energen’s net income totaled $67.9 million, or 94 cents per diluted share, and compared with second quarter 2006 net income of $49.6 million, or 67 cents per diluted share. This 40 percent increase in EPS primarily reflects higher realized sales prices for Energen Resources’ second quarter 2007 production, partially offset by increased lease operating expense (LOE) and depreciation, depletion and amortization expense (DD&A).

Energen Resources Corporation

Energen Resources’ second-quarter net income totaled $66.9 million in 2007, reflecting a 33 percent increase over net income of $50.4 million in the same period a year ago.

Table A: 2^nd Quarter Per-Unit Revenues and Production from Continuing Operations

	Average Realized Sales Prices			Production
	2Q2007	2Q2006	% Change	2Q2007	2Q2006	% Change
Natural Gas	$7.95 /Mcf	$6.75 / Mcf	17.8	15.7 Bcf	15.7 Bcf	0.0
Oil	$64.03 /Bbl	$51.92 / Bbl	23.3	947 MBbl	914 MBbl	3.6
NGL	$0.87 /Gal	$0.69 / Gal	26.1	19.1 MMgal	20.1 MMgal	(5.0)
Total	$8.38 /Mcfe	$6.96 / Mcfe	20.4	24.1 Bcfe	24.1 Bcfe	0.0

Per-unit LOE totaled $2.19 per Mcfe, up 19 percent from the same period a year ago, largely due a general rise in field service costs, increased repairs and work-over expenses; in addition, per-unit, commodity-price driven production taxes rose 5.7 percent. Per-unit DD&A in the second quarter of 2007 increased 13.5 percent over the same period last year to $1.09 per Mcfe.

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Alabama Gas Corporation

Energen’s natural gas utility, Alabama Gas Corporation (Alagasco), generated net income of $1.4 million in the second quarter of 2007 as compared with a net loss of $0.5 million in the second quarter of 2006.

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YEAR-TO-DATE RESULTS

For the six months ended June 30, 2007, Energen’s net income totaled $171.8 million, or $2.38 per diluted share, and compared with net income of $137.1 million, or $1.85 per diluted share, in the same period last year. This 29 percent increase in EPS largely reflects higher realized sales prices for Energen Resources’ production, partially offset by increased LOE and DD&A.

Energen Resources Corporation

Energen Resources’ year-to-date net income totaled $130.1 million in 2007 for a 30 percent increase over net income of $100.2 million in the same period a year ago.

Table B: YTD Per-Unit Revenues and Production from Continuing Operations

	Average Realized Sales Prices			Production
	YTD2007	YTD2006	% Change	YTD2007	YTD2006	% Change
Natural Gas	$7.94 / Mcf	$7.16 /Mcf	10.9	31,237 MMcf	31,052 MMcf	0.6
Oil	$61.23 / Bbl	$48.93 /Bbl	25.1	1,873 MBbl	1,832 MBbl	2.2
NGL	$0.83 / Gal	$0.64 /Gal	29.7	38.0 MMgal	36.7 MMgal	3.5
Total	$8.23 / Mcfe	$7.09 /Mcfe	16.1	47,905 MMcfe	47,285 MMcfe	1.3

Per-unit LOE totaled $2.09 per Mcfe, up 8 percent from the same period a year ago, largely due to a general rise in field service costs and increased repairs and work-over expenses, partially offset by a 4 percent decrease in per-unit, commodity-price driven production taxes. Per-unit DD&A expense in the first six months of 2007 increased 12 percent over the same period last year to $1.09 per Mcfe.

Alabama Gas Corporation

Alagasco generated net income of $41.7 million in the first six months of 2007 as compared with net income of $36.8 million in the same period last year; net income in the prior-year period was affected negatively by decreased usage driven by the high price of natural gas supplies during the 2006 winter heating season.

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RESULTS OF THE TRAILING 12 MONTHS

For the 12 months ended June 30, 2007, Energen’s net income totaled $308.3 million, or $4.26 per diluted share. This compared with $213.5 million, or $2.89 per diluted share, in 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 in October 2006 of one-half interest in its acreage position in Alabama shales to Chesapeake Energy Corporation. Income from discontinued operations was immaterial in both periods.

Energen Resources Corporation

Energen Resources’ net income in the trailing 12-months period totaled $267.5 million and compared with $179.5 million in the same period last year. In addition to the one-time $34.5 million after-tax gain, the oil and gas company benefited from higher realized sales prices and a 3 percent increase in production volumes to 96.2 Bcfe.

