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, expenses related to the 2016 reductions in force, certain pension and pension settlement expenses and income and losses associated with 2016 property sales. 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 9/30/2016
Energen Net Income ($ in millions except per share data)	Net Income			Per Diluted Share
Net Income All Operations (GAAP)		53.3			0.55
Non-cash mark-to-market gains (net of $8.9 tax)		(16.1	)		(0.17	)
Asset impairment, other (net of $0.3 tax)		0.3			0.00
Reduction in force expenses (net of $0.2 tax)		0.3			0.00
Income associated with 2016 property sales (net of $32.3 tax)		(59.2	)		(0.61	)
Adjusted Income from Continuing Operations (Non-GAAP)		(21.4	)		(0.22	)
	Three Months Ended 9/30/2015
Energen Net Income ($ in millions except per share data)	Net Income			Per Diluted Share
Net Income (Loss) All Operations (GAAP)		(227.9	)		(2.89	)
Non-cash mark-to-market losses (net of $0.4 tax)		0.8			0.01
Asset impairment, other (net of $141.3 tax)		250.6			3.18
Pension and pension settlement expenses (net of $0.3 tax)		0.6			0.01
Loss associated with 2016 property sales (net of $4.7 tax)		8.3			0.11
Adjusted Income from Continuing Operations (Non-GAAP)		32.4			0.41

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 expenses related to the 2016 reductions in force, certain pension and pension settlement expenses, income and losses associated with 2016 property sales, impairment losses and certain non-cash mark-to-market derivative financial instruments. 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 9/30
($ in millions)	2016			2015
Energen Net Income (Loss) (GAAP)		53.3			(227.9	)
(Income) Loss associated with 2016 property sales, net of tax		(59.2	)		8.3
Net Income (Loss) Excluding 2016 Property Sales (Non-GAAP)		(5.9	)		(219.6	)
Interest expense		9.0			10.1
Income tax expense (benefit) *		(3.9	)		(125.7	)
Depreciation, depletion and amortization *		108.0			136.1
Accretion expense *		1.6			1.5
Exploration expense *		0.0			0.0
Adjustment for asset impairment *		0.6			391.9
Adjustment for mark-to-market (gains) losses		(25.0	)		1.2
Adjustment for reduction in force and pension and pension settlement expenses		0.5			0.9
Energen Adjusted EBITDAX from Continuing Operations (Non-GAAP)		84.8			196.4

Note: Amounts may not sum due to rounding

* Amount adjusted to exclude 2016 property sales in either current or prior period. See reconciliation to GAAP Information for the Three Months Ended 9/30/2016 and 9/30/2015.

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 2016 property sales 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 2016 Property Sales

Reconciliation to GAAP Information

(in thousands except per share and production data)	Three Months Ended September 30, 2016
	GAAP			$/BOE		2016 Property Sales			Non-GAAP			$/BOE
Revenues
Oil, natural gas liquids and natural gas sales	$	163,973				$	2,162		$	161,811
Gain (loss) on derivative instruments		20,412					—			20,412
Total Revenues		184,385					2,162			182,223
Operating Costs and Expenses
Oil, natural gas liquids and natural gas production		42,280		$	7.98		1,253			41,027		$	7.89
Production and ad valorem taxes		10,987		$	2.07		621			10,366		$	1.99
O&G Depreciation, depletion and amortization		106,989		$	20.19		215			106,774		$	20.52
FF&E Depreciation, depletion and amortization		1,178		$	0.22		—			1,178		$	0.23
Asset impairment		587					—			587
Exploration		18					6			12
General and administrative †		21,710		$	4.10		(53	)		21,763		$	4.18
Accretion of discount on asset retirement obligations		1,556					1			1,555
(Gain) loss on sale of assets and other		(91,222	)				(91,371	)		149
Total costs and expenses		94,083					(89,328	)		183,411
Operating Income (Loss)		90,302					91,490			(1,188	)
Other Income/(Expense)
Interest expense		(8,987	)				—			(8,987	)
Other income		421					12			409
Total other expense		(8,566	)				12			(8,578	)
Loss Before Income Taxes		81,736					91,502			(9,766	)
Income tax expense (benefit)		28,422					32,289			(3,867	)
Net Income (Loss)	$	53,314				$	59,213		$	(5,899	)
Diluted Earnings Per Average Common Share	$	0.55				$	0.60		$	(0.06	)
Basic earning Per Average Common Share	$	0.55				$	0.60		$	(0.06	)
Oil		3,325					30			3,295
NGL		980					22			958
Natural Gas		993					43			950
Total Production (mboe)		5,298					95			5,203
Total Production (boepd)		57,587					1,033			56,554

