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Form 8-K ENERGEN CORP For: Apr 15

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April 20, 2015 5:00 PM EDT

 

 

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 15, 2015

 

 

 

Commission

File Number

  

Registrant

  

State of Incorporation

  

IRS Employer

Identification Number

1-7810   Energen Corporation   Alabama   63-0757759

 

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 1.01 Entry into a Material Definitive Agreement

Effective April 16, 2015, Energen Corporation (“Energen”) entered into a second amendment (the “Amendment”) to its credit agreement (the “Credit Agreement”) among Energen, as borrower, Wells Fargo Bank, National Association, as administrative agent, Energen Resources Corporation, as guarantor, and the institutions named therein as lenders. Terms used and not defined herein have the respective meanings given to such terms in the Credit Agreement and the Amendment, respectively.

The Amendment changes the Credit Agreement to decrease the Borrowing Base from $2.1 billion to $1.6 billion, and correspondingly, the Aggregate Commitment from $2.0 billion to $1.6 billion (redetermined as required semi-annually on each April 1 and October 1 under the Credit Agreement). The Amendment also changes the Credit Agreement provision relating to certain Senior Notes that may be issued by Energen without a reduction in the Borrowing Base by increasing the maximum aggregate stated principal amount of such Senior Notes from $300 million to $400 million and extending the deadline for issuing such Senior Notes from April 1, 2015 to the delivery of the New Borrowing Base Notice for the Scheduled Redetermination scheduled to occur on or about October 1, 2015.

In the ordinary course of their respective businesses, certain of the lenders and other parties to the Amendment and their respective affiliates have engaged, and may in the future engage, in commercial banking, investment banking, financial advisory or other services to Energen and its affiliates for which they have in the past and may in the future receive customary compensation and expense reimbursement.

The preceding summary of the material terms of the Amendment is qualified in its entirety by the full text of such agreement, which is filed herewith as Exhibit 10.1. In the event of any discrepancy between the preceding summary and the text of the Amendment, the text of the Amendment shall control.

 

ITEM 7.01 Regulation FD Disclosure

On April 15, 2015, Energen Corporation issued a press release announcing anticipated well-cost savings as a result of drilling and completion service cost reductions and drilling efficiencies in the Permian Basin. The press release is attached hereto as Exhibit 99.1.

The information furnished pursuant to Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Energen Corporation under the Securities Act of 1933 or the Exchange Act.

 

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:

     
10.1   

Second Amendment to the Credit Agreement dated as of April 16, 2015, by and among Energen Corporation, as borrower, Wells Fargo Bank, National Association, as administrative agent, Energen Resources Corporation, as guarantor, and the institutions named therein as lenders

99.1   

Press Release dated April 15, 2015

 

2

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

April 20, 2015

     By  

/s/ Charles W. Porter, Jr.

    Charles W. Porter, Jr.
   

Vice President, Chief Financial Officer and Treasurer of Energen Corporation

EXHIBIT INDEX

 

EXHIBIT
NUMBER

  

DESCRIPTION

10.1   *   

Second Amendment to the Credit Agreement dated as of April 16, 2015, by and among Energen Corporation, as borrower, Wells Fargo Bank, National Association, as administrative agent, Energen Resources Corporation, as guarantor, and the institutions named therein as lenders

99.1   *   

Press Release dated April 15, 2015

 

*

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

 

3

Exhibit 10.1

Execution Version

 

 

 

SECOND AMENDMENT

TO THE

CREDIT AGREEMENT

dated as of April 16, 2015

among

ENERGEN CORPORATION,

as Borrower,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

THE GUARANTOR SIGNATORY HERETO,

and

THE LENDERS SIGNATORY HERETO

 

 

 

SECOND AMENDMENT TO

CREDIT AGREEMENT

This SECOND AMENDMENT TO THE CREDIT AGREEMENT (this “Second Amendment”), dated as of April 16, 2015 (the “Second Amendment Effective Date”), is among ENERGEN CORPORATION, a corporation formed under the laws of the State of Alabama (“Borrower”); the undersigned guarantor (the “Guarantor”, and together with Borrower, the “Credit Parties”); each of the Lenders party hereto; and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, “Administrative Agent”).

