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

Exhibit 99.3

Non-GAAP Financial Measures

Adjusted Net Income is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles) which excludes the effects of certain non-cash mark-to-market derivative financial instruments. Adjusted income from continuing operations further excludes impairment losses, certain pension and pension settlement expenses and losses associated with a current period reduction in force and held for sale assets including the San Juan divestment (completed in the first quarter of 2015). 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.

	Three Months Ended 3/31/2016
Energen Net Income ($ in millions except per share data)	Net Income			Per Diluted Share
Net Income (Loss) All Operations (GAAP)		(203.1	)		(2.34	)
Non-cash mark-to-market losses (net of $0.1 tax)		0.2			0.00
Asset impairment, other (net of $78.5 tax)		141.5			1.63
Pension settlement expenses (net of $1.2 tax)		2.2			0.02
Loss associated with reduction in force / held for sale properties (net of $2.1 tax)		3.7			0.04
Adjusted Income from Continuing Operations (Non-GAAP)		(55.5	)		(0.64	)
	Three Months Ended 3/31/2015
Energen Net Income ($ in millions except per share data)	Net Income			Per Diluted Share
Net Income (Loss) All Operations (GAAP)		(15.4	)		(0.21	)
Non-cash mark-to-market losses (net of $21.3 tax)		38.4			0.53
Asset impairment, other (net of $2.4 tax)		4.2			0.06
Pension and pension settlement expenses (net of $1.1 tax)		2.0			0.03
Income associated with held for sale properties (net of $13.4 tax)		(22.3	)		(0.31	)
Adjusted Income from Continuing Operations (Non-GAAP)		6.8			0.09

Note: Amounts may not sum due to rounding

Non-GAAP Financial Measures

Earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses (EBITDAX) is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Adjusted EBITDAX from continuing operations further excludes losses associated with a current period reduction in force and held for sale assets including the San Juan divestment (completed in the first quarter of 2015), impairment losses, certain non-cash mark-to-market derivative financial instruments and certain pension and pension settlement expenses. Energen believes these measures allow analysts and investors to understand the financial performance of the company from core business operations, without including the effects of capital structure, tax rates and depreciation. Further, this measure is useful in comparing the company and other oil and gas producing companies.

Reconciliation To GAAP Information	Three Months Ended 3/31
($ in millions)	2016			2015
Energen Net Income (Loss) (GAAP)		(203.1	)		(15.4	)
(Income) Loss associated with reduction in force / held for sale properties, net of tax		3.7			(22.3	)
Adjusted Net Income from Continuing Operations (Non-GAAP)		(199.4	)		(37.7	)
Interest expense		9.8			11.8
Income tax expense (benefit) *		(106.3	)		(22.1	)
Depreciation, depletion and amortization *		114.8			120.6
Accretion expense *		1.5			1.4
Exploration expense *		0.2			0.7
Adjustment for asset impairment		220.0			6.6
Adjustment for mark-to-market losses *		0.3			59.7
Adjustment for pension and pension settlement expenses		3.3			3.1
Energen Adjusted EBITDAX from Continuing Operations (Non-GAAP)		44.2			143.9

Note: Amounts may not sum due to rounding

* Amount adjusted to exclude held for sale assets in either current or prior period. See reconciliation to GAAP Information for the Three Months Ended 3/31/2016 and 3/31/2015.

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Non-GAAP Financial Measures

The consolidated statement of income excluding certain divestments is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Energen believes excluding information associated with a reduction in force and held for sale assets including the divestment of assets held in the San Juan Basin (completed in the first quarter of 2015) provides analysts and investors useful information to understand the financial performance of the company from ongoing business operations. Further, this information is useful in comparing the company and other oil and gas producing companies operating primarily in the Permian Basin.

