SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___ TO ___
Commission IRS Employer
File State of Identification
Number Registrant Incorporation Number
1-7810 Energen Corporation Alabama 63-0757759
2-38960 Alabama Gas Corporation Alabama 63-0022000
2101 Sixth Avenue North
Birmingham, Alabama 35203
Telephone Number 205/326-2700
Alabama Gas Corporation, a wholly owned subsidiary of Energen Corporation,
meets the conditions set forth in General Instruction H(1)(a) and (b) of
Form 10-Q and is therefore filing this Form with reduced disclosure
format pursuant to General Instruction H(2).
Indicate by a check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrants were required to file such reports), and (2) have been
subject to such filing requirements for the past 90 days. YES X NO ____
Indicate the number of shares outstanding of each of the issuers' classes of
common stock, as of August 6, 1994:
Energen Corporation, $0.01 par value 10,915,904 shares
Alabama Gas Corporation, $0.01 par value 1,972,052 shares
<PAGE>
ENERGEN CORPORATION AND ALABAMA GAS CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1994
TABLE OF CONTENTS
Page
PART I: FINANCIAL INFORMATION (Unaudited)
Item 1. Financial Statements
(a) Consolidated Statements of Income of Energen Corporation 4
(b) Consolidated Balance Sheets of Energen Corporation 5
(c) Consolidated Statements of Cash Flows of Energen Corporation 7
(d) Statements of Income of Alabama Gas Corporation 8
(e) Balance Sheets of Alabama Gas Corporation 9
(f) Statements of Cash Flows of Alabama Gas Corporation 11
(g) Notes to Unaudited Financial Statements 12
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 14
Selected Business Segment Data of Energen Corporation 17
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 19
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<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
Energen Corporation and Subsidiaries
(Unaudited)
<CAPTION>
Three months ended Nine months ended
June 30, June 30,
(in thousands, except share data) 1994 1993 1994 1993
<S> <C> <C> <C> <C>
Operating Revenues
Natural gas distribution $ 66,070 $ 69,452 $ 303,331 $ 288,632
Oil and gas production activities 6,414 4,932 18,785 14,810
Other 2,477 2,948 13,286 11,655
Intercompany eliminations (1,836) (2,008) (6,271) (6,019)
Total operating revenues 73,125 75,324 329,131 309,078
Operating Expenses
Cost of gas 30,669 36,557 167,955 163,543
Operations 23,180 21,603 70,020 63,144
Maintenance 2,490 2,281 7,179 7,017
Depreciation, depletion and amortization 7,029 6,353 20,536 18,540
Taxes, other than income taxes 5,432 5,549 23,033 21,620
Total operating expenses 68,800 72,343 288,723 273,864
Operating Income 4,325 2,981 40,408 35,214
Other Income (Expense)
Interest expense, net of
amounts capitalized (2,837) (2,649) (8,582) (7,982)
Dividends on preferred stock of subsidiary (21) (63)
Gain on sale of assets 2,142 2,142
Other, net 2,403 591 3,247 1,584
Total other income (expense) 1,708 (2,079) (3,193) (6,461)
Income Before Income Taxes 6,033 902 37,215 28,753
Income taxes 2,083 (179) 8,773 5,057
Net Income $ 3,950 $ 1,081 $ 28,442 $23,696
Earnings Per Average Common Share $ 0.36 $ 0.11 $ 2.63 $ 2.32
Dividends Per Common Share $ 0.27 $ 0.26 $ 0.81 $ 0.78
Average Common Shares Outstanding 10,917 10,255 10,806 10,216
The accompanying Notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
Energen Corporation and Subsidiaries
(Unaudited)
<CAPTION>
June 30, September 30,
(in thousands) 1994 1993
<S> <C> <C>
ASSETS
Property, Plant and Equipment
Utility plant $448,328 $429,115
Less accumulated depreciation 227,208 215,892
Utility plant, net 221,120 213,223
Oil and gas properties,
successful efforts method 89,570 86,077
Less accumulated depreciation,