Recitals

A. Borrower, Administrative Agent and the Lenders are parties to that certain Credit Agreement dated as of September 2, 2014 (as heretofore amended, modified, supplemented or restated, the “Credit Agreement”), pursuant to which the Lenders have, subject to the terms and conditions set forth therein, made certain credit available to and on behalf of Borrower.

B. The parties hereto desire to enter into this Second Amendment to amend certain terms of the Credit Agreement as set forth herein, to be effective as of the Second Amendment Effective Date.

C. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Defined Terms. Each capitalized term which is defined in the Credit Agreement, but which is not defined in this Second Amendment, shall have the meaning ascribed to such term in the Credit Agreement (as amended hereby). Unless otherwise indicated, all section references in this Second Amendment refer to the Credit Agreement.

Section 2. Amendments to Credit Agreement. In reliance on the representations, warranties, covenants and agreements contained in this Second Amendment, and subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, the Credit Agreement shall be amended effective as of the Second Amendment Effective Date in the manner provided in this Section 2.

2.1 Amendment to Section 2.07(e). Section 2.07(e) of the Credit Agreement is hereby amended as follows:

(a) the reference to “$300,000,000” appearing in clause (y) of the third sentence of Section 2.07(e) is replaced with “$400,000,000”; and

(b) the reference to “April 1, 2015” appearing in clause (y) of the third sentence of Section 2.07(e) is replaced with “delivery of the New Borrowing Base Notice for the Scheduled Redetermination scheduled to occur on or about October 1, 2015”.

 

1

2.2 Amendment to Section 12.02(b). In order to correct a typographical error, Borrower and Administrative Agent hereby agree to replace the reference to “Section 12.07” appearing in clause (ii) of Section 12.02(b) with “Section 2.07” (it being acknowledged and agreed that pursuant to clause (y) of the last sentence of Section 12.02(b), no consent of the Lenders is required to correct such typographical error).

Section 3. Borrowing Base Redetermination; Reduction of Aggregate Commitment.

3.1 Subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, Administrative Agent and the Lenders hereby agree that for the period from and including the Second Amendment Effective Date to but excluding the next Redetermination Date, the amount of the Borrowing Base shall be equal to $1,600,000,000 (the “April Redetermination”). Administrative Agent, the Lenders and Borrower agree that the foregoing constitutes the April 1, 2015 Scheduled Redetermination and that this Second Amendment shall constitute the New Borrowing Base Notice with respect to such Scheduled Redetermination. Notwithstanding the foregoing, the Borrowing Base may be subject to further redeterminations and adjustments from time to time pursuant to Section 2.07 or Section 8.12(c).

3.2 Concurrently with the April Redetermination, the Aggregate Commitment shall be reduced (ratably among the Lenders in accordance with each Lender’s Applicable Percentage) pursuant to Section 2.06(b)(iii), so that the Aggregate Commitment equals $1,600,000,000 (and Annex I is hereby deemed amended to reflect the reduction to each Lender’s Commitment and the Aggregate Commitment).

Section 4. Conditions Precedent. The effectiveness of this Second Amendment is subject to the following:

4.1 Administrative Agent shall have received counterparts of this Second Amendment from the Credit Parties and the Required Lenders.

4.2 Administrative Agent shall have received such other documents as Administrative Agent or special counsel to Administrative Agent may reasonably request.

Administrative Agent shall notify Borrower and the Lenders of the effectiveness of this Second Amendment, and such notice shall be conclusive and binding.

Section 5. Representations and Warranties; Etc. Each Credit Party hereby affirms: (a) that as of the date hereof, the representations and warranties of Borrower and Guarantor set forth in each Loan Document are true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date hereof, such representations and warranties continue to be true and correct in all material respects (or, if qualified by materiality or Material Adverse Effect, in all respects) as of such specified earlier date and (b) that as of the date hereof, no Default or Event of Default has occurred and is continuing or would result from this Second Amendment.

 

2

Section 6. Miscellaneous.

