Energen Sells Alabama Coalbed Methane Play
Wells such as this one in west Texas are the focus of Energen Resources following the sale of coalbed methane reserves in Alabama.
Birmingham-based Energen Corp. pioneered coalbed methane production in the Black Warrior Basin nearly 30 years ago, but this summer it announced the sale of its reserves for $160 million to an undisclosed buyer. The company expects the sale to close October 1 and plans to use proceeds to reduce short-term debt.
Most of Energen’s exploration in recent years has been conventional drilling in the Permian Basin in Texas and the San Juan Basin of New Mexico and Colorado.
“It was a fabulous success for us and others,” former Energen Chairman and CEO Mike Warren told Business Alabama in 2007, recalling the company’s early development of the Black Warrior fields in partnership with the Gas Research Institute.
The Black Warrior enterprise launched Energen into exploration. Previously the company earned 80 percent of its revenue from its gas utility, Alabama Gas Co. Ten years later, though the Alagasco revenues stayed much the same, they accounted for only 15 percent of the company earnings, with 85 percent from the exploration and development arm, Energen Resources.