depletion and amortization 40,578 35,150
Oil and gas properties, net 48,992 50,927
Other property net 5,377 8,947
Total property, plant and equipment, net 275,489 273,097
Current Assets
Cash and cash equivalents 56,489 15,008
Accounts receivable, net of allowance
for doubtful accounts of $2,027 at
June 30, 1994 and $1,927 at
September 30, 1993 24,888 36,181
Inventories, at average cost
Storage gas 18,466
Materials and supplies 8,027 8,957
Liquified natural gas in storage 3,167 3,636
Deferred gas costs 1,713 2,966
Deferred income taxes 10,255 4,090
Prepayments and other 2,741 4,034
Total current assets 125,746 74,872
Other Assets
Notes receivable 4,691 6,798
Deferred charges and other 10,993 15,918
Total other assets 15,684 22,716
TOTAL ASSETS $416,919 $370,685
The accompanying Notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
Energen Corporation and Subsidiaries
(Unaudited)
<CAPTION>
June 30, September 30,
(in thousands) 1994 1993
<S> <C> <C>
CAPITAL AND LIABILITIES
Capitalization
Preferred stock, cumulative $0.01 par
value, 5,000,000 shares authorized $ $
Common shareholders' equity
Common stock, $0.01 par value; 30,000,000
shares authorized 10,917,355 shares
outstanding at June 30, 1994, and
10,320,317 shares outstanding at
September 30, 1993 109 103
Premium on capital stock 81,063 66,368
Capital surplus 2,802 2,802
Retained earnings 90,791 71,040
Treasury stock at cost; 2,000 shares (44)
Total common shareholders' equity 174,721 140,313
Long-term debt 125,760 85,852
Total capitalization 300,481 226,165
Current Liabilities
Long-term debt due within one year 4,593 5,043
Notes payable to banks 40,000
Accounts payable 19,567 27,609
Accrued taxes 20,815 9,656
Customers' deposits 17,258 16,719
Amounts due customers 10,547 5,105
Accrued wages and benefits 10,354 8,054
Other 15,421 13,232
Total current liabilities 98,555 125,418
Deferred Credits and Other Liabilities
Deferred income taxes 564 480
Accumulated deferred investment tax credits 4,712 5,077
Other 12,607 13,545
Total deferred credits and other
liabilities 17,883 19,102
Commitments and Contingencies
TOTAL CAPITAL AND LIABILITIES $416,919 $370,685
The accompanying Notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOW
Energen Corporation and Subsidiaries
(Unaudited)
<CAPTION>
Nine months ended June 30, (in thousands) 1994 1993
<S> <C> <C>
Operating Activities
Net Income $ 28,442 $ 23,696
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 20,536 18,540
Deferred income taxes, net (6,502) (2,060)
Deferred investment tax credits, net (365) (397)
Gain on sale of assets (2,142)
Gain on sale of equity securities (2,878)
Net change in:
Accounts receivable 10,780 (2,814)
Inventories (18,227) 1,232
Accounts payable (8,042) 3,631
Other current assets and liabilities 23,647 641
Other, net 437 1,001
Net cash provided by operating activities 45,686 43,470
Investing Activities
Additions to property, plant and equipment (25,765) (31,955)
Proceeds from sale of equity securities 4,808
Proceeds from sale of assets 8,624
Payments on notes receivable 1,394 1,044
Other, net 1,640 182
Net cash used in investing activities (9,299) (30,729)
Financing Activities
Purchase of treasury stock (44)
Payment of dividends on common stock (8,689) (7,975)
Issuance of common stock 14,699 1,943
Reduction of long-term debt and preferred
stock of subsidiary (10,542) (9,648)
Proceeds from issuance of medium-term notes 49,670 14,555
Net change in short-term debt (40,000) (14,000)
Net cash provided by (used in)
financing activities 5,094 (15,125)
Net change in cash and cash equivalents 41,481 (2,384)
Cash and cash equivalents at beginning of period 15,008 10,303
Cash and cash equivalents at end of period $ 56,489 $ 7,919
The accompanying Notes are an integral part of these statements.
