ALABAMA GAS CORP (Form: 8-K, Received: 01/14/2005 11:18:37)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report

January 11, 2005

(Date of earliest event reported)

Commission

File Number

Registrant

State of

Incorporation

IRS Employer

Identification Number

2-38960

Alabama Gas Corporation

Alabama

63-0022000

605 Richard Arrington Boulevard North

Birmingham, Alabama

35203

(Address of Principal Executive Offices)

(Zip Code)

(205) 326-2700

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry into a Material Definitive Agreement .

On January 11, 2005, Alabama Gas Corporation entered into an underwriting agreement (the “Jones Underwriting Agreement”) with Edward D. Jones & Co., L.P. (the “underwriter”), whereby Alabama Gas Corporation agreed to sell and the underwriter agreed to purchase from Alabama Gas Corporation, subject to and upon the terms and conditions set forth in the Jones Underwriting Agreement, $40,000,000 principal amount of its 5.70% Notes due January 15, 2035 (the “2035 Notes”). The 2035 Notes are issuable pursuant to an indenture dated as of November 1, 1993 between Alabama Gas Corporation and The Bank of New York, as successor to NationsBank of Georgia, National Association, as trustee (the “Indenture”). The Jones Underwriting Agreement contains customary representations, warranties and agreements of Alabama Gas Corporation and customary conditions to closing, indemnification rights and obligations of the parties and termination provisions.

On January 11, 2005, Alabama Gas Corporation entered into an underwriting agreement (the “Edwards Underwriting Agreement”) with A.G. Edwards & Sons, Inc. (the “underwriter”), whereby Alabama Gas Corporation agreed to sell and the underwriter agreed to purchase from Alabama Gas Corporation, subject to and upon the terms and conditions set forth in the Edwards Underwriting Agreement, $40,000,000 principal amount of its 5.20% Notes due January 15, 2020 (the “2020 Notes”). The 2020 Notes are issuable pursuant to the Indenture. The Edwards Underwriting Agreement contains customary representations, warranties and agreements of Alabama Gas Corporation and customary conditions to closing, indemnification rights and obligations of the parties and termination provisions.

Copies of the Jones Underwriting Agreement and the Edwards Underwriting Agreement are attached hereto as Exhibits 1.1 and 1.2, respectively, and are incorporated by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreements.

Both the 2035 Notes and the 2020 Notes will be represented by a global security. Forms of the global securities for the 2035 Notes and the 2020 Notes are attached hereto as Exhibits 4.1 and 4.2, respectively. Copies of the Officers’ Certificates pursuant to Section 301 of the Indenture are attached hereto as Exhibits 4.3 and 4.4 and are incorporated by reference.

Item 7.01

Regulation FD Disclosure .

On January 14, 2005, Alabama Gas Corporation formally established both the series of 2035 Notes and the series of 2020 Notes under Officers’ Certificates pursuant to Section 301 of the Indenture. The closing of the offerings of the 2035 Notes and the 2020 Notes took place on January 14, 2005. Alabama Gas Corporation had previously filed a Registration Statement on Form S-3, registration number 333-121077, with the Securities and Exchange Commission (the “Registration Statement”), and filed two final prospectus supplements pursuant to Rule 424(b)(5) of the Securities Act of 1933, as amended, on January 12, 2005 which specified the terms of the 2035 Notes and the 2020 Notes.

Item 9.01

Financial Statements and Exhibits .


1.1		Underwriting Agreement dated January 11, 2005, between Alabama Gas Corporation as issuer and Edward D. Jones & Co., L.P. as underwriter.

1.2		Underwriting Agreement dated January 11, 2005, between Alabama Gas Corporation as issuer and A.G. Edwards & Sons, Inc. as underwriter.

4.1		Form of Global Note for the 5.70% Notes due January 15, 2035.

4.2		Form of Global Note for the 5.20% Notes due January 15, 2020.

4.3		Officers’ Certificate pursuant to Section 301 of the Indenture (2035 Notes).

4.4		Officers’ Certificate pursuant to Section 301 of the Indenture (2020 Notes).

5.1		Opinion of Bradley Arant Rose & White LLP.

23.1		Consent of Bradley Arant Rose & White LLP (included in Exhibit 5.1).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.


	ALABAMA GAS CORPORATION (Registrant)

Date: January 14, 2005	By	/S/ G. C. K ETCHAM
		G. C. Ketcham
		Executive Vice President, Chief Financial Officer and Treasurer of Alabama Gas Corporation

EXHIBIT INDEX



1.1		Underwriting Agreement dated January 11, 2005, between Alabama Gas Corporation as issuer and Edward D. Jones & Co., L.P. as underwriter.

1.2		Underwriting Agreement dated January 11, 2005, between Alabama Gas Corporation as issuer and A.G. Edwards & Sons, Inc. as underwriter.

4.1		Form of Global Note for the 5.70% Notes due January 15, 2035.

4.2		Form of Global Note for the 5.20% Notes due January 15, 2020.

4.3		Officers’ Certificate pursuant to Section 301 of the Indenture (2035 Notes).

4.4		Officers’ Certificate pursuant to Section 301 of the Indenture (2020 Notes).

5.1		Opinion of Bradley Arant Rose & White LLP.

23.1		Consent of Bradley Arant Rose & White LLP (included in Exhibit 5.1).

EXHIBIT 1.1

A LABAMA G AS C ORPORATION

$40,000,000

5.70% N OTES DUE J ANUARY 15, 2035

Underwriting Agreement

January 11, 2005

Edward D. Jones & Co., L.P.

