MANAGEMENT COMMENTS
“Our natural gas hedging, strong prices applicable to our unhedged oil and natural gas liquids (NGL) volumes, and accelerated development of our undeveloped reserves combined to generate record earnings at Energen for the sixth straight year,” said Energen Chairman and Chief Executive Officer James T. McManus. “I think it is important to emphasize that we achieved record earnings in 2007 even though prior-year earnings included some 56 cents per diluted share of one-time gains associated with the sale of half of our October 2006 acreage position in Alabama shales to Chesapeake Energy Corporation and a settlement of our Enron bankruptcy claim.

“The expectation that Energen would deliver in 2007 helped generate for shareholders a total return of 38 percent. Over the last five years, Energen’s annualized total return to shareholders is 36 percent a year.

“Today, we also are pleased to be affirming our earnings guidance for 2008 of $3.95-$4.35 per diluted share and, importantly, initiating our 2009 guidance with a range of $4.45-$4.85 per diluted share,” McManus said. “Approximately 52 percent of our estimated 2009 production is already hedged at NYMEX-equivalent prices of $8.71 per thousand cubic feet (Mcf) of gas and $70.75 per barrel of oil and an NGL price of $1.05 per gallon. Our price assumptions for our unhedged volumes are below strip prices at $8 per Mcf of gas and $80 per barrel of oil, and our assumed NGL price is $1.04 per gallon.

ALABAMA SHALE UPDATE
Energen and Chesapeake Energy have amassed an acreage lease position in multiple shale plays in north and central Alabama of approximately 565,000 acres, with Energen’s net position totaling some 282,500 acres. The first three permits in the planned 5- to 10-well test program have been obtained for drilling in Greene and Bibb counties. Work is scheduled to begin next week.

“This is a test program aimed at helping define the productive potential of our joint acreage position,” McManus said. “As such, our efforts will involve considerable ‘science.’ We know the investment community is anxious for results, but they are months away. We do not plan to disclose well-by-well results,” McManus added. “Our plans are to work as thoroughly and expediently as possible and to announce our findings when sufficient data has been gathered.”

2007 EARNINGS
Energen’s net income for the year totaled $309.2 million, while 2006 earnings totaled $273.6 million, or $3.73 per diluted share. The prior year included a $34.5 million, or 47 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.

Energen Resources Corporation, the Company’s oil and gas exploration and production subsidiary, again was the driver of consolidated earnings growth in 2007. Contributing net income of $273.2 million, Energen Resources benefited from a 19 percent increase in realized sales prices, a 3 percent rise in production to 98.6 Bcfe and an income tax benefit on qualified production. Negatively affecting Energen Resources’ earnings were increased lease operating expense (LOE), including production taxes; higher depreciation, depletion and amortization (DD&A) expense; and greater general and administrative (G&A) expense. Energen Resources’ net income in 2006 totaled $237.6 million and included the $34.5 million gain from the acreage position sale to Chesapeake and the $6.7 million gain from the Enron bankruptcy settlement.

For the full financial report, visit 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.

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 1.75 Tcfe of proved reserves and 1.9 Tcfe of 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.