Current EGN Stock Info

Energen Corporation (ticker: EGN) released financial and operating results for the fourth quarter and calendar year ended December 31, 2017.

“Over the last five years, the board and management have strategically divested non-core assets and transformed Energen into a low-cost Permian pure-pay with a strong foundation for profitable growth,” said CEO James McManus. “We begin 2018 with a portfolio of high quality, oil-focused assets in the Delaware and Midland basins. The company is delivering strong returns with the continued implementation of Generation 3 frac designs that are driving significant production growth.”

Energen Approaches 100 MBOEPD

Energen Identified Inventory, Feb. 2018

Q4 2017

Energen turned to production 20 gross (16 net) wells in the Midland Basin and 5 gross (5 net) wells in the Delaware Basin. During the quarter, Energen operated 6 horizontal drilling rigs and 2 frac crews.

For the 3 months ended December 31, 2017, Energen reported GAAP net income from all operations of $262.4 million, or $2.68 per diluted share. Adjusting for a non-cash loss on mark-to-market derivatives of $37.5 million, a one-time, non-cash tax benefit of $240.1 million resulting from the Tax Cuts and Jobs Act and miscellaneous non-cash items totaling $1.4 million. Energen had adjusted net income in Q4 2017 of $61.3 million, or $0.63 per diluted share. This compares with an adjusted net loss in Q4 2016 of $26.6 million, or $(0.27) per diluted share.

 

Q4 2017 production – MBOEPD

Commodity 4Q17
  Actual   Guidance   % ∆
Oil   58.1   54.0   8
NGL   19.4   14.9   30
Natural Gas   20.0   16.8   19
Total   97.4   85.7   14
 
Area 4Q17
  Actual   Guidance   % ∆
Midland Basin   51.7   45.4   14
Delaware Basin   37.4   32.4   15
Platform/Other   8.2   7.8   5
Total   97.4   85.7   14
 
Note: Totals may not sum due to rounding.

 

2017 financial results

Energen reported GAAP net income from all operations of $306.8 million, or $3.14 per diluted share. Adjusting for a non-cash items, Energen had adjusted net income in 2017 of $73.6 million, or $0.75 per diluted share. This compares with an adjusted net loss in 2016 of $128.8 million, or $(1.36) per diluted share. Energen’s adjusted EBITDAX in 2017 totaled $653.0 million – more than double the company’s adjusted EBITDAX in 2016 of $293.2 million.

 

2017 production – MBOEPD

By Commodity   CY17   CY16*   % ∆
Oil   46.4   34.5   34  
NGL   14.4   9.4   53  
Natural Gas   15.3   10.7   43  
Total   76.1   54.6   39  
 
By Basin   CY17   CY16*   % ∆
Midland Basin   42.4   35.3   20  
Delaware Basin   25.6   10.3   149  
Platform/Other   8.1   9.0   (10 )
Total   76.1   54.6   39  
 
* Excludes 2016 asset sales
Note: Totals may not sum due to rounding

 

2017 capital

Drilling and development capital in 2017 totaled $902 million, including $197 million in the fourth quarter. Total capital invested in 2017, including leasehold/mineral acquisitions and FF&E, totaled $1.2 billion in 2017 and $217 million in the fourth quarter. During Q4 2017, Energen added approximately 1,600 net acres of proved and unproved leasehold for $16 million.

2018

Energen plans to invest $1.1-$1.3 billion of capital for drilling and development activities in 2018 (approximately $550-$650 million for the Delaware and Midland basins, respectively).

Approximately 81% of the capital will be invested in drilling and developing operated wells, around 13% is allocated to saltwater disposal wells and other facilities, and the remainder is expected to be spent on non-operated and other activities.

The company plans to drill approximately 130 gross/120 net horizontal wells in 2018 and complete approximately 123 gross/113 net horizontal wells, including 30 gross/28 net year-end 2017 drilled but uncompleted wells (DUCs).

The working interest of completed wells in 2018 is approximately 90%, and the average lateral length is approximately 8,000’. The company estimates its year-end 2018 DUCs will total approximately 37 gross/35 net. Energen also plans to drill 7 gross/7 net vertical wells in the Midland Basin and complete 6 gross/6 net wells. During 2018, the company plans to run an average of 9 drilling rigs and 4.5 frac crews.

Energen’s production in 2018 is estimated to range from 91.5-98.5 MBOEPD, reflecting a 25% increase from 2017 at midpoint.

 

Area 2018 Guidance 2018 Guidance 2017 Actual % Change
    Range   Midpoint       Mdpt. vs Actual
Midland Basin   48.5 – 51.5   50.0   42.4   18
Delaware Basin   37.0 – 39.0   38.0   25.6   48
Platform/Other   6.0 – 8.0   7.0   8.1   (14)
Total   91.5 – 98.5   95.0   76.1   25
 
NOTE: Totals may not sum due to rounding

 

2017 year-end proved reserves

Energen’s proved reserves at year-end 2017 totaled 444 MMBOE, up approximately 40% from year-end 2016.

Reserve additions of 115.5 MMBOE replaced production by 415% and were driven by an active drilling and completion program in the Midland and Delaware basins that featured Gen 3 frac designs, Energen said. Proved reserves in the Delaware Basin alone rose 177%.

 

Proved Reserves by Basin (MMBOE):

Basin YE16 2017 Acquisitions/ Additions Price/Other YE17
        Production   (Divestitures)       Revisions    
Midland Basin   236.4   (15.5 )     49.0   23.9   293.8
Delaware Basin   39.1   (9.4 )   0.2   66.3   11.8   108.1
Platform/Other   40.9   (3.0 )     0.1   4.1   41.1
TOTAL   316.3   (27.8 )   0.2   115.5   39.8   444.0
 
NOTE: Totals may not sum due to rounding

 


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