(Reuters) - Oil and gas company Energen Corp EGN.N reported higher-than-expected first-quarter profit on Tuesday and raised its production guidance for the year as it seeks to reap the benefits of $70-a-barrel crude.
For the year, the company said it now expects annual production in the range of 92,000-99,000 barrels of oil equivalent per day (boe/d) up from the 91,500-98,500 it forecast along with fourth-quarter results in February.
“We are pleased to report that we have all of the rigs and services lined up to execute on our 2018 drilling and development plans,” said Chief Executive Officer James McManus.
Energen has been shedding non-core assets to focus on its core assets in the Permian basin, the mainly Texas-based oilfield that is the United States’ largest. The company had previously set a three-year timeline to improve production from Delaware and Midland, the two main portions of the Permian.
The company, which settled a long tussle with activist investor Keith Meister in March, sold oil at $57.65 per barrel, up from an average of $46.95 per barrel in the same period a year ago.
Like many U.S. oil producers, the Alabama-based company has drawn strength from a resurgence in prices of U.S. light crude CLc1, which rose to highs of $66.66 during the quarter after hitting lows of $26.05 in 2016 due to a global crude glut.
Energen increased production by 76 percent to 92,900 barrels of oil equivalent per day (boe/d) in the quarter, nearing the higher end of the first quarter guidance the company had set.
The company’s net income more than tripled to $118.9 million, or $1.22 per share, in the three months ended March 31 from $33.4 million, or 34 cents per share, a year earlier.
Excluding items the company earned 81 cents a share, higher than analysts’ average expectation of 78 cents according to Thomson Reuters I/B/E/S.
Shares of the company were not trading premarket.
Reporting by Anirban Paul in Bengaluru; Editing by Anil D'Silva