12555 Manchester Road

St. Louis, Missouri 63131

Ladies and Gentlemen:

Alabama Gas Corporation, an Alabama corporation (the “ Company ”), hereby confirms its agreement with Edward D. Jones & Co., L.P. (the “ Underwriter ”) as follows:

1. Purchase and Sale . Upon the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, the Company agrees to sell to the Underwriter, and the Underwriter agrees, at the time and place herein specified, to purchase from the Company $40,000,000 principal amount of the Company’s 5.70% Notes due January 15, 2035 (the “ Securities ”), at the purchase price of 96.85% of the principal amount thereof and having the terms set forth in the Prospectus (as defined in Section 2(b) hereof). The Securities will be issued pursuant to an Indenture dated as of November 1, 1993 (as amended and supplemented, the “ Indenture ”) between the Company and The Bank of New York, as successor to NationsBank of Georgia, National Association (the “ Trustee” ).

2. Representations and Warranties of Company . The Company represents and warrants to, and covenants and agrees with, the Underwriter that:

(a) Filing of Registration Statement and any Preliminary Prospectus with SEC . The Company meets the requirements for use of Form S-3 under the Securities Act of 1933, as amended (the “ 1933 Act ”), and has filed with the Securities and Exchange Commission (the “ SEC ”) the Registration Statement (as defined below) and each Preliminary Prospectus (as defined below) relating to the Securities, if any, required to be filed pursuant to Rule 424 under the 1933 Act; the Registration Statement has been declared effective by the SEC under the 1933 Act and complies in all material respects with Rule 415 under the 1933 Act; and no stop order suspending the effectiveness of the Registration Statement or any part thereof has been issued under the 1933 Act and no proceedings for that purpose have been instituted or threatened by the

SEC, and any request on the part of the SEC for additional information has been complied with by the Company. For the purposes of this Agreement, the following terms used herein shall have the following meanings: (i) “ Registration Statement” shall mean the registration statement on Form S-3 (No. 333-121077) filed by the Company with the SEC pursuant to Rule 415 under the 1933 Act for the registration of the Company’s debt securities, including the Securities, under the 1933 Act, as amended to the date of this Agreement and including the exhibits thereto, and shall be deemed to include the Incorporated Documents (as defined below) as of the date hereof; (ii) “ Incorporated Documents” shall mean the documents filed by the Company with the SEC under the Securities Exchange Act of 1934, as amended (the “ 1934 Act” ), that are, or are deemed to be, incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3 under the 1933 Act; (iii) “ Preliminary Prospectus” shall mean any preliminary prospectus or any preliminary prospectus supplements used in connection with the offering and sale of the Securities prior to the execution and delivery of this Agreement, and shall in each case be deemed to include the Incorporated Documents; and (iv) “ Effective Date” shall mean the date or time that the Registration Statement or any post-effective amendment thereto was declared effective by the SEC under the 1933 Act. For purposes of this Agreement, the words “amend,” “amendment” or “amended” with respect to the Registration Statement or the Prospectus shall mean (i) amendments to the Registration Statement or the Prospectus and (ii) Incorporated Documents, in each case filed with the SEC or sent to prospective purchasers of the Securities after the date of this Agreement and prior to the completion of the distribution of the Securities.

(b) Registration Statement; Prospectus; Incorporated Documents . (i) The Registration Statement, at its Effective Date, any Preliminary Prospectus, when delivered to the Underwriter for its use in marketing the Securities (whether or not filed with the SEC pursuant to Rule 424 under the 1933 Act), and the Prospectus, at the time it is filed with the SEC pursuant to Rule 424(b) under the 1933 Act and when delivered to the Underwriter for its use in making confirmations of sales of the Securities, complied and will comply, as the case may be, in all material respects with the applicable requirements of the 1933 Act, the Trust Indenture Act of 1939, as amended (the “ 1939 Act ” ), and, in each case, the rules and regulations of the SEC thereunder; (ii) the Registration Statement, at the Effective Date, did not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (iii) the Prospectus, at the time it is filed with the SEC pursuant to Rule 424(b) under the 1933 Act and when delivered to the Underwriter for its use in making confirmations of sales of the Securities, will not, and any Preliminary Prospectus, when delivered to the Underwriter for its use in marketing the Securities (whether or not filed with the SEC pursuant to Rule 424 under the 1933 Act), did not, include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (iv) each Incorporated Document, at the time it was or is filed with the SEC pursuant to the 1934 Act, complied and will comply, as the case may be, in all material respects with the applicable requirements of the 1934 Act and the rules and regulations of the SEC thereunder and, at such times, did not contain and will not contain, as the case may be, an untrue statement of a material fact and did not omit and will not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however , that, in the case of clauses (i), (ii) and (iii) above, the Company makes no representation or warranty as to (x) information furnished in writing to the

Company by the Underwriter expressly for use in the Prospectus, which for purposes of this Agreement shall be deemed to consist solely of (1) the statements with respect to the delivery of the Securities in the last paragraph on the cover page of the Prospectus, and (2) the statements in the fifth paragraph, the third and fourth sentences of the seventh paragraph, the eighth paragraph, and, to the extent it relates to the Underwriter, the ninth paragraph, in each case, under the caption “Underwriting” in the prospectus supplement (as defined herein) (collectively, the “ Underwriter Information ”) or (y) that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification of the Trustee on Form T-1 under the 1939 Act. For purposes of this Agreement, “ Prospectus ” shall mean the prospectus included in the Registration Statement at the initial Effective Date, as such prospectus has been amended or supplemented as of the date hereof, including by the prospectus supplement relating to the Securities as first filed with the SEC pursuant to Rule 424(b) under the 1933 Act in accordance with Section 4(a) of this Agreement (the “Prospectus Supplement” ), and shall be deemed to include the Incorporated Documents as of the date hereof.

(c) Indenture . The Indenture has been duly qualified under the 1939 Act, has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery of the Indenture by the Trustee, will constitute a valid and binding instrument of the Company enforceable against the Company in accordance with its terms, except as may be limited by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) requirements of reasonableness, good faith and fair dealing (such exceptions, collectively, the “ Exceptions ”); and the Indenture will conform to the description thereof contained in the Prospectus.

