NEW YORK (TheStreet) -- Energen (EGN)  will likely miss Wall Street's cash flow and oil production estimates when it reports its third quarter results next week, but investors shouldn't be concerned. That's because the Alabama-based energy company is actually better positioned to defend itself against slumping oil prices than its competitors and has plans for growth.

Just ask Gabriele Sorbara, an analyst with Topeka Capital Markets, who has a "buy" rating on the stock. He notes in a research report emailed to TheStreet that although Energen will likely miss Wall Street's production estimates of 68,200 barrels of oil equivalents a day, some of that miss can be attributed to the heavy rains and flooding in the Southwest. Energen has been active in the Southwest, focusing on the highly prolific oil-producing Permian Basin in West Texas.

Additionally, Energen has been working on improving its process for getting a well ready for production, which could improve well performance. "We note that this will have a slight upward pressure on costs, but greater productivity," Sorbara said.

As for its growth plans, Energen expects to grow its liquids production at an average of 19.3% per year for the five years ending 2014, the company said in a presentation last week. Additionally, Energen said that production growth from its Permian Basin properties could cross 30% in 2015 over the previous year.

But Energen is more than just a growth story. It has also bolstered its defenses against slumping oil prices -- more so than it's competitors, Sorbara said, in an email interview with TheStreet.

While exploration and production companies "have commodity price risk and will likely scale back growth plans should oil remain" between $80 to $85 a barrel, Energen "is less exposed than peers" as the company has hedged significantly greater volumes. 

Around 51% of the company's 2015 estimated production has been hedged as compared to an average of 34% production for other exploration and production companies, as estimated by Topeka Capital Markets.

Moreover, Energen is in a better position to withstand the commodity pullback compared to its peers. Earlier this year, Energen sold its natural gas utility businesss for $1.28 billion in cash to Laclede Group (LG) . It also has the capability to further enhance its balance sheet "over the next 6-12 months" by selling some of additional assets in the San Juan Basin in New Mexico, Sorbara said. He noted these assets could be valued at between $400 million and $500 million.

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Over the last three months, oil futures for Brent and WTI have fallen by over 20% to $86 and $83 a barrel respectively, which has had an adverse impact on all energy stocks, including Energen. But company spokeswoman Julie Ryland said Energen is well positioned against its competitors, even if oil prices fall to the low $80s. 

With Energen's shares having dropped by over 30% in the past three months to close at $61.91 on Tuesday, this share price drop makes Energen an even more attractive investment, said Sorbara.

Meanwhile, in the backdrop of this oil price slump, rumors are circulating that the company could become a takeover target for a producer looking to expand into the Permian Basin. Earlier this year, Canada's Encana Corp (ECA) - Get Encana Corporation Reportacquired Energen's Permian Basin-focused peer Athlon Energy (ATHL) for $5.9 billion. Following this transaction, Sorbara has said that Energen, as well as Diamondback Energy (FANG) - Get Diamondback Energy, Inc. Report , Laredo Petroleum (LPI) - Get Laredo Petroleum, Inc. Report and Pioneer Natural Resources (PXD) - Get Pioneer Natural Resources Company Report have become "attractive takeout candidates, given their positions in the Permian Basin."

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

TheStreet Ratings team rates ENERGEN CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ENERGEN CORP (EGN) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."

You can view the full analysis from the report here: EGN Ratings Report