By Birmingham Business Journal

Energen Corp.'s oil and gas exploration and production unit, Energen Resources Corp., has hedged approximately 40.5 billion cubic feet of natural gas in 2012 and 28 billion cubit feet in 2013.

Energen (NYSE: EGN) said the average New York Mercantile Exchange Inc. equivalent prices for the hedges were $5.02 per thousand cubic feet in 2012 and $5.30 per thousand cubic feet in 2013. The majority of the hedges are specific to the San Juan Basin.

These are the first natural gas hedge transactions that the company has made for 2012 and 2013. Energen utilizes commodity hedges as a means of helping protect its earnings and cash flows from commodity price volatility.

Energen also added approximately 7.5 billion cubic feet of natural gas hedges in 2011 at an average price of $4.75 per thousand cubic feet, 3.9 million gallons of natural gas liquids hedges in 2011 at an average price of $1.01 per gallon, 3.5 million gallons of NGL hedges in 2012 at an average price of 96 cents per gallon, and 846,000 barrels of oil hedges in 2014 at an average price of $89.28 per barrel.

Copyright 2011 American City Business Journals

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