Note: Amounts may not sum due to rounding

† General and administrative includes $515 or $0.10 per BOE of expense related to the reductions in force

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 2016 property sales 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 2016 Property Sales

Reconciliation to GAAP Information

(in thousands except per share and production data)	Three Months Ended September 30, 2015
	GAAP			$/BOE		2016 Property Sales			Non-GAAP			$/BOE
Revenues
Oil, natural gas liquids and natural gas sales	$	188,398				$	19,758		$	168,640
Gain (loss) on derivative instruments		107,173					—			107,173
Total Revenues		295,571					19,758			275,813
Operating Costs and Expenses
Oil, natural gas liquids and natural gas production		54,598		$	9.26		7,918			46,680		$	9.22
Production and ad valorem taxes		13,366		$	2.27		1,951			11,415		$	2.25
O&G Depreciation, depletion and amortization		148,298		$	25.17		13,556			134,742		$	26.60
FF&E Depreciation, depletion and amortization		1,483		$	0.25		104			1,379		$	0.27
Asset impairment		399,394					7,548			391,846
Exploration		493					454			39
General and administrative †		23,631		$	4.01		904			22,727		$	4.49
Accretion of discount on asset retirement obligations		1,700					242			1,458
(Gain) loss on sale of assets and other		822					81			741
Total costs and expenses		643,785					32,758			611,027
Operating Income (Loss)		(348,214	)				(13,000	)		(335,214	)
Other Income/(Expense)
Interest expense		(10,084	)				—			(10,084	)
Other income		56					36			20
Total other expense		(10,028	)				36			(10,064	)
Loss Before Income Taxes		(358,242	)				(12,964	)		(345,278	)
Income tax expense (benefit)		(130,338	)				(4,665	)		(125,673	)
Net Income (Loss)	$	(227,904	)			$	(8,299	)	$	(219,605	)
Diluted Earnings Per Average Common Share	$	(2.89	)			$	(0.10	)	$	(2.79	)
Basic earning Per Average Common Share	$	(2.89	)			$	(0.10	)	$	(2.79	)
Oil		3,610					300			3,310
NGL		1,056					215			841
Natural Gas		1,227					313			914
Total Production (mboe)		5,893					828			5,065
Total Production (boepd)		64,054					9,000			55,054

Note: Amounts may not sum due to rounding

† General and administrative includes $934 or $0.18 per BOE of pension and pension settlement expense

Non-GAAP Financial Measures

Excluding production associated with certain divestments is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Energen believes excluding data associated with the 2016 property sales provides analysts and investors useful information to understand the financial performance of the company from ongoing business operations. Further, this measure is useful in comparing the company and other oil and gas producing companies operating primarily in the Permian Basin.

Energen Production Excluding 2016 Property Sales Reconciliation to GAAP Information

	Quarter Ended
	June 30, 2016
	GAAP		2016 Property Sales		Non-GAAP
Oil		3,558		238		3,320
NGL		1,067		212		855
Natural Gas		1,216		292		924
Total Production (mboe)		5,841		742		5,099
Total Production (boepd)		64,187		8,154		56,033

Energen Production Excluding 2016 Property Sales Reconciliation to GAAP Information

	Quarter Ended
	March 31, 2016
	GAAP		2016 Property Sales		Non-GAAP
Oil		3,386		327		3,059
NGL		953		197		756
Natural Gas		1,241		295		946
Total Production (mboe)		5,580		819		4,761
Total Production (boepd)		61,319		9,000		52,319

Note: Amounts may not sum due to rounding