Table C: Trailing 12 Months Per-Unit Revenues and Production from Continuing Operations

	Average Realized Sales Prices			Production
	TTM2007	TTM2006	% Change	TTM2007	TTM2006	% Change
Natural Gas	$7.35 /Mcf	$6.84 /Mcf	7.5	63,009 MMcf	62,242 MMcf	1.2
Oil	$56.03 /Bbl	$43.51 /Bbl	28.8	3,686 MBbl	3,481 MBbl	5.9
NGL	$0.75 /Gal	$0.61 /Gal	23.0	77.6 MMgal	72.9 MMgal	6.4
Total	$7.57 /Mcfe	$6.64 /Mcfe	14.0	96,216 MMcfe	93,538 MMcfe	2.9

Alabama Gas Corporation

Alagasco generated net income of $42.2 million in the 12-months ended June 30, 2007, as compared to $33.7 million in the prior-year period; the difference largely was due to the timing of rate recovery between periods and the negative impact on prior-period net income resulting from decreased usage driven by the high price of natural gas supplies during the 2006 winter heating season.

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2007 EARNINGS GUIDANCE

Energen today narrowed its 2007 earnings guidance range by raising the bottom of the range 10 cents per diluted share. The new earnings guidance range is $3.90—$4.20 per diluted share. “Energen’s excellent year-to-date performance, better-than-expected production and substantial hedge position for the remainder of this year give 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 McManus.

Key assumptions in Energen’s 2007 earnings guidance are:

• Existing hedge position covering 67 percent of estimated production in the last half 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 96 Bcfe, an increase of 1 Bcfe;

• Capital spending of approximately $360 million, including some $300 million by Energen Resources and approximately $60 million by Alagasco; this $25 million increase in Energen Resources’ capital spending plans largely is due to an $18 million bolt-on acquisition in the Permian Basin and associated development;

• 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 within 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.	Production, 3Q-4Q (est.)	% Hedged	NYMEX-equiv. price
Natural Gas	21.1 Bcf	31.4 Bcf	67	$8.87 / Mcf
Oil	1,353 MBbl	1,942 MBbl	70	$68.88 / barrel
NGL	22.4 MMgal	35.1 MMgal	64	$0.93 / gallon

NOTE: Actual July data used where known

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Energen Resources’ natural gas and oil hedge positions for the remainder of the year by hedge type are as follows:

	Natural Gas Hedges
	Volumes (Bcf)	Assumed Differential (per Mcf)	NYMEXe Price (per Mcf)
NYMEX	6.4	—	$9.28
San Juan Basin	13.0	$1.00	$8.59
Permian Basin	0.2	$0.79	$7.98
SNG-Louisiana	1.5	$0.0	$9.72
	Oil Hedges
	Volumes (MBbl)	Assumed Differential (per barrel)	NYMEXe Price (per barrel)
NYMEX	174	—	$75.42
Sour Oil (WTS)	1,179	$4.79	$67.92

NOTE: Actual July data used where known

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 $365,000 (0.5 cents per diluted share).

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• Every $1.00 change in the average NYMEX price of oil from $60.00 per barrel represents an estimated net income impact of approximately $265,000 (0.4 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 $50,000 (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

Energen today raised its earnings guidance range for 2008 by 5 cents per diluted share to a new range of $3.65—$4.05 per diluted share; this increase primarily reflects the impact on earnings of the Company’s current hedge position. Energen maintains its 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.

Key assumptions in Energen’s 2008 earnings guidance include:

• Existing hedge position covering approximately 44 percent of estimated 2008 production;

• Production of 98 Bcfe;

• Capital spending of approximately $255 million, including $193 by Energen Resources and $62 million by Alagasco

• An average DD&A rate at Energen Resources of $1.29 per Mcfe

• Per-unit LOE 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 72.3 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.	2008e Production	% Hedged	NYMEX-equiv. price
Natural Gas	21.6 Bcf	64.8 Bcf	33	$8.78 / Mcf
Oil	2.7 MMBbl	4.0 MMBbl	65	$67.52 / barrel
NGL	41.3 MMgal	63.8 MMgal	65	$0.93 / gallon

Energen Resources’ 2008 natural gas and oil hedge positions by hedge type are as follows:

	Natural Gas Hedges
	Volumes (Bcf)	Assumed Differential (per Mcf)	NYMEXe Price (per Mcf)
NYMEX	10.8	—	$8.70
San Juan Basin	10.8	$1.05	$8.86
	Oil Hedges
	Volumes (MBbl)	Assumed Differential (per barrel)	NYMEXe Price (per barrel)
NYMEX	335	—	$72.30
Sour Oil (WTS)	2,333	$5.00	$66.83

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 $2,150 million (3.0 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 $670,000 (0.9 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 $65,000 (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.