6.1 Confirmation and Effect. The provisions of the Credit Agreement (as amended by this Second Amendment) shall remain in full force and effect in accordance with its terms following the effectiveness of this Second Amendment. Each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof’, “herein”, or words of like import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference to the Credit Agreement in any other document, instrument or agreement executed and/or delivered in connection with the Credit Agreement shall mean and be a reference to the Credit Agreement as amended hereby. The execution, delivery and effectiveness of this Second Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

6.2 Ratification and Affirmation of Credit Parties. Each of the Credit Parties hereby expressly (a) acknowledges the terms of this Second Amendment, (b) ratifies and affirms its obligations under the Guaranty Agreement and the other Loan Documents to which it is a party, (c) acknowledges, renews and extends its continued liability under the Guaranty Agreement and the other Loan Documents to which it is a party (in each case, as amended hereby), and (d) acknowledges and confirms that the amendments contemplated hereby shall not limit or impair any Liens securing the Indebtedness, each of which are hereby ratified, affirmed and extended to secure the Indebtedness after giving effect to this Second Amendment.

6.3 Counterparts. This Second Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this Second Amendment by facsimile or electronic (e.g. pdf) transmission shall be effective as delivery of a manually executed original counterpart hereof.

6.4 No Oral Agreement. This written Second Amendment, the Credit Agreement and the other Loan Documents executed in connection herewith and therewith represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or unwritten oral agreements of the parties. There are no subsequent oral agreements between the parties.

6.5 Governing Law. This Second Amendment (including, but not limited to, the validity and enforceability hereof) shall be governed by, and construed in accordance with, the laws of the State of New York.

6.6 Severability. Any provision of this Second Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

6.7 Loan Document. This Second Amendment shall constitute a “Loan Document” for all purposes under the other Loan Documents.

[signature pages follow]

 

3

IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed effective as of the date first written above.

 

BORROWER: ENERGEN CORPORATION
By:

/s/ Charles W. Porter, Jr.

Name: Charles W. Porter, Jr.
Title:

Vice President, Chief Financial Officer and Treasurer

GUARANTOR: ENERGEN RESOURCES CORPORATION
By:

/s/ Charles W. Porter, Jr.

Name: Charles W. Porter, Jr.
Title:

Vice President, Chief Financial Officer and Treasurer

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

ADMINISTRATIVE AGENT:

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent, Issuing Bank and Lender

By:

/s/ Collin Mayer

Name: Collin Mayer
Title: Assistant Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

SYNDICATION AGENT: BANK OF AMERICA, N.A,
as Syndication Agent and Lender
By:

/s/ Raza Jafferi

Name: Raza Jafferi
Title: Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

CO-DOCUMENTATION AGENT: COMPASS BANK,
as Co-Documentation Agent and Lender
By:

/s/ Blake Kirshman

Name: Blake Kirshman
Title: Senior Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

CO-DOCUMENTATION AGENT: JPMORGAN CHASE BANK, N.A.,
as Co-Documentation Agent and Lender
By:

/s/ Jo Linda Papadakis

Name: Jo Linda Papadakis
Title: Authorized Officer

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

CO-DOCUMENTATION AGENT: REGIONS BANK,
as Co-Documentation Agent and Lender
By:

/s/ William A. Philipp

Name: William A. Philipp
Title: Senior Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

LENDERS:

MUFG UNION BANK, N.A.,

as Lender

By:

/s/ Mark Oberreuter

Name: Mark Oberreuter
Title: Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

CIBC Inc.,
as Lender
By:

/s/ William M. Reid

Name: William M. Reid
Title: Authorized Signatory
By:

/s/ Trudy Nelson

Name: Trudy Nelson
Title: Authorized Signatory

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

MIZUHO BANK, LTD.,
as Lender
By:

/s/ Leon Mo

Name: Leon Mo
Title: Authorized Signatory

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

PNC BANK, NATIONAL ASSOCIATION,
as Lender
By:

/s/ Jonathan Luchansky

Name: Jonathan Luchansky
Title: Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

SUMITOMO MITSUI BANKING CORPORATION,

as Lender
By:

