Energen Benefits from Higher Commodity Prices, Production

Earnings Guidance for 2008-2009 Reaffirmed
BIRMINGHAM, Ala.--(Business Wire)--
Energen Corporation (NYSE:EGN) today announced that its oil and
gas exploration and production unit continues to benefit from higher
realized sales prices and increased production; Energen Resources
Corporation's net income for the three months ended June 30, 2008,
grew more than 5 percent year-over-year. Energen's utility operations,
however, saw its net income drop due largely to issues related to the
timing of rate recovery and to reduced customer usage. As a result,
Energen earned $66.9 million, or 93 cents per diluted share, in the
second quarter of 2008, down slightly from $67.9 million, or 94 cents
per diluted share, in the same period a year ago.

Energen today also reaffirmed its 2008 and 2009 earnings guidance
(assumes natural gas and oil prices applicable to its unhedged
production of $10 per thousand cubic feet and $100 per barrel,
respectively) and said that, as work continues on its first three test
wells, Energen Resources has increased its net shale acreage position
in Alabama to 327,000 acres.

"Our oil and gas exploration and production company continues to
perform well in 2008," said James McManus, Energen's chairman and
chief executive officer. "Energen Resources' aggregate realized sales
price for its natural gas, oil and natural gas liquids (NGL)
production increased 10 percent in the 2nd quarter over the same
period a year ago; and our 2nd quarter production was up almost 1
billion cubic feet (Bcf) equivalent, year-over-year, primarily in the
San Juan Basin where we are benefiting from new drilling and continued
development of Fruitland Coal properties.

"While the timing issues at our utility should settle out by the
end of the rate year, reduced usage remains a concern. Nevertheless,
we believe Energen is on a path leading to its 7th consecutive year of
record earnings in 2008," McManus said. Energen's earnings guidance
range for 2008 is $4.30-$4.70 per diluted share and, for 2009, is
$5.15-$5.55 per diluted share.

ALABAMA SHALES UPDATE

Energen Resources and Chesapeake Energy Corporation have drilled
their first two test wells in Alabama to total depth (approximately
10,500 and 12,500 feet). Both are located in Bibb County, southwest of
Birmingham, and await completion. The third test well is nearing
projected total depth of some 9,500 feet in Greene County (south and
west of Bibb). Target shale formations are the Conasauga and
Chattanooga.

"Energen Resources and Chesapeake are learning a lot about the
formations and concepts we are looking at in Alabama right now,"
McManus said, "but work remains before we can know with any certainty
whether one or more of these formations and concepts will be
economically viable.

"We have encountered gas in each well drilled and are now working
on proper completion techniques to help determine whether the gas from
Alabama shale formations in this area can be produced economically,"
McManus added.

SECOND QUARTER RESULTS

For the three months ended June 30, 2008, Energen's net income
totaled $66.9 million, or 93 cents per diluted share, and compares
with second quarter 2007 net income of $67.9 million, or 94 cents per
diluted share.

Energen Resources Corporation

Energen Resources' net income in the second quarter of 2008
totaled $70.6 million and compared with $66.9 million in the same
period last year. This 5.5 percent increase largely reflects higher
average realized sales prices for Energen Resources' natural gas, oil
and natural gas liquids (NGL) production as well as a 4 percent rise
in production. Negatively influencing Energen Resources' net income
were increased lease operating expense (LOE), depreciation, depletion
and amortization (DD&A) expense, exploration expense and general and
administrative (G&A) expense as well as a higher effective tax rate
due to reduced tax benefit under Section 199.

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Average Realized Sales Prices, Second Quarter Comparison

Commodity 2Q2008 2Q2007 Change
--------------------- --------------- ---------------- ---------------
Natural Gas (per Mcf) $8.25 $7.95 4%
--------------------- --------------- ---------------- ---------------
Oil (per barrel) $74.51 $64.03 16%
--------------------- --------------- ---------------- ---------------
NGL (per gallon) $1.11 $0.87 28%
--------------------- --------------- ---------------- ---------------
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Production, Second Quarter Comparison

Commodity 2Q2008 2Q2007 Change
----------------- ---------------- ----------------- -----------------
Natural Gas (Bcf) 16.4 15.7 4%
----------------- ---------------- ----------------- -----------------
Oil (MBbl) 1,006 947 6%
----------------- ---------------- ----------------- -----------------
NGL (MMgal) 18.1 19.1 (5)%
----------------- ---------------- ----------------- -----------------
Total (Bcfe) 25.0 24.1 4%
----------------- ---------------- ----------------- -----------------
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Production By Area (Bcfe), Second Quarter Comparison

Area 2Q2008 2Q2007 Change
-------------------- --------------- --------------- -----------------
San Juan Basin 12.5 11.6 8%
-------------------- --------------- --------------- -----------------
Permian Basin 7.0 7.1 (1)%
-------------------- --------------- --------------- -----------------
Black Warrior Basin 3.4 3.6 (6)%
-------------------- --------------- --------------- -----------------
N. LA/E. TX/Other 2.1 1.8 17%
-------------------- --------------- --------------- -----------------
*T

Per-unit LOE in the second quarter of 2008 increased 15 percent
from the same period a year ago to $2.52 per thousand cubic feet (Mcf)
equivalent. This increase primarily was due to a 54 percent rise in
per-unit production taxes resulting from increased commodity prices.