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.

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 June 30, 2007 and 2006

	2nd Quarter						Change
(in thousands, except per share data)	2007			2006
Operating Revenues
Oil and gas operations	$	203,356		$	169,178		$	34,178
Natural gas distribution		111,566			113,196			(1,630	)
Total operating revenues		314,922			282,374			32,548
Operating Expenses
Cost of gas		53,358			57,831			(4,473	)
Operations & maintenance		84,111			78,401			5,710
Depreciation, depletion and amortization		38,707			34,499			4,208
Taxes, other than income taxes		21,870			21,433			437
Accretion expense		971			912			59
Total operating expenses		199,017			193,076			5,941
Operating Income		115,905			89,298			26,607
Other Income (Expense)
Interest expense		(12,016	)		(12,366	)		350
Other income		950			255			695
Other expense		(187	)		(272	)		85
Total other expense		(11,253	)		(12,383	)		1,130
Income from Continuing Operations Before Income Taxes		104,652			76,915			27,737
Income tax expense		36,749			27,313			9,436
Income from Continuing Operations		67,903			49,602			18,301
Discontinued Operations, Net of Taxes
Income (loss) from discontinued operations		-			(1	)		1
Gain on disposal of discontinued operations		-			-			-
Income (Loss) from Discontinued Operations		-			(1	)		1
Net Income	$	67,903		$	49,601		$	18,302
Diluted Earnings Per Average Common Share
Continuing operations	$	0.94		$	0.67		$	0.27
Discontinued operations		-			-			-
Net Income	$	0.94		$	0.67		$	0.27
Basic Earnings Per Average Common Share
Continuing operations	$	0.95		$	0.68		$	0.27
Discontinued operations		-			-			-
Net Income	$	0.95		$	0.68		$	0.27
Diluted Avg. Common Shares Outstanding		72,249			73,902			(1,653	)
Basic Avg. Common Shares Outstanding		71,592			73,028			(1,436	)
Dividends Per Common Share	$	0.115		$	0.11		$	0.005

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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

For the 6 months ending June 30, 2007 and 2006

	Year-to-date						Change
(in thousands, except per share data)	2007			2006
Operating Revenues
Oil and gas operations	$	397,389		$	338,697		$	58,692
Natural gas distribution		410,194			431,819			(21,625	)
Total operating revenues		807,583			770,516			37,067
Operating Expenses
Cost of gas		221,496			251,881			(30,385	)
Operations & maintenance		166,154			152,884			13,270
Depreciation, depletion and amortization		76,727			68,796			7,931
Taxes, other than income taxes		52,182			54,112			(1,930	)
Accretion expense		1,921			1,810			111
Total operating expenses		518,480			529,483			(11,003	)
Operating Income		289,103			241,033			48,070
Other Income (Expense)
Interest expense		(24,237	)		(25,543	)		1,306
Other income		1,511			962			549
Other expense		(382	)		(501	)		119
Total other expense		(23,108	)		(25,082	)		1,974
Income from Continuing Operations Before Income Taxes		265,995			215,951			50,044
Income tax expense		94,211			78,848			15,363
Income from Continuing Operations		171,784			137,103			34,681
Discontinued Operations, Net of Taxes
Income (loss) from discontinued operations		1			(8	)		9
Gain on disposal of discontinued operations		-			-			-
Income (Loss) from Discontinued Operations		1			(8	)		9
Net Income	$	171,785		$	137,095		$	34,690
Diluted Earnings Per Average Common Share
Continuing operations	$	2.38		$	1.85		$	0.53
Discontinued operations		-			-			-
Net Income	$	2.38		$	1.85		$	0.53
Basic Earnings Per Average Common Share
Continuing operations	$	2.40		$	1.87		$	0.53
Discontinued operations		-			-			-
Net Income	$	2.40		$	1.87		$	0.53
Diluted Avg. Common Shares Outstanding		72,153			73,978			(1,825	)
Basic Avg. Common Shares Outstanding		71,538			73,148			(1,610	)
Dividends Per Common Share	$	0.23		$	0.22		$	0.01

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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