(d) Securities . The Securities have been duly authorized and, at the Closing Date, will have been duly executed by the Company, and, when authenticated in the manner provided for in the Indenture, issued and delivered against payment therefor by the Company as described in the Prospectus, will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as may be limited by the Exceptions, and will be entitled to the benefits of the Indenture; and the Securities will conform to the description thereof contained in the Prospectus.

(e) Agreement . This Agreement has been duly authorized, executed and delivered by the Company.

(f) Due Incorporation . The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Alabama, with corporate power and authority to own its properties and conduct its business as described in the Prospectus and to execute and deliver, and perform its obligations under, this Agreement, the Indenture and the Securities; the Company is not required by the nature of its business to be licensed or qualified as a foreign corporation in any other state or jurisdiction, except where the failure to be so qualified would not have a material adverse effect on the Company.

(g) Material Changes . The Company has not sustained, since the date of the most recent financial statements included or incorporated by reference in the Prospectus, any material

loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Prospectus; and, since the respective dates as of which information is given in the Prospectus, otherwise than as set forth in the Prospectus, there has not been (i) any material change in the capital stock, long-term debt or net assets of the Company, (ii) any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, general affairs, management, properties, financial position, stockholder’s equity or results of operations of the Company, or (iii) any material transaction entered into by the Company.

(h) No Conflicts; Alabama Commission Order in Full Force and Effect; No Consents Required . The offering and sale of the Securities and the compliance by the Company with all of the provisions of the Securities, the Indenture and this Agreement, and the consummation of the transactions herein and therein contemplated, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, nor will such action result in any violation of the provisions of the Company’s articles of incorporation or bylaws, each as amended (the “ Organizational Documents ”), or any statute, rule, regulation or other law, or any order or judgment, of any court or governmental agency or body having jurisdiction over the Company or any of its properties; the Alabama Public Service Commission has issued its final order (the “ Alabama Commission Order ”) authorizing the issue and sale of the Securities by the Company and such Alabama Commission Order is in full force and effect and not the subject of any appeal or other proceeding and is sufficient to authorize the transactions contemplated by this Agreement; and no other consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body having jurisdiction over the Company or any of its properties is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement and the Indenture, except such as have been obtained under the 1933 Act and the 1939 Act, and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Securities by the Underwriter.

(i) Exemption from Public Utility Holding Company Act . Energen Corporation is the sole owner of all of the issued and outstanding common stock of the Company and has filed an annual exemption statement on Form U-3A-2 pursuant to Rule 2 under the Public Utility Holding Company Act of 1935, as amended (the “ 1935 Act ” ), and Energen Corporation and each of its subsidiaries are exempt from all of the provisions of the 1935 Act except Section 9(a)(2) thereof and have received no notice, request or inquiry from the SEC terminating or threatening to terminate or questioning such exemption.

(j) No Defaults . The Company is not in violation of the Organizational Documents or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject.

(k) Litigation . Other than as set forth in or contemplated by the Prospectus, there are no legal or governmental proceedings pending to which the Company is a party or of which any property of the Company is the subject that, if determined adversely to the Company, would individually or in the aggregate be reasonably expected to have a material adverse effect on the current or future financial position, stockholder’s equity or results of operations of the Company, and, to the best of the Company’s knowledge, no such proceedings are threatened or contemplated.

(l) Sarbanes-Oxley . The Company is to its knowledge, in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 that are effective and the rules and regulations of the SEC that have been adopted and are effective thereunder (collectively, the “Sarbanes-Oxley Act”).

(m) Accountants . To the knowledge of the Company, Pricewaterhouse Coopers LLP, (the “ Accountants ”) who have certified certain financial statements of the Company incorporated by reference in the Registration Statement and the Prospectus, are independent registered public accountants as required by the 1933 Act.

3. Offering; Delivery of Securities .

(a) Offering . The Underwriter has advised the Company that it proposes to make a public offering of the Securities as soon after the effectiveness of this Agreement as in its judgment is advisable. The Underwriter has further advised the Company that it will offer the Securities to the public at the initial public offering price specified in the Prospectus plus accrued interest thereon, if any, from the Closing Date to the date of delivery of the Securities.

(b) Delivery of Securities . Delivery of the Securities to the Underwriter, against payment of the purchase price therefor in immediately available funds by wire transfer, shall be made prior to 1:00 P.M., New York City time, on January 14, 2005 in book-entry form through the facilities of The Depository Trust Company, New York, New York (“ DTC ”), or at such other time and date as may be agreed upon in writing by the Company and the Underwriter. Delivery of the documents required by Section 5 hereof with respect to the Securities shall be made at such time and date at the offices of Pillsbury Winthrop LLP (“ Underwriter’s Counsel ”), New York, New York, or at such other location as may be agreed upon in writing by the Company and the Underwriter. For purposes of this Agreement, “ Closing Date ” shall mean the hour and date of such delivery and payment.

The Securities shall be issued in the form of a global certificate registered in the name of “Cede & Co.,” as nominee of DTC. For the purpose of expediting the Underwriter’s checking of the Securities, the Company agrees to make the Securities available to the Underwriter for such purpose at the offices of DTC (or a custodian thereof) in New York, New York, not later than 1:00 P.M., New York City time, on the business day preceding the Closing Date or at such other time and place as may be agreed upon by the Company and the Underwriter.

4. Covenants of Company . The Company covenants and agrees with the Underwriter that:

(a) Filing of Prospectus . The Company will promptly transmit copies of the Prospectus, and any amendments or supplements thereto, to the SEC for filing pursuant to Rule 424(b) under the 1933 Act.