DD&A expense per unit in the second quarter of 2008 increased 15
percent over the same period last year to $1.25 per Mcf equivalent
(Mcfe) largely due to higher development costs.

Exploration expense in the current-year second quarter increased
$2.8 million over the same period a year ago largely due to mechanical
difficulties encountered while drilling an exploratory well in the San
Juan Basin.

Second quarter net G&A expense in 2008 rose $2.5 million over the
same period in 2007 largely due to increased net salaries and benefits
expense as the Company appropriately accrues anticipated obligations
under its performance-based incentive compensation plan.

Alabama Gas Corporation

Energen's natural gas utility, Alabama Gas Corporation (Alagasco),
reported a net loss of $3.1 million in the second quarter of 2008 as
compared with net income of $1.4 million in the same period a year
ago. This $4.5 million deficit year-over-year largely reflects timing
differences associated with rate recovery under Alagasco's
rate-setting mechanism and a decline in customer usage, partially
offset by the utility's ability to earn on a higher level of equity.

YTD 2008 RESULTS

For the six months ended June 30, 2008, Energen's net income
totaled $183.6 million, or $2.55 per diluted share, up from $171.8
million, or $2.38 per diluted share, in the first half of 2007.
Included in current-year net income is a $6.4 million gain from
Energen Resources' sale of Permian Basin properties in the first
quarter.

Energen Resources Corporation

Energen Resources' net income for the year-to-date 2008 totaled
$143.1 million and compared with $130.1 million in the same period
last year. This 10 percent increase largely reflects higher average
realized sales prices, a 3 percent rise in production and a one-time
gain from the sale of Permian Basin properties in the first quarter,
partially offset by higher LOE and DD&A expense as well as a higher
effective tax rate due to a reduced tax benefit under Section 199.

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Average Realized Sales Prices, YTD Comparison

Commodity YTD2008 YTD2007 Change
--------------------- --------------- ---------------- ---------------
Natural Gas (per Mcf) $8.11 $7.94 2%
--------------------- --------------- ---------------- ---------------
Oil (per barrel) $71.31 $61.23 16%
--------------------- --------------- ---------------- ---------------
NGL (per gallon) $1.08 $0.83 30%
--------------------- --------------- ---------------- ---------------
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Production, YTD Comparison

Commodity YTD2008 YTD2007 Change
----------------- ---------------- ----------------- -----------------
Natural Gas (Bcf) 32.8 31.2 5%
----------------- ---------------- ----------------- -----------------
Oil (MBbl) 1,950 1,873 4%
----------------- ---------------- ----------------- -----------------
NGL (MMgal) 34.9 38.0 (8)%
----------------- ---------------- ----------------- -----------------
Total (Bcfe) 49.5 47.9 3%
----------------- ---------------- ----------------- -----------------
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Production By Area (Bcfe), YTD Comparison

Area YTD2008 YTD2007 Change
------------------- ---------------- ---------------- ----------------
San Juan Basin 24.4 23.1 6%
------------------- ---------------- ---------------- ----------------
Permian Basin 13.8 13.9 (1)%
------------------- ---------------- ---------------- ----------------
Black Warrior Basin 7.0 7.3 (4)%
------------------- ---------------- ---------------- ----------------
N. LA/E. TX/Other 4.3 3.6 19%
------------------- ---------------- ---------------- ----------------
*T

Production increases in the San Juan Basin in the current
year-to-date are largely due to new drilling and continued development
of Fruitland Coal properties.

Per-unit LOE in the first six months of 2008 increased 19 percent
from the same period a year ago to $2.48 per Mcfe. This increase
largely was due to a 45 percent rise in per-unit production taxes
resulting from increased commodity prices and to increased
compression, increased workover expense, weather-related road
maintenance, and increased environmental compliance expense.

DD&A expense per unit in the year-to-date 2008 increased 13
percent over the same period last year to $1.23 per Mcfe largely due
to higher development costs.

Alabama Gas Corporation

Alagasco reported net income of $40.6 million in the first half of
2008 as compared with net income of $41.7 million in the same period a
year ago. This $1.1 million deficit year-over-year largely reflects
the utility earning on a higher level of equity and lower operations
and maintenance expense, more than offset by reduced customer usage
and timing differences associated with rate recovery.