</TABLE>
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<TABLE>
STATEMENTS OF INCOME
Alabama Gas Corporation
(Unaudited)
<CAPTION>
Three months ended Nine months ended
June 30, June 30,
(in thousands) 1994 1993 1994 1993
<S> <C> <C> <C> <C>
Operating Revenues $ 66,070 $ 69,452 $ 303,331 $ 288,632
Operating Expenses
Cost of gas 31,604 37,619 171,144 167,260
Operations 18,023 17,029 54,553 49,739
Maintenance 2,390 2,171 6,885 6,681
Depreciation 4,505 4,312 13,373 12,852
Income taxes
Current 1,280 824 16,760 9,868
Deferred, net (335) (328) (6,154) (596)
Deferred investment tax
credits, net (122) (132) (365) (397)
Taxes, other than
income taxes 5,145 5,264 22,125 20,772
Total operating expenses 62,490 66,759 278,321 266,179
Operating Income 3,580 2,693 25,010 22,453
Other Income
Allowance for funds used
during construction 90 43 277 94
Other, net 207 168 188 455
Total other income 297 211 465 549
Interest Charges
Interest on long-term debt 1,717 1,360 4,795 4,325
Other interest expense 361 507 1,497 1,435
Total interest charges 2,078 1,867 6,292 5,760
Net Income 1,799 1,037 19,183 17,242
Less cash dividends on
cumulative preferred stock 21 63
Net Income Available
for Common $ 1,799 $ 1,016 $ 19,183 $ 17,179
The accompanying Notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
BALANCE SHEETS
Alabama Gas Corporation
(Unaudited)
<CAPTION>
June 30, September 30,
(in thousands) 1994 1993
<S> <C> <C>
ASSETS
Property, Plant and Equipment
Utility plant $448,328 $429,115
Less accumulated depreciation 227,208 215,892
Utility plant, net 221,120 213,223
Other property, net 240 83
Current Assets
Cash and cash equivalents 27,119 480
Accounts receivable
Gas 21,559 23,563
Merchandise 1,421 1,256
Other 896 1,011
Allowance for doubtful accounts (2,000) (1,800)
Inventories, at average cost
Storage gas 18,466
Materials and supplies 5,885 5,851
Liquified natural gas in storage 3,167 3,636
Deferred gas costs 1,713 2,966
Deferred income taxes 8,775 2,587
Prepayments and other 1,679 2,520
Total current assets 88,680 42,070
Deferred Charges and Other Assets 8,424 9,172
TOTAL ASSETS $318,464 $264,548
The accompanying Notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
BALANCE SHEETS
Alabama Gas Corporation
(Unaudited)
<CAPTION>
June 30, September 30,
(in thousands) 1994 1993
<S> <C> <C>
CAPITAL AND LIABILITIES
Capitalization
Common shareholders' equity
Common stock, $0.01 par value; 3,000,000
shares authorized 1,972,052 shares
outstanding in 1994 and 1993 $ 20 $ 20
Premium on capital stock 31,682 21,682
Capital surplus 2,802 2,802
Retained earnings 85,374 74,886
Total common shareholder's equity 119,878 99,390
Cumulative preferred stock, $0.01 par value,
120,000 shares authorized, issuable in
series $4.70 Series
Long-term debt 84,420 43,912
Total capitalization 204,298 143,302
Current Liabilities
Long-term debt due within one year 2,793 3,193
Notes payable to banks 29,000
Accounts payable
Other 17,227 18,772
Affiliated companies 5,625 1,252
Accrued taxes 19,070 8,960
Customers' deposits 17,258 16,717
Supplier refunds due customers 828 740
Other amounts due customers 9,719 4,365
Accrued wages and benefits 6,557 5,261
Other 7,154 4,821
Total current liabilities 86,231 93,081
Deferred Credits and Other Liabilities
Deferred income taxes 12,871 12,416
Accumulated deferred investment tax credits 4,712 5,077
Regulatory liability 7,158 7,717
Customer advances for construction and other 3,194 2,955
Total deferred credits and other liabilities 27,935 28,165
Commitments and Contingencies
TOTAL CAPITAL AND LIABILITIES $ 318,464 $ 264,548
The accompanying Notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CASH FLOW
Alabama Gas Corporation
(Unaudited)
<CAPTION>
Nine months ended June 30, (in thousands) 1994 1993
<S> <C> <C>
Operating Activities
Net Income $ 19,183 $ 17,242
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 13,373 12,852
Deferred income taxes, net (6,154) (596)
Deferred investment tax credits (365) (397)
Net change in:
Accounts receivable 2,067 (2,066)
Inventories (18,031) 276
Accounts payable 1,005 1,034