(b) Copies of Registration Statement and Prospectus; Notice of Stop Orders . The Company will deliver to the Underwriter and to Underwriter’s Counsel (i) one conformed copy of the Registration Statement as originally filed, including copies of exhibits thereto (other than any exhibits incorporated by reference therein), (ii) conformed copies of any amendments to the Registration Statement, including conformed copies of the Incorporated Documents (other than exhibits thereto), and (iii) a conformed copy of each consent and certificate included or incorporated by reference in, or filed as an exhibit to, the Registration Statement as so amended; the Company will deliver to the Underwriter as soon as practicable after the date of this Agreement as many copies of the Prospectus as the Underwriter may reasonably request for the purposes contemplated by the 1933 Act; the Company will promptly advise the Underwriter of the issuance of any stop order under the 1933 Act with respect to the Registration Statement (as amended) or the institution of any proceedings therefor, or the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, of which the Company shall have received notice or otherwise have knowledge prior to the completion of the distribution of the Securities; and the Company will use its best efforts to prevent the issuance of any such stop order and, if issued, to secure the prompt removal thereof.

(c) Filing of Amendments or Supplements . During the period when a prospectus relating to any of the Securities is required to be delivered under the 1933 Act by the Underwriter or any dealer, the Company will not file any amendment or supplement to the Registration Statement, the Prospectus or any Incorporated Document to which the Underwriter or Underwriter’s Counsel shall reasonably object.

(d) Compliance with 1933 Act . During the period when a prospectus relating to any of the Securities is required to be delivered under the 1933 Act by the Underwriter or any dealer, the Company will comply, at its own expense, with all requirements imposed by the 1933 Act, as now and hereafter amended, and by the rules and regulations of the SEC thereunder, as from time to time in force, so far as necessary to permit the continuance of sales of or dealing in the Securities during such period in accordance with the provisions hereof and as contemplated by the Prospectus.

(e) Certain Events and Amendments or Supplements . If, during the period when a prospectus relating to any of the Securities is required to be delivered under the 1933 Act by the Underwriter or any dealer, (i) any event relating to or affecting the Company or of which the Underwriter shall advise the Company in writing shall occur as a result of which, in the opinion of the Company or the Underwriter, the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were

made, not misleading or (ii) it shall be necessary to amend or supplement the Registration Statement or the Prospectus to comply with the 1933 Act, the 1934 Act or the 1939 Act or the rules and regulations of the SEC thereunder, the Company will forthwith at its expense prepare and furnish to the Underwriter a reasonable number of copies of such amendment or supplement that will correct such statement or omission or effect such compliance.

(f) Blue Sky Qualifications . During the period when a prospectus relating to any of the Securities is required to be delivered under the 1933 Act by the Underwriter or any dealer, the Company will furnish such proper information as may be lawfully required and otherwise cooperate in qualifying the Securities for offer and sale under the securities or blue sky laws of such jurisdictions as the Underwriter may reasonably designate and will file and make in each year such statements or reports as are or may be reasonably required by the laws of such jurisdictions; provided, however , that the Company shall not be required to qualify as a foreign corporation, qualify as a dealer in securities or file a general consent to service of process under the laws of any jurisdiction.

(g) Earning Statement . In accordance with Rule 158 under the 1933 Act, the Company will make generally available to its security holders and to holders of the Securities, as soon as practicable, an earning statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 under the 1933 Act.

(h) Exchange Act Documents; Ratings Notification . During the period when a prospectus relating to any of the Securities is required to be delivered under the 1933 Act by the Underwriter or any dealer, the Company will file within the required time periods all documents required to be filed with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act; and the Company will promptly notify the Underwriter of any written notice given to the Company, by any “nationally recognized statistical rating organization” within the meaning of Rule 436(g)(2) under the 1933 Act (a “ Rating Agency ” ) of any decrease in any rating of any securities of the Company, any intended decrease in any such rating or of any intended change in any such rating that does not indicate the direction of the possible change of any such rating, in each case by any such Rating Agency.

(i) No Issuance Period . During the period beginning from the date of this Agreement and continuing to and including the earlier of (i) the termination of trading restrictions on the Securities, as determined by the Underwriter, and (ii) 15 days after the Closing Date, the Company will not, without the Underwriter’s prior written consent, offer for sale, sell or enter into any agreement to sell, or otherwise dispose of, any debt securities of the Company, except for the Securities and not in excess of $40,000,000 principal amount of the Company’s 5.20% Notes due January 15, 2020 being offered contemporaneously with the Securities.

(j) Payment of Expenses . Whether or not any sale of the Securities is consummated, the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of Bradley Arant Rose & White LLP, counsel for the Company, and the Accountants in connection with the registration of the Securities under the 1933 Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments or supplements

thereto and the mailing and delivering of copies thereof to the Underwriter and any dealers; (ii) the cost of printing or producing this Agreement, the Indenture, any blue sky memorandum, closing documents (including any compilations thereof) and other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 4(f) hereof, including the fees and disbursements of Underwriter’s Counsel in connection with such qualification and in connection with any such blue sky memorandum; (iv) any fees charged by a Rating Agency for rating the Securities; (v) any filing fees incident to, and the fees and disbursements of Underwriter’s Counsel in connection with, any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the fees and disbursements of the Trustee and any agent of the Trustee and the fees and disbursements of their counsel in connection with the Indenture and the Securities; and (viii) all other costs and expenses incident to the performance of the Company’s obligations hereunder that are not otherwise specifically provided for in this Section 4(j); provided, however , that if this Agreement shall be terminated as a result of a default hereunder by the Underwriter and could not have been terminated pursuant to Section 5 hereof, the Company shall then not be under any liability to the Underwriter with respect to the Securities except as provided in this Section 4(j) and Section 6 hereof; but, if for any other reason the Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Underwriter for all of its out-of-pocket expenses, including fees and disbursements of Underwriter’s Counsel, reasonably incurred by the Underwriter in making preparations for the purchase, sale and delivery of the Securities, but the Company shall then be under no further liability to the Underwriter with respect to the Securities except as provided in this Section 4(j) and Section 6 hereof. It is understood that, except as provided in this Section 4(j) and Section 6 hereof, the Underwriter will pay all of its own costs and expenses, including the fees of Underwriter’s Counsel and any advertising expenses in connection with any offers it may make.