TRAILING 12-MONTHS' RESULTS

For the 12 months ended June 30, 2008, Energen's net income
totaled $321 million, or $4.46 per diluted share, and compared with
$308.3 million, or $4.26 per diluted share, for the same period a year
ago. The prior-year period included a $34.5 million, or 48 cents per
diluted share, gain from the sale of one-half of its acreage position
in Alabama shales to Chesapeake Energy Corporation, and a $6.7
million, or 9 cents per diluted share, gain from the settlement of its
Enron bankruptcy claim. The current-year period includes a one-time,
$6.4 million, or 9 cents per diluted share, gain from the sale of
Permian Basin properties in the first quarter of 2008.

Energen Resources Corporation

Energen Resources' net income for the current-year trailing 12
months totaled $286.2 million as compared with $267.5 million in the
same period a year ago. The prior-year period included $41.2 million
of one-time gains associated with the sale of one-half of its acreage
position in Alabama shales and the settlement of its Enron bankruptcy
claim, and the current-year period includes a $6.4 million gain from
the sale of Permian Basin properties.

Energen Resources benefited in the current 12-months' period from
increased average realized sales prices and higher production,
partially offset by increased LOE and DD&A.

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Average Realized Sales Prices, T12M at June 30 Comparison

Commodity 2008 2007 Change
--------------------- --------------- ---------------- ---------------
Natural Gas (per Mcf) $7.86 $7.35 7%
--------------------- --------------- ---------------- ---------------
Oil (per barrel) $69.73 $56.03 24%
--------------------- --------------- ---------------- ---------------
NGL (per gallon) $1.01 $0.75 35%
--------------------- --------------- ---------------- ---------------
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Production, T12M at June 30 Comparison

Commodity 2008 2007 Change
----------------- ---------------- ----------------- -----------------
Natural Gas (Bcf) 65.9 63.0 5%
----------------- ---------------- ----------------- -----------------
Oil (MBbl) 3,956.0 3,686 7%
----------------- ---------------- ----------------- -----------------
NGL (MMgal) 74.1 77.6 (5)%
----------------- ---------------- ----------------- -----------------
Total (Bcfe) 100.2 96.2 4%
----------------- ---------------- ----------------- -----------------
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Per-unit LOE totaled $2.24 per Mcfe in the 12 months ending June
30, 2008, up 11 percent from $2.01 per Mcfe in the same period a year
ago; this increase largely was due to higher production taxes,
additional compression and a general rise in field service costs.

DD&A expense per unit in the 12 months ended June 30, 2008,
increased 13 percent over the same period last year from $1.06 per
Mcfe to $1.20 per Mcfe, largely due to higher development costs.

Alabama Gas Corporation

Alagasco generated net income in the 12 months ended June 30,
2008, of $35.7 million as compared with $42.2 million in the same
period a year ago.

2008 EARNINGS GUIDANCE RANGE AFFIRMED

Energen today reiterated its earnings guidance for 2008, which was
raised last month in response to the Company's raising its assumed
prices for unhedged production for the remainder of the year.
Energen's current annual guidance for 2008 is a range of $4.30 - $4.70
per diluted share.

Key assumptions in Energen's 2008 earnings guidance are:

-- Year-to-date results;

-- A hedge position that covers approximately 75 percent of
estimated production for the remainder of the year;

-- Assumed prices for unhedged natural gas, oil and NGL
production of $10 per Mcf, $100 per barrel and $1.30 per
gallon, respectively;

-- Annual production of 101 Bcfe;

-- Capital spending of approximately $430 million, including
approximately $360 million by Energen Resources and $70
million by Alagasco; the additional capital at Energen
Resources largely reflects additional drilling in the San Juan
Basin, shale lease acquisition, accelerated drilling in the
North Louisiana/East Texas area, and generally rising costs.

-- An average DD&A rate at ERC of $1.27 per Mcfe;

-- LOE at ERC, including production taxes, of $2.45 per Mcfe;

-- General and administrative expense at ERC of 55 cents per
Mcfe;

-- Alagasco's earning an estimated 12.6 percent on average equity
of approximately $311 million;

-- Average diluted shares outstanding of 72.1 million.

