Hedges also are in place that limit the company’s exposure to the Midland to Cushing differential to only about 40 percent of its estimated oil production in 2013. Energen Resources has hedged the WTS Midland to WTI Cushing (sour oil) differential for 3.6 million barrels of oil production at an average price of $3.03 per barrel and the WTI Midland to WTI Cushing differential for 2.8 million barrels at an average price of $1.01 per barrel.Energen’s 2013 guidance includes assumed prices applicable to Energen Resources’ unhedged oil basis differentials; on an annualized basis, these are $3.35 per barrel (sour) and $2.90 per barrel (WTI Midland to WTI Cushing). Energen estimates that 64 percent of its oil production in 2013 will be sweet.
|The company’s current hedge position for 2013 is as follows:|
|Commodity||Hedge Volumes||Estimated Production||Hedge %||NYMEX Price|
|Oil||8.9 MMBO||10.6 MMBO||84%||$ 90.95 per barrel|
|NGL||44.5 MMgal||143.4 MMgal||31%||$ 1.02 per gallon|
|Natural Gas||50.0 Bcf||72.7 Bcf||69%||$ 4.63 per Mcf*|
|*||Basin-specific contract prices for natural gas have been converted for comparability purposes to a NYMEX-equivalent price by adding to them Energen Resources’ assumed San Juan and Permian basis differentials of $0.15 per Mcf.|