Other current assets and liabilities 21,816 3,120
Other, net 939 362
Net cash provided by operating activities 33,833 31,827
Investing Activities
Additions or property, plant and equipment (21,069) (13,948)
Net advances from holding company 87
Other, net (118) (152)
Net cash used in investing activities (21,100) (14,100)
Financing Activities
Payment of dividends on common stock (8,695) (7,975)
Payment of dividends on preferred stock (63)
Reduction of long-term debt and preferred stock (9,892) (8,838)
Proceeds from issuance of medium-term notes 49,670
Proceeds from equity infusion from parent 10,000
Net advances from (to) affiliates 1,823 (2,510)
Net change in short-term debt (29,000) 1,000
Net cash provided by (used in) financing activities 13,906 (18,386)
Net change in cash 26,639 (659)
Cash at beginning of period 480 2,394
Cash at end of period $ 27,119 $ 1,735
The accompanying Notes are an integral part of these statements.
</TABLE>
<PAGE>
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Energen Corporation and Alabama Gas Corporation
1. BASIS OF PRESENTATION
All adjustments to the unaudited financial statements which are, in the opinion
of management, necessary for a fair statement of the results of operations for
the interim periods have been recorded. Such adjustments consisted only
of normal recurring items. The consolidated financial statements and notes
thereto should be read in conjunction with the financial statements and notes
for the years ended September 30, 1993, 1992, and 1991 included in the
1993 Annual Report of Energen Corporation (the Company) on Form 10-K.
Certain reclassifacations were made to conform prior years' financial statements
to the current quarter presentation. The Company's primary business
is seasonal in character and influenced by weather conditions. Results of
operations for the interim periods are not necessarily indicative of the
results which may be expected for the fiscal year.
2. REGULATORY
As a public utility in the state of Alabama, Alagasco is subject to
regulation by the Alabama Public Service Commission (APSC), which has adopted
several innovative approaches to rate regulation, including Alabama's Rate
Stabilization and Equalization (RSE) rate-setting process. Implemented in
1983 and modified in 1985, 1987, and 1990, RSE replaced the traditional
utility rate case with APSC-monitored periodic rate adjustments presently
designed to give Alagasco the opportunity to earn an average return on equity
(ROE) at its fiscal year-end within a specified range. Under Alagasco's
current RSE order, which became effective December 1990, Alagasco's
allowed ROE range is 13.15 percent to 13.65 percent. The APSC conducts
quarterly reviews to determine, based on Alagasco's budget and fiscal
year-to-date performance, whether Alagasco's projected ROE for the fiscal year
will be within the allowed range. Reductions in rates bring the projected
ROE within the allowed range. Increases, however, are permitted only once
each fiscal year effective on December 1, and cannot exceed 4 percent
of prior-year revenues.
RSE limits Alagasco's equity upon which a return is permitted to 60 percent
of total capitalization and provides for a cost control measure designed to
monitor Alagasco's operations and maintenance (O & M) expense. If increases
in O & M expense per customer fall within 1.25 percent above or below the
Consumer Price Index for all Urban Customers (index range), no adjustment
is required. If, however, increases in O & M expense per customer exceed
the index range, three-fourths of the difference is returned to customers.
To the extent increases in O & M expense per customer are less than the
index range, Alagasco will benefit by one-half of the difference through
future rate adjustments. Effective December 15, 1990, the APSC approved
a temperature adjustment to customers' monthly bills to mitigate the effect of
departures from normal temperature on Alagasco's earnings. The calculation is
performed monthly and adjusted on customer's bills in the actual month the
weather variation occurs.