5. Conditions to Underwriter’s Obligations . The obligations of the Underwriter under this Agreement shall be subject to the condition that all representations and warranties of the Company contained in this Agreement are, at and as of the Closing Date, true and correct, the condition that the Company shall have performed all of its obligations hereunder on or prior to the Closing Date and the following additional conditions:

(a) Filing of Prospectus with SEC; No Stop Order; Alabama Commission Order in Full Force and Effect . The Prospectus, and any supplements thereto, shall have been filed with the SEC within the time period prescribed for such filing by Rule 424(b) under the 1933 Act and in accordance with Section 4(a) hereof; all requests for additional information on the part of the SEC shall have been complied with to the Underwriter’s reasonable satisfaction; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the SEC; and the Alabama Commission Order shall be in full force and effect and not the subject of any appeal or any other proceeding and such order shall not have been amended or modified to include conditions or restrictions which the Underwriter in good faith determines to be unduly burdensome.

(b) Opinion of Underwriter’s Counsel . At the Closing Date, Underwriter’s Counsel shall have furnished to the Underwriter an opinion, dated the Closing Date, with respect to such matters as the Underwriter may reasonably request, and Underwriter’s Counsel shall have received such documents and information as it may reasonably request to enable it to pass upon such matters.

(c) Opinion of Company Counsel . At the Closing Date, counsel for the Company shall have furnished to the Underwriter an opinion, dated the Closing Date, in form and substance satisfactory to the Underwriter, to the effect that:

(i) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Alabama, with corporate power and authority to own its properties and conduct its business as described in the Prospectus and to execute and deliver, and perform its obligations under, this Agreement, the Indenture and the Securities; and the Company is not required by the nature of its business to be licensed or qualified as a foreign corporation in any other state or jurisdiction, except where the failure to be so qualified would not have a material adverse effect on the Company;

(ii) to the knowledge of such counsel, there is no pending or threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator involving the Company, of a character required to be disclosed in the Registration Statement which is not adequately disclosed in the Prospectus;

(iii) this Agreement has been duly authorized, executed and delivered by the Company;

(iv) the Securities have been duly authorized, executed, issued and delivered by the Company and constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, except as may be limited by the Exceptions, and are entitled to the benefits of the Indenture; and the Securities conform to the description thereof in the Prospectus;

(v) the Indenture has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding instrument of the Company enforceable against the Company in accordance with its terms, except as may be limited by the Exceptions; the Indenture conforms to the description thereof in the Prospectus; and the Indenture has been duly qualified under the 1939 Act;

(vi) the issue and sale of the Securities and the compliance by the Company with all of the provisions of the Securities, the Indenture and this Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject,

nor will such actions result in any violation of the provisions of the Organizational Documents or any statute, rule, regulation or other law, or any order or judgment known to such counsel, of any court or governmental agency or body having jurisdiction over the Company or any of its properties;

(vii) the Alabama Commission Order is in full force and effect and is sufficient to permit the Company to enter into and perform the transactions contemplated by this Agreement, the Securities and the Indenture, and no other consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body having jurisdiction over the Company or any of its properties is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement and the Indenture, except such as have been obtained under the 1933 Act and the 1939 Act and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or blue sky laws in connection with the Underwriter’s purchase and distribution of the Securities;

(viii) Energen Corporation is the sole owner of all of the issued and outstanding common stock of the Company and has filed an annual exemption statement on Form U-3A-2 pursuant to Rule 2 under the 1935 Act, and Energen Corporation and each of its subsidiaries are exempt from all of the provisions of the 1935 Act except Section 9(a)(2) thereof;

(ix) the Registration Statement, at the Effective Date, and the Prospectus, at the time it was filed with the SEC pursuant to Rule 424(b) under the 1933 Act (except in each case as to financial statements and other financial and statistical data contained or incorporated by reference therein, upon which such counsel need not pass), complied as to form in all material respects with the requirements of the 1933 Act and the 1939 Act and the respective rules and regulations of the SEC thereunder; each Incorporated Document as originally filed pursuant to the 1934 Act (except as to financial statements and other financial and statistical data contained or incorporated by reference therein, upon which such counsel need not pass) complied as to form when so filed in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC thereunder; the Registration Statement has become, and on the Closing Date is, effective under the 1933 Act and, to the best of such counsel’s knowledge, no proceedings for a stop order with respect thereto are threatened or pending under Section 8 of the 1933 Act; and nothing has come to the attention of such counsel that has caused it to believe that the Registration Statement (except as to financial statements and other financial and statistical data contained or incorporated by reference therein, upon which such counsel need not pass), at the Effective Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (except as to financial statements and other financial and statistical data contained or incorporated by reference therein, upon which such counsel need not pass), at the time it was filed with the SEC pursuant to Rule 424(b) under the 1933 Act or on the Closing Date, included or includes any untrue statement of a material fact or omitted or omits to state a material fact necessary in order

to make the statements therein, in the light of the circumstances under which they were made, not misleading; and

(x) such counsel does not know of any franchise, contract or other document required to be described in, or filed as an exhibit to, the Registration Statement or incorporated by reference in the Prospectus that are not so described or filed or incorporated by reference as required; and the statements included or incorporated by reference in the Prospectus describing material contracts or agreements relating to the Company fairly summarize such matters.

In rendering such opinion, such counsel (A) may rely as to matters involving the application of laws of any jurisdiction other than the State of Alabama or the United States, to the extent deemed proper and specified in such opinion, upon the opinion of other counsel of good standing believed to be reliable and who are satisfactory to Underwriter’s Counsel provided that the Underwriter is an addressee of or is otherwise entitled to rely on such opinions, (B) may rely as to matters of fact, to the extent deemed proper, on certificates of responsible officers of the Company and public officials and (C) need not pass upon any information contained or incorporated by reference in the Registration Statement or the Prospectus relating to DTC.

