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

September 8, 2011

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

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ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(e) Energen Corporation (the “Company”) consolidated earnings per share and subsidiary net incomes are components of the fiscal year 2011 performance objectives for the Company’s Annual Incentive Compensation Plan (“AICP”). In setting these objectives, management and the Officer Review Committee (“ORC”) of the Company’s Board of Directors did not anticipate that the Company might enter into derivative transactions extending beyond December 31, 2011, unless such transactions qualified for cash flow hedge accounting. The Company has recently entered into derivative transactions extending beyond December 31, 2011, which do not qualify for cash flow hedge accounting (“Mark-to-Market Transactions”) and may enter into additional Mark-to-Market transactions during the third and fourth quarters of 2011. Mark-to-Market Transactions are recorded at fair value with gains or losses recognized in operating revenues in the period of change.

It is the ORC’s intent that Mark-to-Market Transaction gains or losses not impact the payment of 2011 incentives. In the event that Mark-to-Market Transactions result in net gains for 2011, the ORC intends to exercise its discretionary authority to reduce incentives paid under the AICP by excluding such gains from the calculation of earnings per share and net income in measuring the attainment of 2011 performance objectives under the AICP. In the event that Mark-to-Market Transactions result in net losses for 2011, the ORC intends to recommend that the Board of Directors award incremental discretionary bonuses such that the sum of a participant’s AICP bonus plus such participant’s discretionary bonus equals the bonus that would have been paid under the AICP if there had been no 2011 Mark-to-Market Transactions. The Company cannot estimate amounts payable to any officers under the AICP as of the date hereof.

ITEM 7.01 Regulation FD Disclosure

In a change from prior practice, the Company has recently entered into future year production derivative transactions which do not qualify for cash flow hedge accounting. These derivative transactions will be accounted for as mark-to-market transactions and recorded at fair value with gains or losses recognized in operating revenues in the period of change. The Company’s prior practice has been to structure such transactions with the expectation that they will qualify for cash flow hedge accounting.

On September 12, 2011, the Company issued a press release announcing the recent mark-to-market derivative transactions. The press release is attached hereto as Exhibit 99.1.

ITEM 9.01 Financial Statements and Exhibits

(d) Exhibits.

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

Exhibit Number:
99.1	Press Release dated September 12, 2011

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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
September 13, 2011	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 September 12, 2011

* 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 Release: 7:30 a.m. EDT	Contacts: Julie S. Ryland
Monday, September 12, 2011	205.326.8421

Energen Adds to Hedge Positions in 2012-2014

BIRMINGHAM, Ala. – Energen Corporation (NYSE: EGN) announced today that its oil and gas exploration and production subsidiary, Energen Resources Corporation, has hedged an additional 960,000 barrels of its estimated oil production in 2012 and 480,000 barrels of its estimated oil production in both 2013 and 2014, all at NYMEX prices over $91 per barrel.

Energen is an active and long-time practitioner of using commodity derivative contracts to manage its exposure to price volatility. Historically, these derivatives (or hedges), as applied to production in future years, have qualified for cash flow hedge accounting treatment, with realized gains and losses recognized in production revenues when the forecasted transactions occurred.

Energen Resources’ latest hedges mark a change in the company’s practice, as these derivative transactions for production in future years do not qualify for cash flow hedge accounting. This change allows the company to enter into valid economic hedges for production in future years that is not currently flowing. Gains and losses from the change in fair value of derivative instruments that do not qualify for cash flow hedge accounting are reported in operating revenues each applicable reporting period and, therefore, can cause non-cash earnings volatility.

“As we invest record capital to drill and develop our extensive Permian Basin leasehold in the Wolfberry play and the 3^rd Bone Spring, Avalon shale, and Wolfcamp trends, we want to provide additional protection for our cash flows beyond that allowed by our previous practice,” said Energen Chairman and CEO James McManus. “This will help ensure that we can implement our capital programs in 2012 and 2013 and generate attractive returns and double-digit production growth.”

Energen’s total hedge positions for 2012, 2013, and 2014 are as follows:

2012

Energen Resources’ hedge position for 2012 is as follows:

Commodity	Hedge Volumes	Estimated Production	NYMEXe Price
Natural Gas	40.5 Bcf	75.0 - 81.0 Bcf	$4.99/Mcf
Oil	5.5 MMBO	8.0 - 8.5 MMBO	$87.09/barrel
NGL	39.9 MMgal	105.0 - 126.0 MMgal	$0.86/gallon

Energen Resources’ natural gas and oil hedge positions by hedge type for 2012 are as follows:

Natural Gas Hedges	Volumes (Bcf)	Assumed Differential	NYMEXe Price
San Juan Basin	29.5	$0.35 per Mcf	$4.95 per Mcf
NYMEX	11.0	—	$5.07 per Mcf

Oil Hedges	Volumes (MBO)	Assumed Differential	NYMEXe Price
Sour Oil (WTS)	3,124	$3.00 per barrel	$83.20 per barrel
NYMEX	2,363	—	$92.23 per barrel

2013

Energen Resources’ hedge position for 2013 is as follows:

Commodity	Hedge Volumes	Estimated Production	NYMEXe Price
Natural Gas	33.9 Bcf	78.0 - 84.0 Bcf	$5.25/Mcf
Oil	4.2 MMBO	9.0 - 9.5 MMBO	$88.70/barrel
NGL	35.2 MMgal	126.0 - 147.0 MMgal	$1.02/gallon

Energen Resources’ natural gas and oil hedge positions by hedge type for 2013 are as follows:

Natural Gas Hedges	Volumes (Bcf)	Assumed Differential	NYMEXe Price
San Juan Basin	25.1	$0.35 per Mcf	$5.23 per Mcf
NYMEX	8.8	—	$5.30 per Mcf
Oil Hedges	Volumes (MBO)	Assumed Differential	NYMEXe Price
Sour Oil (WTS)	2,768	$4.00 per barrel	$86.34 per barrel
NYMEX	1,419	—	$93.31 per barrel

2014

Energen Resources’ hedge position for 2014 is as follows:

Commodity	Hedge Volumes	NYMEXe Price
Natural Gas	19.8 Bcf	$5.55/Mcf
Oil (NYMEX)	3.7 MMBO	$90.04/barrel

Energen Resources’ natural gas hedge position by hedge type for 2014 is as follows:

Natural Gas Hedges	Volumes (Bcf)	Assumed Differential	NYMEXe Price
San Juan Basin	16.8	$0.35 per Mcf	$5.52 per Mcf
NYMEX	3.0	—	$5.72 per Mcf

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 realized NGL prices will be net of transportation and fractionation fees.

For production associated with basin-specific contracts, Energen Resources will receive the contracted hedge price. Energen may hedge basis differentials as 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.

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Energen Corporation is an oil and gas exploration and production company with headquarters in Birmingham, Alabama. Through Energen Resources Corporation, the company has approximately 900 million barrels of oil-equivalent proved, probable, and possible reserves. These all-domestic reserves are located mainly in the San Juan and Permian basins. For more information, go to http://www.energen.com.

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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