Energen Corp. (NYSE: EGN) said June 19 its board had unanimously decided to stick to its business plan, less than a month after activist investor Corvex Management LP disclosed a large stake in the oil and gas producer and demanded that it explore a sale.
The Birmingham, Ala.-based company, which has a large concentration of its assets in the Permian Basin, also raised its 2017 production forecast by 5.9% to 70,200 barrels of oil equivalent per day.
Energen said the increased production guidance was driven from recent wells completed with the Generation 3 frack design. The company's drilling and development capex for 2017 remains unchanged at $850 million to $900 million.
“We are very excited by the performance we are achieving,” James McManus, Energen chairman and CEO, said in a statement. “Importantly, it supports our view that 2017 is a breakout year for Energen that underscores our top-tier assets and solid execution.”
In the second quarter, Energen is planning 41 gross/net Gen 3 wells to come online. The company has about 62 gross (55 net) wells planned for production during second-half 2017.
RELATED: Energen Sticks To Permian Backroads For Expansion
Corvex, run by Carl Icahn protege Keith Meister, disclosed a 5.5% stake last month and said the fund had discussed its views with the company.
Energen said June 19 it had engaged J.P. Morgan and Tudor Pickering Holt & Co. to review strategic alternatives but that, in the end, it decided to stick with its own business plan.
"This examination took into consideration input from numerous shareholders and analyzed Energen’s top-tier assets, its improving execution and the broader macroeconomic and commodity price environment," the company said in a statement.
Whether Corvex accepts the $5 billion company's decision or ramps up pressure further is unclear. Corvex did not return a call seeking comment on June 19.
“Energen is committed to maintaining both a robust dialogue with its shareholders and an open mind with respect to value creation opportunities, now and in the future,” McManus said in a statement.
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