U.S. energy holding company, Energen Corporation (EGN) has closed a Purchase and Sale Agreement (PSA) with an undisclosed buyer for divesting its Alaska-based Black Warrior Basin coalbed methane properties for a consideration of roughly $160.0 million, including general closing adjustments. The undisclosed buyer (a limited liability corporation) also assumed Energen’s third-party operating agreements.
The net proceeds from the sale will be utilized by Energen to lower its short-term debt. The company added that the proved reserve related to the Black Warrior Basin assets as of Dec 31, 2012, was roughly 97.0 billion cubic feet.
In order to reflect the property sale, Energen has made an adjustment of 0.4 million barrels of oil equivalents (:MMBOE) in its fourth-quarter production guidance, thereby bringing the full-year 2013 projection to 25.7 to 26.1 MMBOE. In the fourth quarter of 2013, Energen will reflect a non-cash gain on the transaction of approximately $33 million.
Birmingham, AL-based Energen is an independent oil and gas exploration and production firm. Through its wholly owned subsidiary, Energen Resources Corp., the company had approximately 750 million barrels of oil-equivalent proved, probable, and possible reserves at year-end 2012.
These all-domestic reserves are located mainly in the Permian and San Juan basins. Moreover, in the U.S., the company involves in acquisition and development of oil and gas properties.
The company currently retains a Zacks Rank #2 (Buy), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.