Under its terms, Alagasco's current RSE order continues until, after notice
to Alagasco, the APSC votes to either modify or discontinue its operation.
On October 4, 1993, the APSC unanimously voted to defer review of the
current RSE order until such time as certain hearings mandated by the Energy
Policy Act of 1992 (Energy Act) in connection with integrated resource planning
and demand side management programs are completed. The proceedings are expected
to continue through most of 1994. Following completion of the Energy Act
proceedings, it is expected that the APSC will consider renewal of Rate RSE.
Under RSE as extended, a $.5 million annual decrease in revenue became
effective October 1, 1993, a $7.2 million annual increase in revenue
became effective December 1, 1993, and a $1.0 million annual decrease
in revenue became effective July 1,1994.
<PAGE>
3. SUPPLEMENTAL CASH FLOW INFORMATION
Energen Corporation
Nine months ended June 30, (in thousands) 1994 1993
Interest paid, net of amounts capitalized $ 9,029 $ 9,158
Income taxes paid $ 7,571 $ 3,906
Noncash investing activities (capitalized
depreciation and allowance for funds used
during construction) $ 396 $ 231
Noncash financing activities (debt
issuance costs) $ 330 $
Alabama Gas Corporation
Nine months ended June 30, (in thousands) 1994 1993
Interest paid $ 7,024 $ 7,186
Income taxes paid $ 8,843 $ 4,562
Noncash investing activities (capitalized
depreciation and allowance for funds
used during construction) $ 396 $ 231
Noncash financing activities (debt issuance costs) $ 330 $
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Consolidated net income for the third quarter was $3,950,000 ($.36 per share)
compared with $1,081,000 ($.11 per share) for the same period last year.
One-time gains associated with Energen's other activities and a strong
performance by Alabama Gas Corporation (Alagasco) combined to create
increased earnings for the quarter. The Company sold substantially all
of the assets of its propane distribution subsidiary as well as a majority
of its investment in equity securities of a high-temperature combustion
technology company resulting in approximately $2 million in earnings
for the quarter. Also, the utility continued to earn its allowed return on
additional equity resulting from its investment in underground storage
working gas.
Consolidated net income for the nine months was $28,442,000 ($2.63 per share)
compared with $23,696,000 ($2.32 per share) for the same period of the prior
year. The factors contributing to the increase in current quarter earnings
held true for the year-to-date with higher conventional gas production
activities at Taurus Exploration, Inc. (Taurus) further enhancing earnings.
Natural gas revenues decreased 5 percent for the quarter as a result of a 16
percent decrease in sales volumes to core customers offset in part by
collections under the weather normalization adjustment. For the nine month
period, natural gas revenues increased 5 percent primarily as a
result of the recovery of Gas Supply Adjustment (GSA) costs.
Oil and gas revenues increased 30 percent for the quarter and 27 percent for
the nine months primarily due to significantly higher conventional
gas production and increased operating fees associated with a new operating
project. Offsetting these increases to some degree were the effects of
decreased oil prices and decreased consulting fees following the conclusion
of a major consulting contract. The average sales price of gas for the
current quarter was $1.83 per Mcf compared with $1.73 per Mcf in the
prior year. The average sales price of oil for the current quarter was
$14.16 per barrel compared with $17.41 per barrel in the prior year. The
average sales price of gas for the nine months ended June 30, 1994,
and 1993, was $1.93 per Mcf and $1.88 per Mcf, respectively. The
average sales price of oil for the nine months ended June 30, 1994, was
$14.08 per barrel compared with $17.41 per barrel in the prior year.
To hedge its exposure to such price fluctuations on oil and gas production,
Taurus periodically enters into futures contracts. Under this program,
Taurus has entered into futures contracts for the sale of 2.1 Bcf of
its gas production with an average contract price of $1.96, and for the sale
of 42,000 barrels of its oil production at an average contract price
of $18.41 over the remainder of this fiscal year. Taurus has extended
its program into fiscal 1995 for the sale of 4.6 Bcf of its gas production
with an average contract price of $2.17, and for the sale of 72,000
barrels of its oil production at an average contract price of $18.41.
