Energen updates oil production impact of Permian Basin ice storms

Source:Energen Corporation

Energen updates oil production impact of Permian Basin ice storms Energen Corporation (NYSE: EGN) today updated the estimated production impacts of two fourth quarter 2013 ice storms in the Permian Basin. Direct and indirect impacts of the storms in the fourth quarter are estimated to be 200,000-250,000 barrels of oil equivalents (BOE). The company’s prior guidance range for production from continuing operations for the calendar year 2013 was 23.4-23.8 million barrels of oil equivalents (MMBOE), with a midpoint of 23.6 MMBOE; and the previously implied guidance for 4th quarter production from continuing operations was 6.1-6.5 MMBOE, with a midpoint of 6.3 MMBOE.

Lease operating expense, marketing, and transportation (LOE) is estimated to be higher-than-previously anticipated due to the ice storms; and, ultimately, the severe weather will negatively affect fourth quarter and calendar year 2013 earnings. The ice storms alone are likely to cause 2013 income from continuing operations (excluding mark-to-market and disposal gains or losses) to fall near the low end of the company’s prior guidance range of $3.05-$3.25 per diluted share. The company plans to disclose its 4th quarter and calendar year 2013 financial and operating results on February 11, after market close.

While all the company’s areas of operation in the Permian Basin were impacted, Energen’s Midland Basin operations bore the brunt of the ice storm’s direct impacts; these included widespread power outages, limited access to production and drilling facilities, and frozen facilities. Indirect impacts -- such as wellhead inventory draws and delays in completions, pump installations and well hook-ups -- were experienced in the Delaware Basin as well as the Midland Basin.

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