2008 Hedge Position Summary

Energen Resources' hedge position for the last six months of 2008
is as follows:

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Commodity Hedge Volumes 2008e Hedge % NYMEXe Price
Production
------------- ------------- ------------- ------------ ---------------
Natural Gas 25.3 Bcf 33.7 Bcf 75 % $8.77 / Mcf
------------- ------------- ------------- ------------ ---------------
Oil 1.6 MMBbl 2.2 MMBbl 76 % $70.13 / barrel
------------- ------------- ------------- ------------ ---------------
NGL 23.6 MMgal 34.5 MMgal 69 % $0.96 / gallon
------------- ------------- ------------- ------------ ---------------

Note: July actuals used where known
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Energen Resources' natural gas and oil hedge positions by type for
the last six months of 2008 are as follows:

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Natural Gas Volumes (Bcf) Assumed Differential NYMEXe Price
Hedges
--------------- --------------- -------------------- -----------------
San Juan Basin 16.0 $1.40 per Mcf $8.93 per Mcf
--------------- --------------- -------------------- -----------------
NYMEX 9.3 -- $8.50 per Mcf
--------------- --------------- -------------------- -----------------
Oil Hedges Volumes (MBbl) Assumed Differential NYMEXe Price
--------------- --------------- -------------------- -----------------
Sour Oil (WTS) 1,289 $4.88 per barrel $68.63 per barrel
--------------- --------------- -------------------- -----------------
NYMEX 351 -- $75.63 per barrel
--------------- --------------- -------------------- -----------------

Note: July actuals used where known
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Average realized oil and gas prices for Energen Resources'
production associated with NYMEX contracts as well as for unhedged
production will reflect the impact of basis differentials. Average
realized NGL prices will be net of transportation and fractionation
fees.

For production associated with basin-specific contracts, Energen
Resources will receive the contracted hedge price. Energen typically
hedges basis differentials where applicable. In the tables above, the
basin-specific contract prices were converted for comparability
purposes to a NYMEX-equivalent price by adding to them Energen
Resources' assumed basis differentials.

Earnings Sensitivities to Commodity Price Changes

Given Energen Resources' hedge position and using the price
assumptions given above for the Company's unhedged production, changes
in commodity prices over the remainder of the year are estimated to
have the following impact on Energen's 2008 earnings:

-- Every 10-cent change in the average NYMEX price of gas from
$10 represents an estimated net income impact of approximately
$295,000 (0.4 cents per diluted share).

-- Every $1.00 change in the average NYMEX price of oil from $100
per barrel represents an estimated net income impact of
approximately $230,000 (0.3 cents per diluted share).

-- Every 1-cent change in the average price of liquids from $1.30
per gallon represents an estimated net income impact of
approximately $45,000 (0.1 cents per diluted share).

Price-related events such as substantial basis differential
changes could cause earnings sensitivities to be materially different
from those outlined above.

2009 EARNINGS GUIDANCE RANGE AFFIRMED

Energen today also reiterated its earnings guidance for 2009,
which was raised last month in response to the Company's raising its
assumed prices for unhedged production. Energen's current annual
guidance for 2009 is a range of $5.15 - $5.55 per diluted share.
Energen management noted that work will begin soon on a formal 2009
budget and that, based on changing market conditions, the budget could
differ from the current model upon which guidance is based.

Key assumptions in Energen's 2009 earnings guidance are:

-- Existing hedge position covering approximately 61 percent of
estimated 2009 production;

-- Assumed prices for unhedged natural gas, oil and NGL
production of $10 per Mcf, $100 per barrel and $1.30 per
gallon, respectively;

-- Annual production of 108 Bcfe;

-- Capital spending of $340 million, including approximately $270
million by Energen Resources and $70 million by Alagasco;

-- An average DD&A rate at Energen Resources of $1.37 per Mcfe;

-- LOE at Energen Resources, including production taxes, of $2.45
per Mcfe;

-- General and administrative expense at Energen Resources of 55
cents per Mcfe;

-- Alagasco's earning within its allowed range of return on
average equity of approximately $324 million; and

-- Average diluted shares outstanding of 72.3 million.

2009 Hedge Position Summary

Energen Resources' 2009 hedge position by commodity is as follows:

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Commodity Hedge Volumes 2009e Production Hedge % NYMEXe Price
------------ ------------- ---------------- ----------- --------------
Natural Gas 43.8 Bcf 69.5 Bcf 63% $8.99/Mcf
------------ ------------- ---------------- ----------- --------------
Oil 2.7 MMBbl 4.8 MMBbl 56% $72.81/barrel
------------ ------------- ---------------- ----------- --------------
NGL 43.3 MMgal 68.0 MMgal 64% $1.15/gallon
------------ ------------- ---------------- ----------- --------------
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Energen Resources' 2009 natural gas and oil hedge positions by
hedge type are as follows:

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Natural Gas Volumes (Bcf) Assumed Differential NYMEXe Price
Hedges
---------------- -------------- -------------------- -----------------
San Juan Basin 28.4 $1.45 per Mcf $9.22 per Mcf
---------------- -------------- -------------------- -----------------
Permian Basin 1.2 $1.18 per Mcf $8.85 per Mcf
---------------- -------------- -------------------- -----------------
NYMEX 14.2 -- $8.55 per Mcf
---------------- -------------- -------------------- -----------------
Oil Hedges Volumes (MBbl) Assumed Differential NYMEXe Price
---------------- -------------- -------------------- -----------------
Sour Oil (WTS) 2,136 $5.25 per barrel $69.89 per barrel
---------------- -------------- -------------------- -----------------
NYMEX 564 -- $83.89 per barrel
---------------- -------------- -------------------- -----------------
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Average realized oil and gas prices for Energen Resources'
production associated with NYMEX contracts as well as for unhedged
production will reflect the impact of basis differentials. Average
realized NGL prices will be net of transportation and fractionation
fees.

