Energen Closes, Signs PSAs on Assets in Delaware and San Juan Basins

Energen Corporation (NYSE: EGN) today announced that it has closed or
signed purchase and sale agreements (PSAs) for its non-core Delaware
Basin and San Juan Basin assets. Including all sales transactions with
multiple, undisclosed buyers, the total gross proceeds of $551.7 million
are subject to standard closing costs and transaction fees. Asset sales
not yet closed are expected to close by mid-August. The company expects
to incur minimal taxes in association with these transactions.

Net production associated with all the non-core properties being sold
averaged 9.0 thousand oil-equivalent barrels per day (mboepd) in April
2016, of which only 34 percent was oil; the majority of the production
is in the San Juan Basin. In the Delaware Basin, the non-core assets for
which sales are closed or pending largely reflect unproved leasehold of
approximately 55,000 net acres previously designated as Tier 1 or Tier
2. At December 31, 2015, proved reserves associated with all non-core
asset sales totaled approximately 55 million oil-equivalent barrels
(BOE).

“We are very pleased with the success of our non-core asset sales,”
said James McManus, Energen’s chairman and chief executive officer. “The
proceeds have exceeded our expectations and, as a result, our balance
sheet is even stronger. This position of financial strength allows us a
great deal of flexibility to pursue additional capital investment
opportunities in the Permian Basin in 2016 and 2017, including increased
drilling and development and acquisitions.

“To that end, we are increasing our capital investment in 2016 to
approximately $450 million to further build up our inventory of drilled
but uncompleted wells (DUCs) at year end,” McManus added. “Up to $130
million will now target the Delaware Basin, where we plan to drill 17-19
net DUCs in the second half of 2016. In total, we now expect to end the
year with approximately 54-58 net DUCs in the Permian Basin. [Prior
capital guidance was $350-$400 million and 37-50 net DUCs.]

“Not only does our balance sheet support the completion of these
wells in 2017 but it also places us in an excellent financial position
to undertake additional drilling and development activities in 2017.”

[See Energen’s updated investor slides for June 2016 at www.energen.com
for additional information on its balance sheet and revised 2016 capital
plans.]

With the sale of the remainder of its San Juan Basin assets, Energen has
completed its transition to a pure Permian Basin operator. Its focus is
on drilling and developing its high-quality acreage positions in the
Midland and Delaware basins, where it estimates a remaining net resource
potential of 2.0 billion BOE.

In the core Midland Basin, the company has approximately 68,500 net
acres with 2,546 net identified locations in seven horizontal
formations. After all the transactions have closed, Energen will have
approximately 42,200 net acres in the Delaware Basin in Texas and New
Mexico with 954 net identified locations in four Wolfcamp shale
formations.

The company’s primary focus in the Delaware Basin will be on bringing
forward the value on approximately 31,200 net acres in Loving and parts
of Reeves and Ward counties. On this core acreage position, the company
has identified 675 net locations, including 148 net locations with at
least 10,000 foot laterals and another 217 net locations with average
lateral lengths of 7,500 feet.

[See Energen’s updated investor slides for June 2016 at www.energen.com
for additional information on its identified inventory and resource
potential in the Delaware and Midland basins.]

The following tables update Energen’s production guidance midpoints for
the second quarter of 2016 and for calendar year 2016 to exclude all
sales-associated production (prior guidance excluded only that
production associated with assets designated as held for sale, i.e.,
eastern Texas Delaware Basin and San Juan Basin). These new midpoints
are within ranges of 53.5-54.3 mboepd in the second quarter and
52.7-53.5 mboepd in the year.

[See Energen’s updated investor slides for June 2016 at www.energen.com
for additional information on revised guidance for 2Q16 and CY16,
including revised expense guidance.]

Energen Corporation is a pure-play Permian Basin exploration and
production company focused on drilling and developing its high-quality,
oil-dominated assets in the Delaware and Midland basins. For more
information, go to www.energen.com.

FORWARD LOOKING STATEMENTS: All statements, other than statements
of historical fact, appearing in this release constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements include, among
other things, statements about our expectations, beliefs, intentions or
business strategies for the future, statements concerning our outlook
with regard to the timing and amount of future production of oil,
natural gas liquids and natural gas, price realizations, the nature and
timing of capital expenditures for exploration and development, plans
for funding operations and drilling program capital expenditures, the
timing and success of specific projects, operating costs and other
expenses, proved oil and natural gas reserves, liquidity and capital
resources, outcomes and effects of litigation, claims and disputes and
derivative activities. Forward-looking statements may include words such
as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,”
“foresee,” “intend,” “may,” “plan,” “potential,” “predict,” “project,”
“seek,” “will” or other words or expressions concerning matters that are
not historical facts. These statements involve certain risks and
uncertainties that may cause actual results to differ materially from
expectations as of the date of this news release. Except as otherwise
disclosed, the forward-looking statements do not reflect the impact of
possible or pending acquisitions, investments, divestitures or
restructurings. The absence of errors in input data, calculations and
formulas used in estimates, assumptions and forecasts cannot be
guaranteed. We base our forward-looking statements on information
currently available to us, and we undertake no obligation to correct or
update these statements whether as a result of new information, future
events or otherwise. Additional information regarding our
forward‐looking statements and related risks and uncertainties that
could affect future results of Energen, can be found in the Company’s
periodic reports filed with the Securities and Exchange Commission and
available on the Company’s website - www.energen.com.

CAUTIONARY STATEMENTS: The SEC permits oil and gas companies to
disclose in SEC filings only proved, probable and possible reserves that
meet the SEC’s definitions for such terms, and price and cost
sensitivities for such reserves, and prohibits disclosure of resources
that do not constitute such reserves. Outside of SEC filings, we use the
terms “estimated ultimate recovery” or “EUR,” reserve or resource
“potential,” “contingent resources” and other descriptions of volumes of
non-proved reserves or resources potentially recoverable through
additional drilling or recovery techniques. These estimates are
inherently more speculative than estimates of proved reserves and are
subject to substantially greater risk of actually being realized. We
have not risked EUR estimates, potential drilling locations, and
resource potential estimates. Actual locations drilled and quantities
that may be ultimately recovered may differ substantially from
estimates. We make no commitment to drill all of the drilling locations
that have been attributed these quantities. Factors affecting ultimate
recovery include the scope of our on-going drilling program, which will
be directly affected by the availability of capital, drilling, and
production costs, availability of drilling and completion services and
equipment, drilling results, lease expirations, regulatory approvals,
and geological and mechanical factors. Estimates of unproved reserves,
type/decline curves, per-well EURs, and resource potential may change
significantly as development of our oil and gas assets provides
additional data. Additionally, initial production rates contained in
this news release are subject to decline over time and should not be
regarded as reflective of sustained production levels.

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