Wednesday, energy holding company Energen Corp. (EGN) has increased its full-year 2010 guidance to $4.20 to $4.60 per share from $4.00 to $4.40 per share. The $0.20 increase in guidance is based on the company's expectation of favorable hedging contracts, lower depreciation rates and reduced income taxes.
Energen's earnings guidance assumes that commodity prices applicable to its unhedged production will average $5.50 per thousand cubic feet or Mcf for natural gas, $75 per barrel for oil and $0.81 per gallon for NGL. The company estimates that its total production in 2010 will increase approximately 3% to 114 billion cubic feet or Bcf equivalent.
Energen has hedges in place in 2010 for 75% of its estimated natural gas production of 70 Bcf at an average New York Mercantile Exchange-equivalent price of $8.03 per Mcf, 73% of its estimated oil production of 5.5 million barrels or MMBbl at an average NYMEX-equivalent price of $84.98 per barrel, and 51% of its estimated NGL production of 74.8 million gallons at an average price of $0.88 per gallon. Energen this week added 8.4 Bcf of San Juan Basin hedges at an average NYMEX-equivalent price of $5.62 per Mcf.
Consolidated after-tax cash flows in 2010 are estimated to range from $616 million to $645 million. At Energen Resources, the company's exploration and production subsidiary, 2010 after-tax cash flows are estimated to range from $538 million to $567 million. These funds will be used to finance Energen Resources' identified capital spending of approximately $310 million. Together with an estimated $30 million of cash available at year-end 2009, Energen Resources is expected to have available for discretionary investment some $258 million to $287 million. Excess cash flows may be used to fund property acquisitions and other opportunities that may arise and/or pay down debt.
However, Energen's 2010 earnings guidance does not include potential benefits from unidentified property acquisitions, Alabama shales exploration or stock repurchases.
Energen expects capital spending of $390 million, including $310 million by Energen Resources.The $310 million capital expenditure plan, includes $230 million in drilling capital, $58 million for pay-adds and surface facilities and $15 million for exploration. Subsidiary Alagasco's capital spending in 2010 is estimated to total $80 million, with some $50 million invested in normal system needs and $30 million in technology-related and other projects.
James McManus, chairman and CEO, Energen, said, "With the near-term future of natural gas prices uncertain, we are pleased to have substantial oil properties on which to focus in the coming year and have allocated approximately 75 percent of our 2010 capital spending for oil projects in the Permian Basin. Energen's activities in the Permian Basin in 2010 will focus on waterflood expansion, development of the Fuhrman-Mascho Field, Wolfberry wells and the Bone Springs oil play. We are prepared to step up development of our natural gas properties should prices rebound."
EGN is currently trading at $43.58, up $0.07 or 0.16%, on a volume of 554.74 million shares on the NYSE.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.