/s/ James D. Weinstein

Name: James D. Weinstein
Title: Managing Director

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

U.S. BANK NATIONAL ASSOCIATION,
as Lender
By:

/s/ John C. Springer

Name: John C. Springer
Title: Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

BRANCH BANKING AND TRUST COMPANY,

as Lender
By:

/s/ Ryan Aman

Name: Ryan Aman
Title: Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

BMO HARRIS BANK N. A.,
as Lender
By:

/s/ Melissa Guzmann

Name: Melissa Guzmann
Title: Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

DNB CAPITAL LLC,
as Lender
By:

/s/ Asulv Tveit

Name: Asulv Tveit
Title: First Vice President
By:

/s/ James Grubb

Name: James Grubb
Title: Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

ROYAL BANK OF CANADA,
as Lender
By:

/s/ Kristan Spivey

Name: Kristan Spivey
Title: Authorized Signatory

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

THE TORONTO DOMINION (NEW YORK) LLC,
as Lender
By:

/s/ Marie Fernandes

Name: Marie Fernandes
Title: Authorized Signatory

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

as Lender
By:

/s/ Robert Hetu

Name: Robert Hetu
Title: Authorized Signatory
By:

/s/ Remy Riester

Name: Remy Riester
Title: Authorized Signatory

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

BOKF, NA DBA BANK OF OKLAHOMA,

as Lender

By:

/s/ Jeffrey Hall

Name: Jeffrey Hall
Title: Senior Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

SYNOVUS BANK,

as Lender

By:

/s/ Joseph Keener

Name: Joseph Keener
Title: SVP

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

FIFTH THIRD BANK,

as Lender

By:

/s/ Larry Hayes

Name: Larry Hayes
Title: Director- Energy Finance

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

BARCLAYS BANK PLC,

as Lender

By:

/s/ Luke Syme

Name: Luke Syme
Title: Assistant Vice President

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

MORGAN STANLEY BANK, N. A.,

as Lender

By:

/s/ Matthew T. Meyers

Name: Matthew T. Meyers
Title: Authorized Signatory

 

[SIGNATURE PAGE]

[SECOND AMENDMENT TO THE CREDIT AGREEMENT]

[ENERGEN CORPORATION]

Exhibit 99.1

 

For Release: 5:00 p.m. EDT Contacts: Julie S. Ryland
Wednesday, April 15, 2015 205.326.8421

 

ENERGEN SEES ADDITIONAL, SIGNIFICANT COST SAVINGS IN 2015

 

New Service Cost Cuts Combine with Efficiency Gains to Reduce

 

Permian Basin Drill-and-Complete Costs

 

SERVICE COST REDUCTIONS ALSO LOWER PROJECTED MANCOS WELL COSTS

 

BIRMINGHAM, Alabama – Energen Corporation (NYSE: EGN) said today that it expects to realize additional well-cost savings of 15 percent to 25 percent during the last nine months of 2015 in the Permian Basin as a result of additional drilling and completion service cost reductions and drilling efficiencies that have been achieved. This is in addition to the 10 percent drilling and completion service cost savings (relative to 2014) already included in its 2015 drilling and development capital budget of approximately $1.0 billion. Energen rebid its service contracts at the end of March 2015.

 

“Drilling efficiency gains are being felt particularly in the Delaware Basin, where our drilling team is making excellent progress in reducing the number of days to drill,” said James McManus, Energen’s chairman and chief executive officer. “These efficiency gains have resulted largely from making changes in the casing program, improving hole-cleaning practices, optimizing the bottom-hole assembly selection, and modifying the mud program. The number of days needed to drill a new 4,500’ lateral Wolfcamp well to total depth in the Delaware Basin has declined to a current average of 30 days; our best drill time this year has been 20 days.

 

“In our Midland Basin Wolfcamp A & B development program, we continue to achieve drilling efficiencies, but the largest cost savings for new drills are the result of drilling and completion service cost reductions,” McManus added. “The average number of days to drill a new 7,500’ lateral Wolfcamp development well to total depth in Glasscock County is 21 days – 5 days with spudder rig and 16 days with drilling rig. Our best drill time this year has been 15 days – 5 days with spudder rig and 10 days with drilling rig.

