ENERGEN CORP - FORM 8-K - EX-99.3 - EXHIBIT 99.3

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8-K - FORM 8-K - ENERGEN CORP	d922447d8k.htm
EX-99.2 - EXHIBIT 99.2 - ENERGEN CORP	d922447dex992.htm
EX-99.1 - EXHIBIT 99.1 - ENERGEN CORP	d922447dex991.htm

Exhibit 99.3

Non-GAAP Financial Measures

Adjusted Net Income is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles) which excludes certain non-cash mark-to-market derivative financial instruments. Adjusted income from continuing operations further excludes impairment losses, income associated with certain divestments, gains and losses on disposal of discontinued operations and income and losses from discontinued operations. Energen believes that excluding the impact of these items is more useful to analysts and investors in comparing the results of operations and operational trends between reporting periods and relative to other oil and gas producing companies.


	Three Months Ended 3/31/2015
Energen Net Income ($ in millions except per share data)	Net Income			Per Diluted Share
Net Income (Loss) All Operations (GAAP)		(15.4	)		(0.21	)
Non-cash mark-to-market losses (net of $21.3 tax)		38.4			0.53
Asset impairment, other (net of $2.4 tax)		4.2			0.06
Income associated w/ San Juan Basin divestment (net of $14.1 tax)		(23.4	)		(0.32	)

Adjusted Income from Continuing Operations (Non-GAAP)		3.7			0.05


	Three Months Ended 3/31/2014
Energen Net Income ($ in millions except per share data)	Net Income			Per Diluted Share
Net Income (Loss) All Operations (GAAP)		53.3			0.73
Non-cash mark-to-market losses (net of $12.1 tax)		21.5			0.29
Asset impairment, other (net of $0.5 tax)		0.8			0.01
Income associated w/ San Juan Basin divestment (net of $7.6 tax)		(13.8	)		(0.19	)

Adjusted Net Income from All Operations (Non-GAAP)		61.8			0.85

Income from discontinued operations (net of $23.6 tax)		(38.7	)		(0.53	)
Loss on disposal of discontinued operations (net of $0.6 tax)		1.1			0.01

Adjusted Income from Continuing Operations (Non-GAAP)		24.2			0.33

Note: Amounts may not sum due to rounding

Non-GAAP Financial Measures

Earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses (EBITDAX) is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Adjusted EBITDAX from continuing operations further excludes income associated with certain divestments, impairment losses, certain non-cash mark-to-market derivative financial instruments, income and losses from discontinued operations and gains and losses on disposal of discontinued operations. Energen believes these measures allow analysts and investors to understand the financial performance of the company from core business operations, without including the effects of capital structure, tax rates and depreciation. Further, this measure is useful in comparing the company and other oil and gas producing companies.


Reconciliation To GAAP Information ($ in millions)	Three Months Ended 3/31
Reconciliation To GAAP Information ($ in millions)	2015			2014
Energen Net Income (Loss) (GAAP)		(15.4	)		53.3
Income associated w/ San Juan Basin divestment, net of tax		(23.4	)		(13.8	)

Adjusted Net Income from Continuing Operations (Non-GAAP)		(38.9	)		39.5

Interest expense *		11.8			7.9
Income tax expense (benefit) *		(22.8	)		0.6
Depreciation, depletion and amortization *		126.3			109.7
Accretion expense *		1.6			1.5
Exploration expense *		0.8			11.6
Adjustment for asset impairment *		6.6			1.2
Adjustment for mark-to-market losses		59.7			33.7
Adjustment for income from discontinued operations, net of tax		0.0			(38.7	)
Adjustment for loss on disposal of discontinued operations, net of tax		0.0			1.1

Energen Adjusted EBITDAX from Continuing Operations (Non-GAAP)		145.0			168.1

Note: Amounts may not sum due to rounding

*	Amount adjusted to exclude San Juan Basin divestment. See reconciliation to GAAP Information for the Three Months Ended 3/31/2015 and 3/31/2014.

Non-GAAP Financial Measures

The consolidated statement of income excluding certain divestments is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Energen believes excluding information associated with the divestment of assets held in the San Juan Basin provides analysts and investors useful information to understand the financial performance of the company from ongoing business operations. Further, this information is useful in comparing the company and other oil and gas producing companies operating primarily in the Permian Basin.

Energen Net Income (Loss) Excluding San Juan Divestment

Reconciliation to GAAP Information

(in thousands except per share and production data)

Three Months Ended
March 31, 2015

GAAP

$/BOE

San Juan Basin

$/BOE

Non-GAAP

$/BOE

Revenues

Oil, natural gas liquids and natural gas sales

187,822

23,645

164,177

Gain (loss) on derivative instruments

34,036

8,369

25,667

Total Revenues

221,858

32,014

189,844

Operating Costs and Expenses

Oil, natural gas liquids & natural gas production

67,754

10.74

12,637

8.78

55,117

11.32

Production and ad valorem taxes

19,065

3.02

2,001

1.39

17,064

3.50

O&G Depreciation, depletion and amortization

132,839

21.06

8,068

5.60

124,771

25.63

FF&E Depreciation, depletion and amortization

1,542

0.24

—

0.00

1,542

0.32

Asset impairment

6,583

—

6,583

Exploration

763

—

763

General and administrative

32,055

5.08

(559

)

