Energen (EGN) 8-K Results of Operations and Financial Condition

EXHIBIT 99.2

CONSOLIDATED STATEMENTSOF INCOME (UNAUDITED)

For the 3 months ending September 30, 2012 and 2011

	3rd Quarter
(in thousands, except per share data)	2012		2011		Change
Operating Revenues
Oil and gas operations	$	233,515	$	318,952	$	(85,437)
Natural gas distribution		61,809		59,616		2,193
Total operating revenues		295,324		378,568		(83,244)
Operating Expenses
Cost of gas		20,924		21,748		(824)
Operations and maintenance		128,587		111,749		16,838
Depreciation, depletion and amortization		104,338		72,802		31,536
Taxes, other than income taxes		20,110		20,129		(19)
Accretion expense		1,907		1,728		179
Total operating expenses		275,866		228,156		47,710
Operating Income		19,458		150,412		(130,954)
Other Income (Expense)
Interest expense		(17,198)		(11,976)		(5,222)
Other income		1,523		619		904
Other expense		(84)		(2,074)		1,990
Total other expense		(15,759)		(13,431)		(2,328)
Income Before Income Taxes		3,699		136,981		(133,282)
Income tax expense		1,653		49,382		(47,729)
Net Income	$	2,046	$	87,599	$	(85,553)
Diluted Earnings Per Average Common Share	$	0.03	$	1.21	$	(1.18)
Basic Earnings Per Average Common Share	$	0.03	$	1.22	$	(1.19)
Diluted Avg. Common Shares Outstanding		72,316		72,375		(59)
Basic Avg. Common Shares Outstanding		72,130		72,068		62
Dividends Per Common Share	$	0.14	$	0.135	$	0.005

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CONSOLIDATED STATEMENTSOF INCOME (UNAUDITED)

For the 9 months ending September 30, 2012 and 2011

	Year-to-date
(in thousands, except per share data)	2012		2011		Change
Operating Revenues
Oil and gas operations	$	856,940	$	779,834	$	77,106
Natural gas distribution		327,183		415,497		(88,314)
Total operating revenues		1,184,123		1,195,331		(11,208)
Operating Expenses
Cost of gas		94,179		185,916		(91,737)
Operations and maintenance		351,861		318,763		33,098
Depreciation, depletion and amortization		300,863		199,559		101,304
Asset impairment		21,545		—		21,545
Taxes, other than income taxes		65,868		69,399		(3,531)
Accretion expense		5,581		5,066		515
Total operating expenses		839,897		778,703		61,194
Operating Income		344,226		416,628		(72,402)
Other Income (Expense)
Interest expense		(48,458)		(30,843)		(17,615)
Other income		3,740		1,727		2,013
Other expense		(305)		(1,449)		1,144
Total other expense		(45,023)		(30,565)		(14,458)
Income Before Income Taxes		299,203		386,063		(86,860)
Income tax expense		108,464		140,871		(32,407)
Net Income	$	190,739	$	245,192	$	(54,453)
Diluted Earnings Per Average Common Share	$	2.64	$	3.39	$	(0.75)
Basic Earnings Per Average Common Share	$	2.64	$	3.40	$	(0.76)
Diluted Avg. Common Shares Outstanding		72,301		72,409		(108)
Basic Avg. Common Shares Outstanding		72,121		72,045		76
Dividends Per Common Share	$	0.42	$	0.405	$	0.015

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CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As of September 30, 2012 and December 31, 2011

(in thousands)	September 30, 2012			December 31, 2011
ASSETS
Current Assets
Cash and cash equivalents	$	47,137		$	9,541
Accounts receivable, net of allowance		194,473			231,925
Inventories		73,950			74,012
Regulatory asset		56,188			57,143
Other		55,517			71,547
Total current assets		427,265			444,168
Property, Plant and Equipment
Oil and gas properties, net		4,448,844			3,783,842
Utility plant, net		835,175			813,428
Other property, net		23,953			23,506
Total property, plant and equipment, net		5,307,972			4,620,776
Other Assets
Regulatory asset		94,869			95,633
Long-term derivative instruments		43,137			31,056
Other		46,586			45,783
Total other assets		184,592			172,472
TOTAL ASSETS	$	5,919,829		$	5,237,416
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Long-term debt due within one year	$	—		$	1,000
Notes payable to banks		480,000			15,000
Accounts payable		264,930			302,048
Regulatory liability		27,372			58,279
Other		190,929			167,552
Total current liabilities		963,231			543,879
Long-term debt		1,153,591			1,153,700
Deferred Credits and Other Liabilities
Regulatory liability		77,692			87,234
Deferred income taxes		885,839			806,127
Long-term derivative instruments		11,110	��		34,663
Other		207,277			179,650
Total deferred credits and other liabilities		1,181,918			1,107,674
Total Shareholders’ Equity		2,621,089			2,432,163
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,919,829		$	5,237,416

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SELECTED BUSINESS SEGMENT DATA (UNAUDITED)