 

1

“All of these cost savings and efficiency gains will impact our capital and, possibly, our drilling plans for 2015. We currently are assessing the impact of these cost reductions and expect to discuss any changes to existing plans in our upcoming quarterly disclosure to be issued after the market closes on May 6,” McManus added.

 

2

 

Per Well Drill-and-Complete Costs by Play

MIDLAND BASIN DEVELOPMENT WELLS ($MM)

 

     Current      EOY Target      Original
Budget
     South      North      South      North     

Wolfcamp A (7,500’ lateral)

    $ 6.1       $ 6.3       $ 5.9       $ 6.1      

 

Wolfcamp B (7,500’ lateral)

    $ 6.3       $ 6.5       $ 6.0       $ 6.3      

 

Wolfcamp A (6,700’ lateral)

    $ 5.8       $ 6.0       $ 5.6       $ 5.8       $6.5 - $7.5

 

Wolfcamp B (6,700’ lateral)

    $ 6.0       $ 6.2       $ 5.8       $ 6.0        
 

Wolfcamp A (4,400’ lateral)

    $ 5.1         —         $ 4.9         —        

 

Wolfcamp B (4,400’ lateral)

    $ 5.3         —         $ 5.1         —         $6.0 - $6.3

MIDLAND BASIN APPRAISAL WELLS ($MM)

 

     Current      Original Budget
   South      North     

Wolfcamp A (10,000’ lateral)

    $ 8.0       $ 8.2      

 

Wolfcamp B (10,000’ lateral)

    $ 8.2       $ 8.4       $11.5 - $12.0

 

Wolfcamp C (10,000’ lateral)

    $ 8.6       $ 8.8        
 

Wolfcamp A (7,500’ lateral)

    $ 7.3       $ 7.5      

 

Wolfcamp B (6,700’ lateral)

    $ 7.4       $ 7.6      

 

Spraberry (7,500’ lateral)

    $ 7.2       $ 7.4       $9.0 - $10.0

 

Spraberry (6,700’ lateral)

    $ 6.9       $ 7.1      

 

3

 

DELAWARE BASIN EXPLORATORY WELLS ($MM)

 

     Current      Original
Budget		    Single Well
Pad Target		      Pad-drilling
Development
Well Target		  

Wolfcamp A & B (4,500’ West)

    $ 8.3          $ 8.1       $ 7.5   

 

Wolfcamp A & B (4,500’ Central)

    $ 8.2       $10.0 - $11.0        $ 7.4       $ 6.9   

 

Wolfcamp A & B (4,500’ East)

    $ 8.7          $ 8.5       $ 7.7   

SAN JUAN BASIN EXPLORATORY WELLS ($MM)

 

     Current      Original Budget

Mancos (4,500’ South Central)

    $ 5.1      

 

Mancos (4,500’ East and West)

    $ 5.5       $6.5

NOTES:

 

  •  

All drill-and-complete costs include approximately $0.2 million of well-specific facilities costs (i.e., costs associated with getting production off the lease).

 

  •  

Drill-and-complete costs for appraisal/exploratory wells are greater than for development wells due to the one-off nature of the exploratory drilling and associated “science” as compared with pad drilling in a development (manufacturing) mode.

 

  •  

“Current” represents the drill-and-complete cost of a new well as of April 1, 2015, and includes service cost reductions and drilling efficiencies currently being achieved.

 

  •  

The “EOY Target” and “Single Well Pad Target” reflect potential, additional efficiency gains at current drilling and completion service costs.

 

4

 

Energen Corporation is an oil and gas exploration and production company with headquarters in Birmingham, Alabama. The company has 1.1 billion barrels of oil-equivalent proved, probable, and possible reserves and another 2.2 billion barrels of oil-equivalent contingent resources. These all-domestic reserves and resources are located primarily in the Permian Basin in west Texas. For more information, go to http://www.energen.com.

FORWARD LOOKING STATEMENT: 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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