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High costs drag Energen's 2Q profit down 37 pct

BIRMINGHAM, Ala. (AP) -- Energen Corp. said Wednesday that its second-quarter net income dropped 37 percent, as higher costs more than offset greater production. But results still topped expectations, lifting shares of the oil and natural gas developer.

Energen shares rose $3.37, or 6 percent, to close at $59.89.

The Birmingham, Ala., company said total production increased 7 percent, including an 18 percent increase in oil volumes. Energen also got a boost from higher natural gas and oil prices. But those gains were countered by higher depreciation and amortization costs, lease operating expenses and production taxes, and administrative costs.

Citing the higher lease costs and slight changes in product mix, Energen cut its full-year profit forecast to a range of $3.15 to $3.55 per share. Previously it had projected 2013 earnings of $3.34 to $3.74 per share, compared with analysts' average forecast of $3.31 per share.

For the April to June period Energen earned $83.1 million, or $1.15 per share, down from $131.3 million, or $1.82 per share, in the same quarter of 2012. Excluding one-time items, the company said it posted an adjusted profit of 66 cents per share.

Revenue increased 4 percent to $490.1 million from $470.4 million as natural gas distribution revenue grew.

The results beat Wall Street predictions. Analysts, on average, expected a profit of 61 cents per share on $405.3 million in revenue, according to FactSet.