For production associated with basin-specific contracts, Energen
Resources will receive the contracted hedge price. Energen typically
hedges basis differentials where applicable. In the tables above, the
basin-specific contract prices were converted for comparability
purposes to a NYMEX-equivalent price by adding to them Energen
Resources' assumed basis differentials.

Earnings Sensitivities to Commodity Price Changes

Given Energen Resources' current hedge position for 2009 and using
the price assumptions given above for the Company's unhedged
production, changes in commodity prices are estimated to have the
following impact on Energen's 2009 earnings:

-- Every 10-cent change in the average NYMEX price of gas from
$10 represents an estimated net income impact of approximately
$1.2 million (1.7 cents per diluted share).

-- Every $1.00 change in the average NYMEX price of oil from $100
per barrel represents an estimated net income impact of
approximately $1.2 million (1.7 cents per diluted share).

-- Every 1-cent change in the average price of liquids from $1.30
per gallon represents an estimated net income impact of
approximately $115,000 (0.2 cents per diluted share).

Price-related events such as substantial basis differential
changes could cause earnings sensitivities to be materially different
from those outlined above.

Energen's earnings guidance does not include potential benefits
from property acquisitions, Alabama shales exploration or stock
repurchases, nor does the guidance make any assumption related to the
potential impairment of capitalized unproved leasehold related to
Alabama shales (currently approximately $40 million).

Energen Corporation is a diversified energy holding company with
headquarters in Birmingham, AL. Its two lines of business are the
acquisition, development and exploration of domestic, onshore natural
gas, oil and NGL reserves and natural gas distribution in central and
north Alabama. Energen Resources has approximately 3.6 Tcfe of proved,
probable and possible reserves in the San Juan, Permian and Black
Warrior basins. Alabama Gas Corporation is the largest distributor of
natural gas in Alabama. More information is available at
http://www.energen.com.

This release contains statements expressing expectations of future
plans, objectives and performance that constitute forward-looking
statements made pursuant to the Safe Harbor provision of the Private
Securities Litigation Reform Act of 1995. Except as otherwise
disclosed, the Company's forward-looking statements do not reflect the
impact of possible or pending acquisitions, divestitures or
restructurings. We undertake no obligation to correct or update any
forward-looking statements, whether as a result of new information,
future events or otherwise. All statements based on future
expectations rather than on historical facts are forward-looking
statements that are dependent on certain events, risks and
uncertainties that could cause actual results to differ materially
from those anticipated. In addition, the Company cannot guarantee the
absence of errors in input data, calculations and formulas used in its
estimates, assumptions and forecasts. A more complete discussion of
risks and uncertainties that could affect future results of Energen
and its subsidiaries is included in the Company's periodic reports
filed with the Securities and Exchange Commission.

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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the 3 months ending June 30, 2008 and 2007

======================================================================
2nd Quarter
-------------------

(in thousands, except per share data) 2008 2007 Change
======================================================================

Operating Revenues
Oil and gas operations $231,780 $203,356 $28,424
Natural gas distribution 109,486 111,566 (2,080)
----------------------------------------------------------------------

Total operating revenues 341,266 314,922 26,344
----------------------------------------------------------------------

Operating Expenses
Cost of gas 55,869 53,358 2,511
Operations and maintenance 93,427 84,111 9,316
Depreciation, depletion and amortization 44,114 38,707 5,407
Taxes, other than income taxes 29,868 21,870 7,998
Accretion expense 1,055 971 84
----------------------------------------------------------------------

Total operating expenses 224,333 199,017 25,316
----------------------------------------------------------------------

Operating Income 116,933 115,905 1,028
----------------------------------------------------------------------

Other Income (Expense)
Interest expense (10,258) (12,016) 1,758
Other income 486 950 (464)
Other expense (452) (187) (265)
----------------------------------------------------------------------

Total other expense (10,224) (11,253) 1,029
----------------------------------------------------------------------

Income from Continuing Operations Before
Income Taxes 106,709 104,652 2,057
Income tax expense 39,831 36,749 3,082
----------------------------------------------------------------------

Income from Continuing Operations 66,878 67,903 (1,025)
----------------------------------------------------------------------

Discontinued Operations, Net of Taxes
Income from discontinued operations - - -
Gain on disposal of discontinued
operations - - -
----------------------------------------------------------------------