Energen Net Income (Loss) Excluding RIF* and Held for Sale Assets Reconciliation to GAAP Information	Three Months Ended March 31, 2016
(in thousands except per share and production data)	GAAP			$/BOE		RIF* / Held for Sale			Non-GAAP			$/BOE
Revenues
Oil, natural gas liquids and natural gas sales	$	122,764				$	10,117		$	112,647
Gain (loss) on derivative instruments		5,455				$	—			5,455
Total Revenues		128,219					10,117			118,102
Operating Costs and Expenses
Oil, natural gas liquids and natural gas production		47,727		$	8.55		5,780			41,947		$	8.51
Production and ad valorem taxes		11,170		$	2.00		1,246			9,924		$	2.01
O&G Depreciation, depletion and amortization		118,020		$	21.15		4,575			113,445		$	23.02
FF&E Depreciation, depletion and amortization		1,342		$	0.24		—			1,342		$	0.27
Asset impairment		220,025					—			220,025
Exploration		242					59			183
General and administrative †		29,525		$	5.29	£	3,884			25,641		$	5.20
Accretion of discount on asset retirement obligations		1,757					239			1,518
(Gain) loss on sale of assets and other		222					142			80
Total costs and expenses		430,030					15,925			414,105
Operating Income (Loss)		(301,811	)				(5,808	)		(296,003	)
Other Income/(Expense)
Interest Expense		(9,833	)				—			(9,833	)
Other income		95					—			95
Total other expense		(9,738	)				—			(9,738	)
Loss Before Income Taxes		(311,549	)				(5,808	)		(305,741	)
Income tax expense (benefit)		(108,433	)				(2,091	)		(106,342	)
Net Income (Loss)	$	(203,116	)			$	(3,717	)	$	(199,399	)
Diluted Earnings Per Average Common Share	$	(2.34	)			$	(0.04	)	$	(2.30	)
Basic earning Per Average Common Share	$	(2.34	)			$	(0.04	)	$	(2.30	)
Oil		3,386					247			3,139
NGL		953					159			794
Natural Gas		1,241					246			995
Total Production (mboe)		5,580					652			4,928
Total Production (boepd)		61,319					7,165			54,154

Note: Amounts may not sum due to rounding

* Reduction in Force

† General and administrative includes $3,343 or $0.68 per BOE of pension settlement expense

£ Adjustment includes $4,101 of expense related to a reduction in force

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Non-GAAP Financial Measures

The consolidated statement of income excluding certain divestments is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Energen believes excluding information associated with held for sale assets including the divestment of assets held in the San Juan Basin (completed in the first quarter of 2015) provides analysts and investors useful information to understand the financial performance of the company from ongoing business operations. Further, this information is useful in comparing the company and other oil and gas producing companies operating primarily in the Permian Basin.

Energen Net Income (Loss) Excluding Held for Sale Assets Reconciliation to GAAP Information	Three Months Ended March 31, 2015
(in thousands except per share and production data)	GAAP			$/BOE		Held for Sale			Non-GAAP			$/BOE
Revenues
Oil, natural gas liquids and natural gas sales	$	187,822				$	33,716		$	154,106
Gain (loss) on derivative instruments		34,036				$	8,369			25,667
Total Revenues		221,858					42,085			179,773
Operating Costs and Expenses
Oil, natural gas liquids and natural gas production		67,754		$	10.74		17,052			50,702		$	11.54
Production and ad valorem taxes		19,065		$	3.02		3,498			15,567		$	3.54
O&G Depreciation, depletion and amortization		132,839		$	21.06		13,638			119,201		$	27.13
FF&E Depreciation, depletion and amortization		1,542		$	0.24		153			1,389		$	0.32
Asset impairment		6,583					—			6,583
Exploration		763					60			703
General and administrative †		32,055		$	5.08		(702	)		32,757		$	7.45
Accretion of discount on asset retirement obligations		2,010					587			1,423
(Gain) loss on sale of assets and other		(28,344	)				(27,919	)		(425	)
Total costs and expenses		234,267					6,367			227,900
Operating Income (Loss)		(12,409	)				35,718			(48,127	)
Other Income/(Expense)
Interest Expense		(11,758	)				—			(11,758	)
Other income		46					—			46
Total other expense		(11,712	)				—			(11,712	)
Loss Before Income Taxes		(24,121	)				35,718			(59,839	)
Income tax expense (benefit)		(8,701	)				13,420			(22,121	)
Net Income (Loss)	$	(15,420	)			$	22,298		$	(37,718	)
Diluted Earnings Per Average Common Share	$	(0.21	)			$	0.31		$	(0.52	)
Basic earning Per Average Common Share	$	(0.21	)			$	0.31		$	(0.52	)
Oil		3,235					98			3,137
NGL		861					273			588
Natural Gas		2,213					1,544			669
Total Production (mboe)		6,309					1,915			4,394
Total Production (boepd)		70,100					21,278			48,822

Note: Amounts may not sum due to rounding

† General and administrative includes $3,050 or $0.69 per BOE of pension and pension settlement expense

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