Energen (EGN) 8-K Energen Reports First Quarter 2012 Operatingand Financial Results

Exhibit 99.3

Non-GAAP Financial Measures

The United States Securities and Exchange Commission requires public companies, such as Energen Corporation (the Company), to reconcile Non-GAAP (GAAP refers to generally accepted accounting principles) financial measures to related GAAP measures. Adjusted Net Income is a Non-GAAP financial measure which excludes certain non-cash mark-to-market derivative financial instruments and a commodity price-related write-down of natural gas properties. 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.

	Year-to-Date Ended 3/31/2012
Consolidated Net Income ($ in millions except per share data)	Net Income		Per Diluted Share
Net Income (GAAP)		57.4		0.79
Non-cash mark-to-market losses (net of $15.4 tax)		25.3		0.35
Non-cash write-down of natural gas properties (net of $8.1 tax)		13.4		0.19
Adjusted Net Income (Non-GAAP)		96.1		1.33

	Year-to-Date Ended 3/31/2012
Energen Resources Net Income ($ in millions)	Net Income
Net Income (GAAP)		9.5
Non-cash mark-to-market losses (net of $15.4 tax)		25.3
Non-cash write-down of natural gas properties (net of $8.1 tax)		13.4
Adjusted Net Income (Non-GAAP)		48.2

Non-GAAP Financial Measures

The United States Securities and Exchange Commission requires public companies, such as Energen Corporation (the Company), to reconcile Non-GAAP (GAAP refers to generally accepted accounting principles) financial measures to related GAAP measures. Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a Non-GAAP financial measure. Energen believes this measure allows analysts and investors to understand the financial performance of the company by computing earnings from core business operations, without including the effects of capital structure, tax rates and depreciation. Further, this measure is useful in comparing profitability between the company and other oil and gas producing companies. Adjusted EBITA excludes certain non-cash mark-to-market derivative financial instruments and a commodity price-related write-down of natural gas properties.

	Year-to-Date Ended 3/31
Reconciliation To GAAP Information ($ in millions)	2011		2012
Consolidated Net Income (GAAP)		94.3		57.4
Interest expense		9.4		15.4
Income tax expense		57.3		33.3
Depreciation, depletion and amortization		61.1		94.5
EBITDA (Non-GAAP)		222.1		200.6
Adjustment for asset impairment		—		21.5
Adjustment for mark-to-market losses		—		40.7
Consolidated Adjusted EBITDA (Non-GAAP)		222.1		262.8

	Year-to-Date Ended 3/31
Reconciliation To GAAP Information ($ in millions)	2011		2012
Energen Resources Net Income (GAAP)		49.7		9.5
Interest expense		5.9		11.5
Income tax expense		29.9		6.0
Depreciation, depletion and amortization		51.4		84.1
Energen Resources EBITDA (Non-GAAP)		136.9		111.1
Adjustment for asset impairment		—		21.5
Adjustment for mark-to-market losses		—		40.7
Energen Resources Adjusted EBITDA (Non-GAAP)		136.9		173.3

Non-GAAP Financial Measures

The United States Securities and Exchange Commission requires public companies, such as Energen Corporation (the Company), to reconcile Non-GAAP (GAAP refers to generally accepted accounting principles) financial measures to related GAAP measures. After-tax Cash Flows is a Non-GAAP financial measure. Energen believes after-tax cash flows are relevant because they are a measure of cash available to fund the Company’s capital expenditures, dividends, debt reduction, and other investments.

Reconciliation To GAAP Information ($ in millions)	Years Ended 12/31
	2010 Actual			2011 Actual		2012 Estimate (e)
Consolidated Net Income (Before asset impairment)		291			260		235		264
Asset impairment		—			—		(14	)	(14	)
Consolidated Net Income (GAAP)		291			260		221		250
Depreciation, depletion and amortization (Including asset impairment)		248			284		461		461
Deferred income taxes, net		134			129		113		113
After-tax Cash Flows (Non-GAAP)		673			673		795		824
Changes in assets and liabilities and other adjustments		(2	)		89		15		15
Net Cash Provided by Operating Activities (GAAP)		671			762		810		839

Reconciliation To GAAP Information ($ in millions)	Years Ended 12/31
	2010 Actual			2011 Actual			2012 Estimate (e)
Net Cash Provided by Operating Activities (GAAP)		671			762			810		839
Changes in assets and liabilities and other adjustments		(69	)		25			(15	)	(15	)
After-tax Cash Flow (Non-GAAP)		602			787			795		824
Less: AGC cash flows from operations and other		(94	)		(107	)		(101	)	(101	)
Adj. Cash Flows from Operations Excluding Alagasco (Non-GAAP)		508			680			694		723

(e) This estimate is a “forward-looking statement” as defined by the Securities and Exchange Commission. 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 discussion of risks and uncertainties, which could affect future results of Energen and its subsidiaries, is included in the Company’s periodic reports filed with the Securities and Exchange Commission.