(d) Letter of Accountants . On the date of this Agreement and at the Closing Date, the Accountants shall have furnished to the Underwriter letters, dated the date of this Agreement and the Closing Date, respectively, in form and substance satisfactory to the Underwriter, confirming that they are independent registered accountants within the meaning of the 1933 Act and the rules and regulations of the SEC thereunder with respect to the Company and stating in effect that:

(i) in the opinion of the Accountants, the financial statements and schedules included or incorporated by reference in the Prospectus and audited by them comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1934 Act and the respective rules and regulations of the SEC thereunder; and

(ii) on the basis of a reading of the unaudited financial statements included or incorporated by reference in the Prospectus and the latest available interim unaudited financial statements of the Company, the performance of the procedures specified by the Public Company Accounting Oversight Board (United States) for a review of any such financial statements as described in Statement on Auditing Standards No. 100, inquiries of officials of the Company responsible for financial and accounting matters and a reading of the minutes of meetings of the stockholder, the Board of Directors of the Company and the Audit and Finance Committees of Energen Corporation through a specified date not more than five days prior to the date of the applicable letter, nothing came to the attention of the Accountants that caused them to believe that: (A) any material modification should be made to the unaudited financial statements included or incorporated by reference in the Prospectus for them to be in conformity with generally accepted accounting principles or any such financial statements do not comply as to form in all material respects with the applicable accounting requirements of the 1933 Act or the 1934 Act and the respective rules and regulations of the SEC thereunder; (B) for the

twelve months ended as of the date of the most recent available financial statements of the Company, there were any decreases in operating revenues, operating income, other income or net income as compared with the comparable period of the preceding year; or (C) at the date of the most recent available financial statements of the Company and at a subsequent date not more than five days prior to the date of such letter, there was any change in the capital stock or long-term debt of the Company or any decrease in its net assets as compared with the amounts shown in the most recent balance sheet included or incorporated by reference in the Prospectus, except in all instances for changes or decreases that the Prospectus discloses have occurred or may occur, or for changes or decreases that are described in such letter that are reasonably satisfactory to the Underwriter.

Such letter shall also cover such other matters as the Underwriter shall reasonably request, including but not limited to the Company’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Company’s financial statements included or incorporated by reference in the Prospectus and any other information of an accounting, financial or statistical nature included therein (including Exhibit 12 to the Registration Statement).

(e) No Material Changes . (i) The Company shall not have sustained, since the date of the most recent financial statements included or incorporated by reference in the Prospectus, any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Prospectus, and (ii) since the respective dates as of which information is given in the Prospectus, otherwise than as set forth in the Prospectus, there shall not have been any change in the capital stock, long-term debt or net assets of the Company, any change, or any development involving a prospective change, in or affecting the business, general affairs, management, properties, financial position, stockholder’s equity or results of operations of the Company, or any transaction entered into by the Company, the effect of which, in any such case described in clause (i) or (ii), is in the Underwriter’s judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus.

(f) Ratings; No Downgrading of Ratings or Credit Review . Moody’s Investors Service, Inc. and Standard & Poor’s Rating Services shall have publicly assigned to the Securities ratings of at least A1 and A-, respectively, which ratings shall be in full force and effect at the Closing Date; and, on or after the date of this Agreement, (i) no downgrading, withdrawal or suspension shall have occurred in the rating accorded any of the Company’s securities by any Rating Agency and (ii) no Rating Agency shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s securities.

(g) Nonoccurrence of Certain Events . On or after the date of this Agreement, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally by the SEC, any national securities exchange or The Nasdaq Stock

Market; (ii) a suspension or material limitation in trading in the Company’s securities by the SEC, any national securities exchange or The Nasdaq Stock Market; (iii) a general moratorium on commercial banking activities declared by Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; or (iv) any material adverse change in the financial markets in the United States or the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event specified in this clause (vi), in the Underwriter’s judgment, makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus.

(h) Officers’ Certificate . At the Closing Date, the Company shall have furnished or caused to be furnished to the Underwriter a certificate of the Chairman of the Board or the President of the Company and the principal financial or accounting officer of the Company satisfactory to the Underwriter as to the accuracy of the representations and warranties of the Company herein on and as of the Closing Date, as to the performance by the Company of all of its obligations hereunder to be performed on or prior to the Closing Date, as to the matters set forth in Sections 5(a) and 5(e) hereof and as to such other matters as the Underwriter may reasonably request.

In case any of the conditions specified above in this Section 5 shall not have been fulfilled, this Agreement may be terminated by the Underwriter upon mailing or otherwise delivering written notice thereof to the Company. Any such termination shall be without liability of either party to the other party except as otherwise provided in Section 4(j) hereof and except for any liability under Section 6 hereof.

6. Indemnification and Contribution

(a) Indemnification by Company . The Company will indemnify and hold harmless the Underwriter for and against any losses, damages or liabilities, joint or several, to which the Underwriter may become subject, under the 1933 Act or otherwise, insofar as such losses, damages or liabilities (or actions or claims in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Underwriter for any legal or other expenses incurred by the Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred (including such losses, damages, liabilities or expenses to the extent of the aggregate amount paid in settlement of any such action or claim, provided that (subject to Section 6(c) hereof) any such settlement is effected with the written consent of the Company); provided, however, that the Company shall not be liable in any such case to the extent that any such loss, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement, the Prospectus or any such amendment or supplement thereto in reliance upon and in conformity with the Underwriter Information.

(b) Indemnification by the Underwriter . The Underwriter will indemnify and hold harmless the Company for and against any losses, damages or liabilities to which the Company may become subject, under the 1933 Act or otherwise, insofar as such losses, damages or liabilities (or actions or claims in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus or any amendment or supplement thereto, or arise out of are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement, the Prospectus or any such amendment or supplement, in reliance upon and in conformity with the Underwriter Information, and will reimburse the Company for any legal or other expenses incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred (including such losses, damages, liabilities or expenses to the extent of the aggregate amount paid in settlement of any such action or claim, provided that (subject to Section 6(c) hereof) any such settlement is effected with the written consent of the Underwriter).

