Energen Raises 2017 Production Guidance on Strength of Gen 3 Frac Performance

Energen Corporation (NYSE: EGN) today announced that it is raising its
2017 production guidance on the continued strength of results from wells
completed with the Generation 3 frac design. In light of this
performance, and following an in-depth review of the company’s business
plan, strategic alternatives, and the macroeconomic backdrop of the
energy industry, the Board of Directors of Energen also announced that
it has unanimously determined that continuing to execute the company’s
business plan is the best path to enhancing shareholder value.

Energen Raises CY17 Production Guidance

As Energen successfully implements its 2017 drilling and development
program, management has continued to closely monitor results of new
wells completed with its Gen 3 frac design and has seen the production
impact on two-thirds of the second quarter. Given continued Gen 3
outperformance, the company today is raising its total 2017 production
estimate to 70.2 mboepd, or 5.9 percent higher than prior guidance. This
brings the company’s year-over-year production growth to an estimated 29
percent (prior guidance was 21 percent). Energen’s 2017 drilling and
development capital expenditure guidance remains unchanged at $850-$900
million.

“As we observe the wells turned to production in the 2^nd
quarter, we continue to achieve excellent results attributable to our
Generation 3 frac design,” said Energen Chairman and Chief Executive
Officer James McManus. “With early results from these wells, we now have
data on the impact of Gen 3 fracs in all key areas of our 2017 drilling
and development program.

“We are very excited by the performance we are achieving,” McManus said.
“Importantly, it supports our view that 2017 is a breakout year for
Energen that underscores our top-tier assets and solid execution.”

Enhancing Shareholder Value

With input from financial advisors J.P. Morgan and Tudor Pickering Holt
& Co., the Energen Board reviewed its strategic alternatives and
unanimously concluded that the best way to enhance shareholder value is
continued execution of the company’s business plan. This examination
took into consideration input from numerous shareholders and analyzed
Energen’s top-tier assets, its improving execution, and the broader
macroeconomic and commodity price environment.

“Over the last several years, Energen has taken decisive actions to
reduce leverage, enhance operating margins, and position the company as
a pure-play Permian Basin oil and gas exploration and production
company,” said McManus. “At the same time, we have remained focused on
further optimization of well performance and returns through continued
evolution of frac designs and well spacing across multiple formations.
We continue to drive enhanced returns through operational efficiency, as
demonstrated by significant declines in our per-unit expenses.

“With a high-quality asset base, a strong balance sheet, and an
experienced and capable workforce, Energen is well-positioned for growth
and shareholder value creation,” McManus added. “Energen is committed to
maintaining both a robust dialogue with its shareholders and an open
mind with respect to value creation opportunities, now and in the
future.”

CY17 Quarterly Guidance

The largest increase in quarterly guidance is approximately 14% in 2Q17,
the quarter in which 41 gross and net horizontal, operated wells
completed with Gen 3 fracs are estimated to be turned to production; in
quarters 3 and 4, approximately 30 gross/29 net wells and 32 gross/26
net wells, respectively, are estimated to be turned to production.
Energen’s 4Q17 exit rate is now estimated to be 53 percent higher than
the 4Q16 exit rate; prior guidance was 47 percent.

Energen Corporation is an oil-focused exploration and production
company with operations in the Permian Basin in west Texas and New
Mexico. 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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