Other revenues for the quarter were 16 percent lower due primarily to decreased
revenues from propane operations as a result of the asset sale. For the
year-to-date, other revenues were 14 percent higher as increased sales from
the merchandising operations more than offset decreases from propane operations.
The 15 percent decrease in cost of gas for the quarter was due largely to a
16 percent decrease in volumes sold to residential customers. Although volumes
sold for the nine months remained virtually unchanged from the prior year,
cost of gas increased 3 percent due primarily to the recovery of GSA costs
offset largely by lower commodity cost of gas.
The 7 percent increase in operations and maintenance expense for the quarter
was primarily due to increased labor and related expenses at Alagasco and
increased exploration expenses at Taurus. Impacting the 11 percent increase
for the nine months were labor and related expenses at Alagasco, increased
operations expenses associated with merchandising operations, and increased
exploration and lease operating expenses at Taurus.
Depreciation expense for the quarter and year-to-date increased 11 percent due
largely to higher conventional gas production at Taurus and normal plant
growth at Alagasco.
The Company's expense for taxes other than income taxes primarily reflects
various state and local business taxes paid by Alagasco as well as
various payroll-related taxes. The state and local business taxes are
generally based on gross receipts of Alagasco and fluctuate accordingly.
Interest expense for the quarter and year-to-date rose 7 and 8 percent,
respectively, due primarily to the issuance of $50 million in unsecured notes
in the current year offset in part by lower average short-term debt outstanding.
During the third quarter of the current year, the Company sold substantially
all of the operating assets of its propane distribution subsidiary resulting
in a pretax gain of $2.1 million dollars and sold a majority of its
investment in equity securities in a high-temperature combustion
company for a pre-tax gain of $1.5 million.
The increase in income tax expense for the quarter and year-to-date was
primarily associated with increased pretax income. The Company
anticipates effective tax rates to remain lower than statutory rates through
the year 2002 as it expects to recognize all section 29 tax credits generated
for financial statement purposes.
As previously discussed, the Company's business is seasonal in character and
influenced by weather conditions. Results of operations for the interim
periods are not necessarily indicative of the results that may be expected for
the fiscal year.
Liquidity and Capital Resources
Two factors were primarily responsible for the $2.2 million increase in
cash provided by operations. The recovery of GSA costs and increases
in accrued taxes payable (both reflected in other current assets and
liabilities) were largely offset by Alagasco's current year purchase
of storage gas. Fluctuations in accounts receivable and payable
are generally the result of timing of payments.
Net cash from investing activities increased $21.4 million over the prior year
primarily as a result of three factors proceeds from the current year sale of
equity securities, proceeds from the sale of assets of the propane
subsidiary, and a decrease in capital expenditures. Capital expenditures for
the prior year included the Company's investment of approximately $13 million
in conventional producing properties following the 1992 sale of
nonconventional properties. Offsetting the current year decrease at Taurus
was an increase in capital expenditures at Alagasco due in part to the
development of a new customer information system.
The increase in net cash provided by financing activities of $20.2 million is
attributable to several occurrences in the current year. Proceeds from the
issuance of 550,000 shares of Energen common stock in November of 1993
totaled $13.5 million and were used to help fund the purchase of storage gas.
Alagasco also issued $50 million of medium-term notes which offered
investors a combination of interest rates and investment periods ranging from
5.4 percent to 7.2 percent for notes redeemable December 1, 1998, to
December 15, 2023. Alagasco used proceeds from these notes to fund
the balance of the storage investment, redeem its 8.75 percent debentures,
reduce its short-term debt outstanding, and to fund additional
capital needs. During the third quarter, the Energen Board of
Directors authorized the purchase of up to 500,000 shares of the Company's
common stock. At June 30, 1994, the Company had repurchased 2,000 shares.
Energen has short-term credit facilities totaling $110 million available
for working capital needs with $6 million outstanding at June 30, 1993.