(c) General . Promptly after receipt by an indemnified party under Section 6(a) or 6(b) hereof of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under Section 6(a) or 6(b) hereof, notify such indemnifying party in writing of the commencement thereof, but the failure so to notify such indemnifying party shall not relieve such indemnifying party from any liability except to the extent that it has been prejudiced in any material respect by such failure or from any liability that it may have to any such indemnified party otherwise than under Section 6(a) or 6(b) hereof. In case any such action shall be brought against any such indemnified party and it shall notify such indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party under Section 6(a) or (b) hereof similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of such indemnified party, be counsel to such indemnifying party), and, after notice from such indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party under Section 6(a) or 6(b) hereof for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. If at any time such indemnified party shall have requested such indemnifying party under Section 6(a) or 6(b) hereof to reimburse such indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a) or (b) hereof effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of such request for reimbursement, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request for reimbursement prior to the date of such settlement. No such indemnifying party shall, without the written consent of such indemnified party, effect the

settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not such indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (A) includes an unconditional release of such indemnified party from all liability arising out of such action or claim and (B) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any such indemnified party. In no event shall such indemnifying parties be liable for the fees and expenses of more than one counsel, including any local counsel, for all such indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances.

(d) Contribution . If the indemnification provided for in this Section 6 is unavailable to or insufficient to indemnify or hold harmless an indemnified party under Section 6(a) or 6(b) hereof in respect of any losses, damages or liabilities (or actions or claims in respect thereof) referred to therein, then each indemnifying party under Section 6(a) or 6(b) hereof shall contribute to the amount paid or payable by such indemnified party as a result of such losses, damages or liabilities (or actions or claims in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriter on the other hand from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if such indemnified party failed to give the notice required under Section 6(c) hereof and such indemnifying party was prejudiced in a material respect by such failure, then each such indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriter on the other hand in connection with the statements or omissions that resulted in such losses, damages or liabilities (or actions or claims in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriter on the other hand shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriter. The relative fault of the Company on the one hand and the Underwriter on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriter and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriter agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to above in this Section 6(d). The amount paid or payable by such an indemnified party as a result of the losses, damages or liabilities (or actions or claims in respect thereof) referred to above in this Section 6(d) shall be deemed to include any legal or other expenses incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6(d), the Underwriter shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that the Underwriter has otherwise been required to pay by reason of such untrue or alleged

untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(e) Scope of Obligations . The obligations of the Company under this Section 6 shall be in addition to any liability that the Company may otherwise have and shall extend, upon the same terms and conditions, to each officer, director, employee, agent or other representative and to each person, if any, who controls the Underwriter within the meaning of the Section 15 of the 1933 Act and Section 20 of the 1934 Act; and the obligations of the Underwriter under this Section 6 shall be in addition to any liability that the Underwriter may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company who signed the Registration Statement and to each person, if any, who controls the Company within the meaning of Section 15 of 1933 Act and Section 20 of the 1934 Act.

7. Representations, Warranties and Agreements to Survive Delivery . The respective indemnities, agreements, representations, warranties and other statements of the Company and the Underwriter, as set forth in this Agreement or made by or on behalf of the Company or them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of the Underwriter, any officer, director, employee, agent or other representative of the Underwriter or any controlling person of the Underwriter, or the Company, any officer or director of the Company who signed the Registration Statement or any controlling person of the Company, and shall survive delivery of and payment for the Securities.

8. Notices . All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriter shall be directed to Edward D. Jones & Co., L.P. at the address set forth on the first page of this Agreement, attention of James A. Krekeler, Partner; and notices to the Company shall be directed to Alabama Gas Corporation, 605 Richard Arrington, Jr. Boulevard North, Birmingham, Alabama 35203-2707, attention of Geoffrey C. Ketcham, Executive Vice President and Chief Financial Officer.

9. Miscellaneous . The rights and duties of the parties to this Agreement shall, pursuant to New York General Obligations Law Section 5-1401, be governed by the law of the State of New York. This Agreement shall be binding upon, and inure solely to the benefit of, the Company and the Underwriter except to the extent provided in Section 6(e) hereof, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No person who purchases any of the Securities from the Underwriter shall be deemed a successor or assign by reason merely of such purchase. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. The word “or” shall not be exclusive, and all references in this Agreement to the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or subdivision hereof, and the captions to such Sections and subdivisions are for convenience only and shall not affect the construction hereof.

If the foregoing is in accordance with your understanding, please sign and return to the Company the enclosed duplicate hereof, whereupon this Agreement will become a binding agreement between the Company and the Underwriter in accordance with its terms.


Very truly yours,

A LABAMA G AS C ORPORATION

By:	/s/ G.C. Ketcham
	Name:	G.C. Ketcham
	Title:	Executive Vice President, Chief Financial Officer and Treasurer


Accepted as of the date hereof:

E DWARD D. J ONES & C O ., L.P.

By:	/s/ James A. Krekeler
	Name:	James A. Krekeler
	Title:	Principal

EXHIBIT 1.2

A LABAMA G AS C ORPORATION

$40,000,000

5.20% N OTES DUE J ANUARY 15, 2020

Underwriting Agreement

January 11, 2005

A.G. Edwards & Sons, Inc.

One North Jefferson Avenue

St. Louis, Missouri 63103

Ladies and Gentlemen:

Alabama Gas Corporation, an Alabama corporation (the “ Company ”), hereby confirms its agreement with A.G. Edwards & Sons, Inc. (the “ Underwriter ”) as follows:

1. Purchase and Sale . Upon the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, the Company agrees to sell to the Underwriter, and the Underwriter agrees, at the time and place herein specified, to purchase from the Company $40,000,000 principal amount of the Company’s 5.20% Notes due January 15, 2020 (the “ Securities ”), at the purchase price of 99.35% of the principal amount thereof and having the terms set forth in the Prospectus (as defined in Section 2(b) hereof). The Securities will be issued pursuant to an Indenture dated as of November 1, 1993 (as amended and supplemented, the “ Indenture ”) between the Company and The Bank of New York, as successor to NationsBank of Georgia, National Association (the “ Trustee” ).