For the 3 months ending September 30, 2012 and 2011

	3rd Quarter
(in thousands, except sales price data)	2012		2011		Change
Oil and Gas Operations (GAAP)
Operating revenues
Natural gas	$	67,542	$	96,604	$	(29,062)
Oil		148,004		197,636		(49,632)
Natural gas liquids		17,566		24,476		(6,910)
Other		403		236		167
Total (GAAP)	$	233,515	$	318,952	$	(85,437)
Oil and Gas Operations excluding mark-to-market (Non-GAAP)
Operating revenues
Natural gas	$	71,701	$	96,604	$	(24,903)
Oil		188,573		144,505		44,068
Natural gas liquids		19,590		24,381		(4,791)
Other		403		236		167
Total (Non-GAAP)*	$	280,267	$	265,726	$	14,541
Production volumes
Natural gas (MMcf)		18,882		17,796		1,086
Oil (MBbl)		2,279		1,709		570
Natural gas liquids (MMgal)		25.2		24.3		0.90
Total production volumes (MMcfe)		36,156		31,518		4,638
Total production volumes (MBOE)		6,026		5,253		773
Revenue per unit of production including effects of designated cash flow hedges
Natural gas (Mcf)	$	3.80	$	5.43	$	(1.63)
Oil (barrel)	$	82.74	$	84.56	$	(1.82)
Natural gas liquids (gallon)	$	0.78	$	1.00	$	(0.22)
Revenue per unit of production excluding effects of all derivative instruments
Natural gas (Mcf)	$	2.72	$	4.11	$	(1.39)
Oil (barrel)	$	86.53	$	86.17	$	0.36
Natural gas liquids (gallon)	$	0.68	$	1.17	$	(0.49)
Other data
Lease operating expense (LOE)
LOE and other	$	63,731	$	54,563	$	9,168
Production taxes		14,069		14,367		(298)
Total	$	77,800	$	68,930	$	8,870
Depreciation, depletion and amortization	$	93,766	$	62,822	$	30,944
General and administrative expense	$	16,989	$	13,366	$	3,623
Capital expenditures	$	323,037	$	266,745	$	56,292
Exploration expenditures	$	10,646	$	10,775	$	(129)
Operating income	$	32,407	$	161,331	$	(128,924)

    *Operating revenues excluding mark-to-market losses of $46,752 and gains of $53,226 in third quarter 2012 and 2011, respectively.

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Natural Gas Distribution
Operating revenues
Residential	$	30,658	$	30,541	$	117
Commercial and industrial		17,695		16,984		711
Transportation		13,505		12,114		1,391
Other		(49)		(23)		(26)
Total	$	61,809	$	59,616	$	2,193
Gas delivery volumes (MMcf)
Residential		1,378		1,385		(7)
Commercial and industrial		1,246		1,181		65
Transportation		11,252		10,004		1,248
Total		13,876		12,570		1,306
Other data
Depreciation and amortization	$	10,572	$	9,980	$	592
Capital expenditures	$	18,813	$	21,333	$	(2,520)
Operating loss	$	(12,743)	$	(10,681)	$	(2,062)

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SELECTED BUSINESS SEGMENT DATA (UNAUDITED)

For the 9 months ending September 30, 2012 and 2011

	Year-to-date
(in thousands, except sales price data)	2012		2011		Change
Oil and Gas Operations (GAAP)
Operating revenues
Natural gas	$	211,371	$	290,240	$	(78,869)
Oil		579,278		419,830		159,448
Natural gas liquids		64,970		63,491		1,479
Other		1,321		6,273		(4,952)
Total (GAAP)	$	856,940	$	779,834	$	77,106
Oil and Gas Operations excluding mark-to-market (Non-GAAP)
Operating revenues
Natural gas	$	215,492	$	290,240	$	(74,748)
Oil		542,923		366,700		176,223
Natural gas liquids		63,169		63,396		(227)
Other		1,321		6,273		(4,952)
Total (Non-GAAP)*	$	822,905	$	726,609	$	96,296
Production volumes
Natural gas (MMcf)		57,252		52,908		4,344
Oil (MBbl)		6,427		4,574		1,853
Natural gas liquids (MMgal)		79.0		66.6		12.4
Total production volumes (MMcfe)		107,100		89,868		17,232
Total production volumes (MBOE)		17,850		14,978		2,872
Revenue per unit of production including effects of designated cash flow hedges
Natural gas (Mcf)	$	3.76	$	5.49	$	(1.73)
Oil (barrel)	$	84.48	$	80.17	$	4.31
Natural gas liquids (gallon)	$	0.80	$	0.95	$	(0.15)
Revenue per unit of production excluding effects of all derivative instruments
Natural gas (Mcf)	$	2.53	$	4.10	$	(1.57)
Oil (barrel)	$	89.91	$	90.40	$	(0.49)
Natural gas liquids (gallon)	$	0.78	$	1.11	$	(0.33)
Other data
Lease operating expense (LOE)
LOE and other	$	179,122	$	152,220	$	26,902
Production taxes		41,436		40,842		594
Total	$	220,558	$	193,062	$	27,496
Depreciation, depletion and amortization	$	269,312	$	169,953	$	99,359
Asset impairment	$	21,545	$	—	$	21,545
General and administrative expense	$	51,739	$	47,349	$	4,390
Capital expenditures	$	957,913	$	666,601	$	291,312
Exploration expenditures	$	13,387	$	12,596	$	791
Operating income	$	274,818	$	351,808	$	(76,990)

    *Operating revenues excluding mark-to-market gains of $34,035 and $53,225 in 2012 and 2011, respectively.

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Natural Gas Distribution
Operating revenues
Residential	$	201,537	$	269,584	$	(68,047)
Commercial and industrial		84,889		107,283		(22,394)
Transportation		42,765		40,568		2,197
Other		(2,008)		(1,938)		(70)
Total	$	327,183	$	415,497	$	(88,314)
Gas delivery volumes (MMcf)
Residential		11,601		16,725		(5,124)
Commercial and industrial		6,137		7,843		(1,706)
Transportation		34,835		33,713		1,122
Total		52,573		58,281		(5,708)
Other data
Depreciation and amortization	$	31,551	$	29,606	$	1,945
Capital expenditures	$	51,786	$	57,170	$	(5,384)
Operating income	$	70,265	$	65,541	$	4,724

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