Income from Discontinued Operations - - -
----------------------------------------------------------------------

Net Income $ 66,878 $ 67,903 $(1,025)
======================================================================

Diluted Earnings Per Average Common Share
Continuing operations $ 0.93 $ 0.94 $ (0.01)
Discontinued operations - - -
----------------------------------------------------------------------

Net Income $ 0.93 $ 0.94 $ (0.01)
======================================================================

Basic Earnings Per Average Common Share
Continuing operations $ 0.93 $ 0.95 $ (0.02)
Discontinued operations - - -
----------------------------------------------------------------------

Net Income $ 0.93 $ 0.95 $ (0.02)
======================================================================

Diluted Avg. Common Shares Outstanding 72,055 72,249 (194)
======================================================================

Basic Avg. Common Shares Outstanding 71,585 71,592 (7)
======================================================================

Dividends Per Common Share $ 0.12 $ 0.115 $ 0.005
======================================================================
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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the 6 months ending June 30, 2008 and 2007

======================================================================
Year-to-date
-------------------

(in thousands, except per share data) 2008 2007 Change
======================================================================

Operating Revenues
Oil and gas operations $456,675 $397,389 $59,286
Natural gas distribution 406,237 410,194 (3,957)
----------------------------------------------------------------------

Total operating revenues 862,912 807,583 55,329
----------------------------------------------------------------------

Operating Expenses
Cost of gas 217,258 221,496 (4,238)
Operations and maintenance 179,979 166,154 13,825
Depreciation, depletion and amortization 86,530 76,727 9,803
Taxes, other than income taxes 64,773 52,182 12,591
Accretion expense 2,100 1,921 179
----------------------------------------------------------------------

Total operating expenses 550,640 518,480 32,160
----------------------------------------------------------------------

Operating Income 312,272 289,103 23,169
----------------------------------------------------------------------

Other Income (Expense)
Interest expense (21,380) (24,237) 2,857
Other income 730 1,511 (781)
Other expense (1,048) (382) (666)
----------------------------------------------------------------------

Total other expense (21,698) (23,108) 1,410
----------------------------------------------------------------------

Income from Continuing Operations Before
Income Taxes 290,574 265,995 24,579
Income tax expense 107,008 94,211 12,797
----------------------------------------------------------------------

Income from Continuing Operations 183,566 171,784 11,782
----------------------------------------------------------------------

Discontinued Operations, Net of Taxes
Income from discontinued operations - 1 (1)
Gain on disposal of discontinued
operations - - -
----------------------------------------------------------------------

Income from Discontinued Operations - 1 (1)
----------------------------------------------------------------------

Net Income $183,566 $171,785 $11,781
======================================================================

Diluted Earnings Per Average Common Share
Continuing operations $ 2.55 $ 2.38 $ 0.17
Discontinued operations - - -
----------------------------------------------------------------------

Net Income $ 2.55 $ 2.38 $ 0.17
======================================================================

Basic Earnings Per Average Common Share
Continuing operations $ 2.56 $ 2.40 $ 0.16
Discontinued operations - - -
----------------------------------------------------------------------

Net Income $ 2.56 $ 2.40 $ 0.16
======================================================================

Diluted Avg. Common Shares Outstanding 72,054 72,153 (99)
======================================================================

Basic Avg. Common Shares Outstanding 71,611 71,538 73
======================================================================

Dividends Per Common Share $ 0.24 $ 0.23 $ 0.01
======================================================================
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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the 12 months ending June 30, 2008 and 2007

======================================================================
Trailing 12 Months
-----------------------

(in thousands, except per share
data) 2008 2007 Change
======================================================================

Operating Revenues
Oil and gas operations $ 884,878 $ 789,234 $ 95,644
Natural gas distribution 605,511 641,819 (36,308)
----------------------------------------------------------------------

Total operating revenues 1,490,389 1,431,053 59,336
----------------------------------------------------------------------

Operating Expenses
Cost of gas 314,191 342,712 (28,521)
Operations and maintenance 347,268 315,427 31,841
Depreciation, depletion and
amortization 171,180 150,017 21,163
Taxes, other than income taxes 108,422 93,797 14,625
Accretion expense 4,127 3,730 397
----------------------------------------------------------------------

Total operating expenses 945,188 905,683 39,505
----------------------------------------------------------------------

Operating Income 545,201 525,370 19,831
----------------------------------------------------------------------

Other Income (Expense)
Interest expense (44,243) (47,346) 3,103
Other income 1,887 1,422 465
Other expense (1,625) (849) (776)
----------------------------------------------------------------------

Total other expense (43,981) (46,773) 2,792
----------------------------------------------------------------------