0.39

)

32,614

6.70

Accretion of discount on asset retirement obligations

2,010

433

1,577

(Gain) loss on sale of assets and other

(28,344

)

(28,054

)

(290

)

Total costs and expenses

234,267

(5,474

)

239,741

Operating Income (Loss)

(12,409

)

37,488

(49,897

)

Other Income/(Expense)

Interest Expense

(11,758

)

—

(11,758

)

Other income

—

Total other expense

(11,712

)

—

(11,712

)

Income (Loss) from Continuing Operations Before Income Taxes

(24,121

)

37,488

(61,609

)

Income tax expense (benefit)

(8,701

)

14,057

(22,758

)

Income (Loss) From Continuing Operations

(15,420

)

23,431

(38,851

)

Discontinued Operations, net of tax

Income from discontinued operations

—

Loss on Disposal of discontinued ops

—

Income from discontinued ops

—

Net Income (Loss)

(15,420

)

23,431

(38,851

)

Diluted Earnings Per Average Common Share

Continuing Operations

(0.21

)

0.32

(0.53

)

Discontinued Operations

—

Net Income (Loss)

(0.21

)

0.32

(0.53

)

Basic earning Per Average Common Share

Continuing Operations

(0.21

)

0.32

(0.53

)

Discontinued Operations

—

Net Income (Loss)

(0.21

)

0.32

(0.53

)

Oil

3,235

3,233

NGL

861

129

732

Gas

2,213

1,309

904

Total Production (mboe)

6,309

1,440

4,869

Total Production (boepd)

70,100

16,000

54,100

Note: Amounts may not sum due to rounding

Non-GAAP Financial Measures

Energen Net Income (Loss) Excluding San Juan Divestment
Reconciliation to GAAP Information

(in thousands except per share and production data)

Three Months Ended
March 31, 2014

GAAP

$/BOE

San Juan Basin

$/BOE

Non-GAAP

$/BOE

Revenues

Oil, natural gas liquids and natural gas sales

350,822

48,399

302,423

Gain (loss) on derivative instruments

(53,391

)

5,942

(59,333

)

Total Revenues

297,431

54,341

243,090

Operating Costs and Expenses

Oil, natural gas liquids & natural gas production

67,444

11.23

14,361

8.75

53,083

12.16

Production and ad valorem taxes

27,324

4.55

4,160

2.53

23,164

5.31

O&G Depreciation, depletion and amortization

123,314

20.52

14,437

8.79

108,877

24.93

FF&E Depreciation, depletion and amortization

906

0.15

0.04

841

0.18

Asset impairment

1,246

—

1,246

Exploration

11,568

)

11,571

General and administrative

32,173

5.36

(465

)

0.28

)

32,638

7.48

Accretion of discount on asset retirement obligations

1,843

381

1,462

(Gain) loss on sale of assets and other

153

—

153

Total costs and expenses

265,971

32,936

233,035

Operating Income (Loss)

31,460

21,405

10,055

Other Income/(Expense)

Interest Expense

(7,888

)

—

(7,888

)

Other income

323

—

323

Total other expense

(7,565

)

—

(7,565

)

Income (Loss) from Continuing Operations Before Income Taxes

23,895

21,405

2,490

Income tax expense (benefit)

8,248

7,607

641

Income (Loss) From Continuing Operations

15,647

13,798

1,849

Discontinued Operations, net of tax

Income from discontinued operations

38,719

—

38,719

Loss on Disposal of discontinued ops

(1,050

)

—

(1,050

)

Income from discontinued ops

37,669

—

37,669

Net Income (Loss)

53,316

13,798

39,518

Diluted Earnings Per Average Common Share

Continuing Operations

0.21

0.19

0.03

Discontinued Operations

0.52

—

0.52

Net Income (Loss)

0.73

0.19

0.54

Basic earning Per Average Common Share

Continuing Operations

0.21

0.19

0.03

Discontinued Operations

0.52

—

0.52

Net Income (Loss)

0.73

0.19

0.54

Oil

2,751

2,748

NGL

903

162

741

Gas

2,354

1,477

877

Total Production (mboe)

6,008

1,642

4,366

Total Production (boepd)

66,756

18,244

48,511

Note: Amounts may not sum due to rounding

Non-GAAP Financial Measures

Excluding production associated with certain divestments is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Energen believes excluding data associated with the divestment of assets held in the San Juan Basin provides analysts and investors useful information to understand the financial performance of the company from ongoing business operations. Further, this measure is useful in comparing the company and other oil and gas producing companies operating primarily in the Permian Basin.

Energen Production Excluding San Juan Divestment

Reconciliation to GAAP Information

Three Months Ended
December 31, 2014

GAAP

San Juan Basin

Non-GAAP

Oil

3,213

3,209

NGL

1,027

148

879

Gas

2,441

1,408

1,033

Total Production (mboe)

6,681

1,560

5,121

Total Production (boepd)

72,620

16,957

55,663

Note: Amounts may not sum due to rounding

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