For the 12 months ending June 30, 2007 and 2006

	Trailing 12 Months
(in thousands, except per share data)	2007			2006			Change
Operating Revenues
Oil and gas operations	$	789,234		$	629,084		$	160,150
Natural gas distribution		641,819			667,194			(25,375	)
Total operating revenues		1,431,053			1,296,278			134,775
Operating Expenses
Cost of gas		342,712			380,224			(37,512	)
Operations & maintenance		315,427			294,302			21,125
Depreciation, depletion and amortization		150,017			135,961			14,056
Taxes, other than income taxes		93,797			101,751			(7,954	)
Accretion expense		3,730			3,160			570
Total operating expenses		905,683			915,398			(9,715	)
Operating Income		525,370			380,880			144,490
Other Income (Expense)
Interest expense		(47,346	)		(49,149	)		1,803
Other income		1,422			2,255			(833	)
Other expense		(849	)		(675	)		(174	)
Total other expense		(46,773	)		(47,569	)		796
Income from Continuing Operations Before Income Taxes		478,597			333,311			145,286
Income tax expense		170,393			119,836			50,557
Income from Continuing Operations		308,204			213,475			94,729
Discontinued Operations, Net of Taxes
Income (loss) from discontinued operations		3			(9	)		12
Gain on disposal of discontinued operations		53			22			31
Income from Discontinued Operations		56			13			43
Net Income	$	308,260		$	213,488		$	94,772
Diluted Earnings Per Average Common Share
Continuing operations	$	4.26		$	2.89		$	1.37
Discontinued operations		-			-			-
Net Income	$	4.26		$	2.89		$	1.37
Basic Earnings Per Average Common Share
Continuing operations	$	4.29		$	2.92		$	1.37
Discontinued operations		0.01			-			0.01
Net Income	$	4.30		$	2.92		$	1.38
Diluted Avg. Common Shares Outstanding		72,315			73,939			(1,624	)
Basic Avg. Common Shares Outstanding		71,765			73,149			(1,384	)
Dividends Per Common Share	$	0.45		$	0.42		$	0.03

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SELECTED BUSINESS SEGMENT DATA (UNAUDITED)

For the 3 months ending June 30, 2007 and 2006

	2nd Quarter
(in thousands, except sales price data)	2007		2006		Change
Oil and Gas Operations
Operating revenues
Natural gas	$	124,712	$	106,194	$	18,518
Oil		60,615		47,475		13,140
Natural gas liquids		16,548		13,807		2,741
Other		1,481		1,702		(221	)
Total	$	203,356	$	169,178	$	34,178
Production volumes from continuing operations
Natural gas (MMcf)		15,690		15,725		(35	)
Oil (MBbl)		947		914		33
Natural gas liquids (MMgal)		19.1		20.1		(1	)
Production volumes from continuing ops. (MMcfe)		24,099		24,076		23
Total production volumes (MMcfe)		24,099		24,075		24
Revenue per unit of production including effects of all derivative instruments
Natural gas (Mcf)	$	7.95	$	6.75	$	1.2
Oil (barrel)	$	64.03	$	51.92	$	12.11
Natural gas liquids (gallon)	$	0.87	$	0.69	$	0.18
Other data from continuing operations
Lease operating expense (LOE)
LOE and other	$	39,121	$	31,622	$	7,499
Production taxes		13,589		12,759		830
Total	$	52,710	$	44,381	$	8,329
Depreciation, depletion and amortization	$	27,000	$	23,566	$	3,434
Capital expenditures	$	107,126	$	50,652	$	56,474
Exploration expenditures	$	178	$	1,417	$	(1,239	)
Operating income	$	111,472	$	87,138	$	24,334
Natural Gas Distribution
Operating revenues
Residential	$	66,828	$	67,495	$	(667	)
Commercial and industrial		31,172		32,856		(1,684	)
Transportation		11,367		10,261		1,106
Other		2,199		2,584		(385	)
Total	$	111,566	$	113,196	$	(1,630	)
Gas delivery volumes (MMcf)
Residential		3,187		3,295		(108	)
Commercial and industrial		1,981		2,084		(103	)
Transportation		12,197		11,589		608
Total		17,365		16,968		397
Other data
Depreciation and amortization	$	11,707	$	10,933	$	774
Capital expenditures	$	16,606	$	21,590	$	(4,984	)
Operating income	$	4,970	$	2,711	$	2,259

4

SELECTED BUSINESS SEGMENT DATA (UNAUDITED)

