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Energen Corporation

John Mohr, Auburn University
Energen Corporation is an oil and natural gas exploration and production firm headquartered in Birmingham, Jefferson County. Since the founding of its earliest incarnation in 1852, Energen has grown into one of the largest independent providers of oil and natural gas in the United States.
Energen Headquarters
The historical roots of Energen date to 1852 when the city council of Montgomery, Montgomery County, first authorized the installation of gas street lighting. (The city of Mobile, Mobile County, began using gas lights in 1836.) The license was sold to John Jeffrey of Cincinnati, Ohio, who formed the Montgomery Gas Light Company with other investors; the company was granted a corporate charter by the Alabama Legislature in 1853. The first source of gas for the lights was a byproduct of the city's many coke ovens. Large pipes transmitted gas from the coke ovens to storage tanks, and then onward to streets, homes, and businesses. In the late 1860s and 1870s, the company expanded into electric power generation and was renamed the Montgomery Light and Power Company. (The first electric street car system in North America was developed in the city in 1886.)
In 1903, the company name was changed again, to the Montgomery Light and Water Power Company, in recognition of the firm's investment in hydroelectric power. It went through numerous changes of ownership in the years between the end of the 1870s and its brief acquisition by Alabama Power in 1923, when it became part of a larger utility network. There was a brief period when the company entered bankruptcy administration in the early 1900s, but it was reorganized and recovered. In the early 1930s, the company managed Montgomery's transition from coke oven gas to gas it centrally manufactured in and distributed from Montgomery. The company's network grew gradually as it merged with smaller natural gas companies throughout the state. In 1936, the company was renamed again to Alabama Gas Company, to better reflect the diversity of its holdings. In 1937, the firm was purchased by the Southern Natural Gas Company, a major utility operator in multiple states. Under this new ownership, the Alabama Gas Company merged with the Birmingham Gas Company to form the Alabama Gas Corporation.
Alagasco Sign
In 1953, the Alabama Gas Corporation was spun off by the Southern Natural Gas Company in response to antitrust concerns from the federal government. It became a publicly traded company, with $1.3 million in earnings and 175,000 customers in Alabama. The company transitioned from selling manufactured gas to distributing natural gas from oil refineries in the United States. In 1971, the company formed the Taurus Exploration Corporation subsidiary to explore potential natural gas resources in northern Alabama. This marked the beginning of the company's diversification into prospecting and resource extraction. In 1974, the Alabama Gas Corporation was renamed Alagasco. The deregulation of natural gas prices in 1978 enabled the company to continue expanding its business by allowing more efficient pricing of natural gas. In 1979, the business was reorganized as a holding company, a corporation that holds stock in multiple businesses. Alagasco was the utility subsidiary that provided gas to consumers, and Taurus represented the exploration side of the business. Taurus helped to pioneer the extraction of methane from coal beds as well as the use of hydraulic fracturing ("fracking") techniques to extract natural gas. In 1985, the name of the holding company was changed to Energen Corporation. The company's business continued to expand outside of Alabama as it acquired more petroleum prospecting territories in Texas, Louisiana, Colorado, and other states. By 1992, the company had more than 4.15 million utility customers.
The exploration activity of Taurus Exploration Corporation continued to grow throughout the 1990s. The company acquired hundreds of millions of dollars' worth of property in the Permian Basin in Texas and the San Juan Basin in New Mexico. In 1998, the Taurus Corporation was renamed the Energen Resources Corporation. This name change reflected the expanding importance of exploration and extraction as part of the business. Following the global financial crisis of 2008 and the subsequent decline in oil prices, Energen sold off many assets. In 2014, the Alagasco utility division was sold to the Laclede Group (now Spire Inc.) of St. Louis, Missouri, for $1.6 billion. Energen also sold many of its non-core energy assets, including its holdings in the San Juan Basin in New Mexico as well as its Colorado and Louisiana properties. As a result, Energen has remained in good financial health even as many other energy companies have been forced to declare bankruptcy.
In its 2016 annual filing with the Securities and Exchange Commission, the corporation acknowledged that climate change could have a serious effect on the future of its business. But the effect is difficult to predict because of the uncertainty surrounding various factors: the severity of the climate shift, the impact of regulatory decisions, and the unpredictability of future demand for petroleum. The petroleum extraction technique known colloquially as fracking is extensively employed by Energen in its natural gas exploration efforts in Texas and New Mexico, but this technique has been criticized by environmental and community groups for its negative consequences, including human-made earthquakes and poisoning of groundwater. The company states that any new federal or state regulation of fracking in the areas where the company operates could have a material impact on its business.
Energen remains a publically held corporation and is listed on the New York Stock Exchange under the symbol EGN:US. As of May 2017, Energen had a total market capitalization of $5.35 billion. The company directly employs nearly 400 people, the majority of whom are located in its Midland, Texas, office. The company maintains an office in Birmingham as its company headquarters. The company indirectly supports many more jobs through its petroleum exploration and production activities. Energen's production and exploration activities are concentrated exclusively in the Permian Basin, a petroleum-rich region straddling the border of west Texas and eastern New Mexico.
Published:  September 14, 2017   |   Last updated:  September 14, 2017