U.S. energy holding company Energen Corporation (EGN) announced that its Permian Basin operations were greatly hampered by the impact of a severe winter storm. As reported by the company, adverse weather conditions began affecting the company’s operations in the Delaware and Midland basins and Central Basin Platform on Dec 30, 2014.
The storm’s impacts include power outages, trucking curtailments, limited access to production and drilling facilities, and frozen facilities. However management is of the opinion that given the timing of the storm the company’s fourth-quarter 2014 production is expected to be minimally affected.
Conservative estimates within the company put the damage to fourth-quarter production at less than 100,000 barrels of oil equivalent. However management is also apprehensive that a significant impact on production would be felt in the first quarter of 2015. The company is currently doing an extensive review of the damages and will report their real extent in its 2015 guidance to be issued after the market closes on Feb 12.
Birmingham, AL-based Energen is an independent oil and gas exploration and production company engaged in the acquisition, exploration, and development of oil and gas in the U.S. The company also purchases, distributes and sells clean-burning, energy-efficient natural gas to commercial and residential customers. The company had approximately 3.3 billion barrels of oil-equivalent proved, probable and possible reserves and contingent resources at year-end 2013. These all-domestic reserves are located primarily in the Permian Basin of west Texas.
We believe that Energen will be able to generate sufficient cash flows for its shareholders in the coming years backed by strong operating performance and good management decisions. Higher production of natural gas and natural gas liquids had benefited the company's last quarterly earnings.
Energen carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks include Spectra Energy Partners, LP (SEP), Seadrill Partners LLC (SDLP) and QEP Midstream Partners, LP (QEPM), each sporting a Zacks Rank #1 (Strong Buy).
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