For the 6 months ending June 30, 2007 and 2006

	Year-to-date
(in thousands, except sales price data)		2007		2006		Change
Oil and Gas Operations
Operating revenues
Natural gas	$	247,937	$	222,278	$	25,659
Oil		114,699		89,617		25,082
Natural gas liquids		31,590		23,484		8,106
Other		3,163		3,318		(155	)
Total	$	397,389	$	338,697	$	58,692
Production volumes from continuing operations
Natural gas (MMcf)		31,237		31,052		185
Oil (MBbl)		1,873		1,832		41
Natural gas liquids (MMgal)		38.0		36.7		1.3
Production volumes from continuing ops. (MMcfe)		47,905		47,285		620
Total production volumes (MMcfe)		47,904		47,284		620
Revenue per unit of production including effects of all derivative instruments
Natural gas (Mcf)	$	7.94	$	7.16	$	0.78
Oil (barrel)	$	61.23	$	48.93	$	12.30
Natural gas liquids (gallon)	$	0.83	$	0.64	$	0.19
Other data from continuing operations
Lease operating expense (LOE)
LOE and other	$	74,530	$	65,484	$	9,046
Production taxes		25,600		25,852		(252	)
Total	$	100,130	$	91,336	$	8,794
Depreciation, depletion and amortization	$	53,473	$	47,117	$	6,356
Capital expenditures	$	160,521	$	95,557	$	64,964
Exploration expenditures	$	275	$	1,526	$	(1,251	)
Operating income	$	216,773	$	175,677	$	41,096
Natural Gas Distribution
Operating revenues
Residential	$	270,626	$	286,001	$	(15,375	)
Commercial and industrial		108,894		117,413		(8,519	)
Transportation		25,934		22,996		2,938
Other		4,740		5,409		(669	)
Total	$	410,194	$	431,819	$	(21,625	)
Gas delivery volumes (MMcf)
Residential		14,766		14,980		(214	)
Commercial and industrial		6,853		7,025		(172	)
Transportation		25,617		24,948		669
Total		47,236		46,953		283
Other data
Depreciation and amortization	$	23,254	$	21,679	$	1,575
Capital expenditures	$	31,573	$	40,435	$	(8,862	)
Operating income	$	73,407	$	66,438	$	6,969

5

SELECTED BUSINESS SEGMENT DATA (UNAUDITED)

For the 12 months ending June 30, 2007 and 2006

	Trailing 12 Months
(in thousands, except sales price data)		2007		2006		Change
Oil and Gas Operations
Operating revenues
Natural gas	$	463,219	$	425,913	$	37,306
Oil		206,541		151,464		55,077
Natural gas liquids		58,364		44,141		14,223
Other		61,110		7,566		53,544
Total	$	789,234	$	629,084	$	160,150
Production volumes from continuing operations
Natural gas (MMcf)		63,009		62,242		767
Oil (MBbl)		3,686		3,481		205
Natural gas liquids (MMgal)		77.6		72.9		4.7
Production volumes from continuing ops. (MMcfe)		98,216		93,538		4,678
Total production volumes (MMcfe)		98,215		93,558		4,657
Revenue per unit of production including effects of all derivative instruments
Natural gas (Mcf)	$	7.35	$	6.84	$	0.51
Oil (barrel)	$	56.03	$	43.51	$	12.52
Natural gas liquids (gallon)	$	0.75	$	0.61	$	0.14
Other data
Lease operating expense (LOE)
LOE and other	$	143,899	$	121,610	$	22,289
Production taxes		49,257		56,050		(6,793	)
Total	$	193,156	$	177,660	$	15,496
Depreciation, depletion and amortization	$	104,198	$	92,987	$	11,211
Capital expenditures	$	324,642	$	360,759	$	(36,117	)
Exploration expenditures	$	2,930	$	1,708	$	1,222
Operating income	$	446,245	$	315,208	$	131,037
Natural Gas Distribution
Operating revenues
Residential	$	410,691	$	427,821	$	(17,130	)
Commercial and industrial		173,381		189,490		(16,109	)
Transportation		48,888		43,012		5,876
Other		8,859		6,871		1,988
Total	$	641,819	$	667,194	$	(25,375	)
Gas delivery volumes (MMcf)
Residential		22,096		22,398		(302	)
Commercial and industrial		11,054		11,817		(763	)
Transportation		51,429		49,115		2,314
Total		84,579		83,330		1,249
Other data
Depreciation and amortization	$	45,819	$	42,974	$	2,845
Capital expenditures	$	67,295	$	78,012	$	(10,717	)
Operating income	$	81,243	$	67,326	$	13,917

6