Income from Continuing Operations
Before Income Taxes 501,220 478,597 22,623
Income tax expense 180,226 170,393 9,833
----------------------------------------------------------------------

Income from Continuing Operations 320,994 308,204 12,790
----------------------------------------------------------------------

Discontinued Operations, Net of
Taxes
Income from discontinued operations 2 3 (1)
Gain on disposal of discontinued
operations 18 53 (35)
----------------------------------------------------------------------

Income from Discontinued Operations 20 56 (36)
----------------------------------------------------------------------

Net Income $ 321,014 $ 308,260 $ 12,754
======================================================================

Diluted Earnings Per Average Common
Share
Continuing operations $ 4.46 $ 4.26 $ 0.20
Discontinued operations - - -
----------------------------------------------------------------------

Net Income $ 4.46 $ 4.26 $ 0.20
======================================================================

Basic Earnings Per Average Common
Share
Continuing operations $ 4.48 $ 4.29 $ 0.19
Discontinued operations - 0.01 (0.01)
----------------------------------------------------------------------

Net Income $ 4.48 $ 4.30 $ 0.18
======================================================================

Diluted Avg. Common Shares
Outstanding 72,044 72,315 (271)
======================================================================

Basic Avg. Common Shares Outstanding 71,641 71,765 (124)
======================================================================

Dividends Per Common Share $ 0.47 $ 0.45 $ 0.02
======================================================================
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SELECTED BUSINESS SEGMENT DATA (UNAUDITED)
For the 3 months ending June 30, 2008 and 2007

======================================================================
2nd Quarter
------------------

(in thousands, except sales price data) 2008 2007 Change
======================================================================

Oil and Gas Operations
Operating revenues
Natural gas $135,216 $124,712 $10,504
Oil 74,928 60,615 14,313
Natural gas liquids 20,065 16,548 3,517
Other 1,571 1,481 90
----------------------------------------------------------------------

Total $231,780 $203,356 $28,424
----------------------------------------------------------------------

Production volumes from continuing
operations
Natural gas (MMcf) 16,396 15,690 706
Oil (MBbl) 1,006 947 59
Natural gas liquids (MMgal) 18.1 19.1 (1.0)

Production volumes from continuing ops.
(MMcfe) 25,022 24,099 923
Total production volumes (MMcfe) 25,022 24,099 923

Revenue per unit of production including
effects of all derivative instruments
Natural gas (Mcf) $ 8.25 $ 7.95 $ 0.30
Oil (barrel) $ 74.51 $ 64.03 $ 10.48
Natural gas liquids (gallon) $ 1.11 $ 0.87 $ 0.24

Other data from continuing operations
Lease operating expense (LOE)
LOE and other $ 41,602 $ 39,121 $ 2,481
Production taxes 21,553 13,589 7,964
----------------------------------------------------------------------

Total $ 63,155 $ 52,710 $10,445
----------------------------------------------------------------------

Depreciation, depletion and
amortization $ 31,995 $ 27,000 $ 4,995
General and administrative expense $ 13,528 $ 11,025 $ 2,503
Capital expenditures $ 98,513 $107,126 $(8,613)
Exploration expenditures $ 2,960 $ 178 $ 2,782
Operating income $119,087 $111,472 $ 7,615
======================================================================

Natural Gas Distribution
Operating revenues
Residential $ 63,711 $ 66,828 $(3,117)
Commercial and industrial 31,378 31,172 206
Transportation 11,506 11,367 139
Other 2,891 2,199 692
----------------------------------------------------------------------

Total $109,486 $111,566 $(2,080)
----------------------------------------------------------------------

Gas delivery volumes (MMcf)
Residential 3,211 3,187 24
Commercial and industrial 1,983 1,981 2
Transportation 11,264 12,197 (933)
----------------------------------------------------------------------

Total 16,458 17,365 (907)
----------------------------------------------------------------------

Other data
Depreciation and amortization $ 12,119 $ 11,707 $ 412
Capital expenditures $ 15,926 $ 16,606 $ (680)
Operating income $ (1,472) $ 4,970 $(6,442)
======================================================================
*T

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*T
SELECTED BUSINESS SEGMENT DATA (UNAUDITED)
For the 6 months ending June 30, 2008 and 2007

======================================================================
Year-to-date
-----------------

(in thousands, except sales price data) 2008 2007 Change
======================================================================

Oil and Gas Operations
Operating revenues
Natural gas $266,170 $247,937 $18,233
Oil 139,027 114,699 24,328
Natural gas liquids 37,511 31,590 5,921
Other 13,967 3,163 10,804
----------------------------------------------------------------------

Total $456,675 $397,389 $59,286
----------------------------------------------------------------------

Production volumes from continuing
operations
Natural gas (MMcf) 32,823 31,237 1,586
Oil (MBbl) 1,950 1,873 77
Natural gas liquids (MMgal) 34.9 38.0 (3.1)

