Energen Corporation has announced that its oil and gas acquisition and development subsidiary, Energen Resources Corporation (ERC), has signed a purchase and sale agreement to buy Permian Basin oil properties from a private company for $168 million (subject to closing adjustments). The sale, expected to close by the end of the year, will have an effective date of November 1, 2005.

Energen Corporation will hold a conference call with senior management to discuss the acquisition on Wednesday, November 23, 2005, at 11 a.m. ET. The call will be broadcast live over the Internet and may be accessed on the Company's Web site: www.energen.com.

The properties include the North Westbrook Unit in Mitchell County, Texas, and two smaller fields nearby, and encompass approximately 15,000 gross acres. The North Westbrook Unit is contiguous to ERC's existing waterflood operations in the Southeast Westbrook Unit. The Permian Basin in West Texas is the oldest producing oil basin in the United States and ERC's second largest area of operation.

Approximately 80 percent of the 21.8 million barrels of oil equivalent (MMBOE) proved reserves are undeveloped; in addition, ERC estimates that probable reserves total approximately 15 MMBOE. The combination of proved undeveloped and probable reserves is expected to generate a drilling inventory for the Company of approximately 470 wells over the next six years. More than 90 percent of the estimated proved and probable reserves are oil.

Assuming future development costs of approximately $145 million on proved reserves and $80 million on probable reserves, the all-in acquisition cost is $10.62 per barrel ($1.77 per thousand cubic feet equivalent).

"This acquisition is an excellent fit for Energen Resources," said James McManus, president and chief operating officer of Energen's oil and gas subsidiary. "While these properties have a smaller component of proved developed reserves than our previous acquisitions, their location adjacent to our successful Southeast Westbrook Unit represents an important expansion in one of our core areas of operation and gives us an excellent opportunity to capitalize on our operating expertise there.

"In keeping with our acquisition criteria, the properties are 100 percent operated, offer multiple pay zone opportunities and are long-lived, with a proved reserves-to-production ratio in excess of 30," McManus added. "Our major productive interval targets will be the Middle and Upper Clearfork."

Production is estimated to be 0.5 MMBOE in 2006 and is expected to triple over the next 5-6 years before beginning a gradual decline at a four-year rate of approximately 5 percent a year.