Capital Expenditures: Capital and exploration expenditures could approximate
$52 million in 1994, excluding municipal gas system acquisitions, and
primarily will be used to fund normal distribution system expansion and the
development of a new customer information system at Alagasco, and oil and
gas development activities. The Company anticipates funding these capital
expenditures through internally generated capital and the utilization of
short-term credit facilities as needed. In addition to the capital
expenditures, the Company will maintain an investment in
storage working gas which is anticipated to average $25 million.
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<TABLE>
SELECTED BUSINESS SEGMENT DATA
Energen Corporation
<CAPTION>
Three months ended Nine months ended
June 30, June 30,
(in thousands) 1994 1993 1994 1993
<S> <C> <C> <C> <C>
Natural Gas Distribution
Operating Revenues (in thousands)
Residential $ 42,982 $ 45,346 $ 205,166 $ 192,121
Commercial and industrial - small 16,009 17,377 74,644 72,452
Commercial and industrial - large 30 (35) 763 1,205
Transportation 6,892 6,285 22,948 21,652
Other 157 479 (190) 1,202
Total $ 66,070 $ 69,452 $ 303,331 $ 288,632
Volumes sold and transported (thousands of Mcf)
Residential 5,129 6,149 28,902 28,575
Commercial and industrial - small 2,498 2,859 12,000 12,286
Commercial and industrial - large 7 12 98 278
Transportation 12,785 11,669 39,700 38,109
Total 20,419 20,689 80,700 79,248
Other data (in thousands)
Depreciation and amortization $ 4,505 $ 4,312 $ 13,373 $ 12,852
Capital expenditures $ 7,451 $ 5,061 $ 21,465 $ 14,179
Operating income $ 4,403 $ 3,057 $ 35,251 $ 31,328
Oil and Gas Exploration and Production
Operating revenues (in thousands)
Natural gas $ 4,452 $ 2,949 $ 12,607 $ 8,354
Oil 722 940 2,183 2,647
Other 1,240 1,043 3,995 3,809
Total $ 6,414 $ 4,932 $ 18,785 $ 14,810
Sales volume- natural gas (thousands of Mcf) 2,431 1,702 6,368 4,435
Sales volume - oil (thousands of barrels) 51 54 155 152
Average sales price - natural gas (Per Mcf)$ 1.83 $ 1.73 $ 1.93 $ 1.88
Average sales price - oil (per barrel) $ 14.16 $ 17.41 $ 14.08 $ 17.41
Other data (in thousands)
Depreciation, depletion and amortization $ 2,323 $ 1,757 $ 6,368 $ 4,840
Capital expenditures $ 2,226 $ 3,728 $ 4,374 $ 17,618
Exploration expenditures $ 1,093 $ 255 $ 1,287 $ 819
Operating income $ 911 $ 677 $ 4,922 $ 3,890
Other Business (in thousands)
Operating revenues $ 2,477 $ 2,948 $ 13,268 $ 11,655
Depreciation and amortization $ 201 $ 284 $ 795 $ 848
Capital expenditures $ 125 $ 118 $ 322 $ 389
Operating income $ (299) $ (128) $ 1,547 $ 1,264
Eliminations and Corporate Expenses (in thousands)
Operating loss $ ( 690) $ (625) $ (1,312) $ (1,268)
The accompanying Notes are an integral part of these statements.
</TABLE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
None.
b. Reports on Form 8-K
No reports on Form 8-K were filed for the three months ended June 30, 1994.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ENERGEN CORPORATION
ALABAMA GAS CORPORATION
August 12, 1994 By/s/ Rex J. Lysinger
Rex J. Lysinger
Chairman of the Board and Chief
Executive Officer
August 12, 1994 By/s/ G. C. Ketcham
G. C. Ketcham
Executive Vice President, Chief
Financial Officer and Treasurer
August 12, 1994 By/s/ J. T. McManus
J. T. McManus
Vice President-Finance and Corporate
Development of Energen and Vice
President-Finance and Planning of
Alagasco
