Energen's Oil Production Forecast Misses Estimates Amid Proxy Fight
Feb 20 (Reuters) - Oil and gas company Energen Corp, under pressure from Keith Meister-led Corvex Management to sell itself, reported a better-than-expected quarterly profit, but its expectations for oil production this year fell short of analysts' estimates.
The company also said on Tuesday it would review biggest shareholder Corvex's recent nominations to its board.
Last month, the activist hedge fund, which owns almost 10 percent of Energen, proposed four candidates to the board.
Activism in the U.S. oil and gas sector has increased as investors get impatient and look for ways to increase the value of energy companies, hurt by the oil crash of 2014.
Energen has been shedding non-core assets for five years to concentrate on the Permian basin, which has the highest oil production in the United States. The company on Tuesday set a three-year timeline to better production.
The company said it expects to spend in the range of $1.6 billion to $1.8 billion for drilling and development in 2020 as part of that plan, up from $1.1 billion to $1.3 billion expected in 2018.
The plan assumes an allocation split of 50-50 between Delaware and Midland, two of the main portions of the Permian basin, Chief Executive James McManus said on a post-earnings call with analysts.
Energen said it expects to produce 555,000-585,000 barrels of oil per day (bbl/d) in 2018.
Analysts on average were expecting the Alabama-based company to produce 626,500 bbl/d, according to Thomson Reuters data.
The company's shares, which fell more than 3 percent after the production forecast, were marginally up at $52.36 in late morning trade.
For the fourth quarter ended Dec. 31, Energen said it produced 974,000 barrels of oil equivalent per day (boe/d), up from 535,000 boe/d a year earlier.
The company posted a net profit of $262.4 million, or $2.68 per share, in the quarter, compared with a loss of $54.5 million, or 56 cents per share, a year earlier.
The latest quarter saw a tax benefit of $240.1 million from changes in the U.S. tax code.
Excluding items, Energen earned 63 cents per share, beating the average analyst estimate of 42 cents, according to Thomson Reuters I/B/E/S.
(Reporting by Anirban Paul in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel)
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