Production volumes from continuing ops.
(MMcfe) 49,505 47,905 1,600
Total production volumes (MMcfe) 49,505 47,904 1,601

Revenue per unit of production including
effects of all derivative instruments
Natural gas (Mcf) $ 8.11 $ 7.94 $ 0.17
Oil (barrel) $ 71.31 $ 61.23 $ 10.08
Natural gas liquids (gallon) $ 1.08 $ 0.83 $ 0.25

Other data from continuing operations
Lease operating expense (LOE)
LOE and other $ 84,737 $ 74,530 $10,207
Production taxes 38,129 25,600 12,529
----------------------------------------------------------------------

Total $122,866 $100,130 $22,736
----------------------------------------------------------------------

Depreciation, depletion and amortization $ 62,391 $ 53,473 $ 8,918
General and administrative expense $ 25,427 $ 24,817 $ 610
Capital expenditures $172,910 $160,521 $12,389
Exploration expenditures $ 3,309 $ 275 $ 3,034
Operating income $240,582 $216,773 $23,809
======================================================================

Natural Gas Distribution
Operating revenues
Residential $263,286 $270,626 $(7,340)
Commercial and industrial 108,883 108,894 (11)
Transportation 27,009 25,934 1,075
Other 7,059 4,740 2,319
----------------------------------------------------------------------

Total $406,237 $410,194 $(3,957)
----------------------------------------------------------------------

Gas delivery volumes (MMcf)
Residential 14,742 14,766 (24)
Commercial and industrial 6,959 6,853 106
Transportation 25,561 25,617 (56)
----------------------------------------------------------------------

Total 47,262 47,236 26
----------------------------------------------------------------------

Other data
Depreciation and amortization $ 24,139 $ 23,254 $ 885
Capital expenditures $ 28,996 $ 31,573 $(2,577)
Operating income $ 73,016 $ 73,407 $ (391)
======================================================================
*T

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*T
SELECTED BUSINESS SEGMENT DATA (UNAUDITED)
For the 12 months ending June 30, 2008 and 2007

======================================================================
Trailing 12 Months
------------------

(in thousands, except sales price data) 2008 2007 Change
======================================================================

Oil and Gas Operations
Operating revenues
Natural gas $517,639 $463,219 $ 54,420
Oil 275,825 206,541 69,284
Natural gas liquids 74,544 58,364 16,180
Other 16,870 61,110 (44,240)
----------------------------------------------------------------------

Total $884,878 $789,234 $ 95,644
----------------------------------------------------------------------

Production volumes from continuing
operations
Natural gas (MMcf) 65,886 63,009 2,877
Oil (MBbl) 3,956 3,686 270
Natural gas liquids (MMgal) 74.1 77.6 (3.5)

Production volumes from continuing ops.
(MMcfe) 100,206 96,216 3,990
Total production volumes (MMcfe) 100,206 96,215 3,991

Revenue per unit of production including
effects of all derivative instruments
Natural gas (Mcf) $ 7.86 $ 7.35 $ 0.51
Oil (barrel) $ 69.73 $ 56.03 $ 13.70
Natural gas liquids (gallon) $ 1.01 $ 0.75 $ 0.26

Other data
Lease operating expense (LOE)
LOE and other $158,487 $143,899 $ 14,588
Production taxes 66,327 49,257 17,070
----------------------------------------------------------------------

Total $224,814 $193,156 $ 31,658
----------------------------------------------------------------------

Depreciation, depletion and
amortization $123,159 $104,198 $ 18,961
General and administrative expense $ 51,474 $ 38,975 $ 12,499
Capital expenditures $391,868 $324,642 $ 67,226
Exploration expenditures $ 5,928 $ 2,930 $ 2,998
Operating income $475,376 $446,245 $ 29,131
======================================================================

Natural Gas Distribution
Operating revenues
Residential $380,951 $410,691 $(29,740)
Commercial and industrial 164,892 173,381 (8,489)
Transportation 50,330 48,888 1,442
Other 9,338 8,859 479
----------------------------------------------------------------------

Total $605,511 $641,819 $(36,308)
----------------------------------------------------------------------

Gas delivery volumes (MMcf)
Residential 20,641 22,096 (1,455)
Commercial and industrial 10,699 11,054 (355)
Transportation 51,391 51,429 (38)
----------------------------------------------------------------------

Total 82,731 84,579 (1,848)
----------------------------------------------------------------------

Other data
Depreciation and amortization $ 48,021 $ 45,819 $ 2,202
Capital expenditures $ 56,285 $ 67,295 $(11,010)
Operating income $ 72,351 $ 81,243 $ (8,892)
======================================================================
*T

Energen Corporation
Julie S. Ryland, 205-326-8421

Copyright Business Wire 2008