2. Representations and Warranties of Company . The Company represents and warrants to, and covenants and agrees with, the Underwriter that:

Company by the Underwriter expressly for use in the Prospectus, which for purposes of this Agreement shall be deemed to consist solely of (1) the statements with respect to the delivery of the Securities in the last paragraph on the cover page of the Prospectus, and (2) the statements in the fifth paragraph, the third and fourth sentences of the seventh paragraph, the eighth paragraph, and, to the extent it relates to the Underwriter, the ninth paragraph, in each case, under the caption “Underwriting” in the prospectus supplement (as defined herein) (collectively, the “ Underwriter Information ”) or (y) that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification of the Trustee on Form T-1 under the 1939 Act. For purposes of this Agreement, “ Prospectus ” shall mean the prospectus included in the Registration Statement at the initial Effective Date, as such prospectus has been amended or supplemented as of the date hereof, including by the prospectus supplement relating to the Securities as first filed with the SEC pursuant to Rule 424(b) under the 1933 Act in accordance with Section 4(a) of this Agreement (the “Prospectus Supplement”), and shall be deemed to include the Incorporated Documents as of the date hereof.

(e) Agreement . This Agreement has been duly authorized, executed and delivered by the Company.

(g) Material Changes . The Company has not sustained, since the date of the most recent financial statements included or incorporated by reference in the Prospectus, any material

3. Offering; Delivery of Securities .

4. Covenants of Company . The Company covenants and agrees with the Underwriter that:

(a) Filing of Prospectus . The Company will promptly transmit copies of the Prospectus, and any amendments or supplements thereto, to the SEC for filing pursuant to Rule 424(b) under the 1933 Act.

(i) No Issuance Period . During the period beginning from the date of this Agreement and continuing to and including the earlier of (i) the termination of trading restrictions on the Securities, as determined by the Underwriter, and (ii) 15 days after the Closing Date, the Company will not, without the Underwriter’s prior written consent, offer for sale, sell or enter into any agreement to sell, or otherwise dispose of, any debt securities of the Company, except for the Securities and not in excess of $40,000,000 principal amount of the Company’s 5.70% Notes due January 15, 2035 being offered contemporaneously with the Securities.

(iii) this Agreement has been duly authorized, executed and delivered by the Company;

to make the statements therein, in the light of the circumstances under which they were made, not misleading; and

6. Indemnification and Contribution .

8. Notices . All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriter shall be directed to A.G. Edwards & Sons, Inc. at the address set forth on the first page of this Agreement, attention of Lester H. Krone, Managing Director; and notices to the Company shall be directed to Alabama Gas Corporation, 605 Richard Arrington, Jr. Boulevard North, Birmingham, Alabama 35203-2707, attention of Geoffrey C. Ketcham, Executive Vice President and Chief Financial Officer.


Very truly yours,

A LABAMA G AS C ORPORATION

By:		/s/ G.C. Ketcham
		Name: G.C. Ketcham
		Title: Executive Vice President, Chief Financial Officer and Treasurer

Accepted as of the date hereof:


A.G. E DWARDS & S ONS , I NC .

By:		/s/ Joyce Opinsky
		Name: Joyce Opinsky
		Title: Vice President

EXHIBIT 4.1

[FORM OF 5.70% NOTE DUE JANUARY 15, 2035]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE TO BE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

Unless and until this Note is exchanged in whole or in part for certificated Notes registered in the names of the various beneficial holders hereof as then certified to the Company by the Depositary or a successor depositary, this Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor depositary or a nominee of such successor depositary.

This Note may be exchanged for certificated Notes registered in the names of the various beneficial owners hereof only if (a) the Depositary notifies the Company that it is unwilling or unable to continue as a depositary for this Note or has ceased to be qualified to act as such or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed by the Company within 90 days, (b) the Company, in its sole discretion, determines at any time that the 5.70% Notes due January 15, 2035 (the “Notes”) will no longer be represented by this global note, or (c) there shall have occurred and be continuing an Event of Default with respect to the Notes.


No.		CUSIP No. 010284 AK 3

ALABAMA GAS CORPORATION

5.70% Notes due January 15, 2035


Principal Amount:		$

Regular Record Date:		1st calendar day of the month in which the Interest Payment Date occurs

Original Issue Date:		January 14, 2005

Stated Maturity Date:		January 15, 2035

Interest Payment Date:		January 15, April 15, July 15 and October 15, beginning April 15, 2005

Interest Rate:		5.70% per annum

Authorized Denominations:		$1,000 or any integral multiple thereof

Initial Redemption Date:		January 15, 2010

Alabama Gas Corporation, a corporation duly organized and existing under the laws of the State of Alabama (herein called the “Company”, which term includes any successor corporation under the Indenture referred to hereinafter), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of Dollars ($ ) on the Stated Maturity Date specified above, and to pay interest thereon from the Original Issue Date specified above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on January 15, April 15, July 15 and October 15 in each year commencing April 15, 2005, at the Interest Rate per annum specified above until the principal hereof is paid or made available for payment and on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity Date or on a Redemption Date or upon acceleration) shall, as provided in such Indenture, be paid to the Person in whose name this Note is registered at the close of business on the Regular Record Date for such interest (as specified above) next preceding such Interest Payment Date, provided that any interest payable at the Stated Maturity Date or, if applicable, on any Redemption Date or upon acceleration, will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder of

the Note on such Regular Record Date and may either be paid to the Person in whose name this Note is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than ten (10) nor more than fifteen (15) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months. If any Interest Payment Date, any Redemption Date or the Stated Maturity Date shall not be a Business Day, payment of the amounts due on this Note on such date may be made on the next succeeding Business Day, as if each such payment were made on the date such payment were due, and no interest shall accrue on such amounts for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity Date, as the case may be, to such Business Day. A “Business Day” shall mean any day other than a Saturday, a Sunday, a day on which banking institutions and trust companies in the city in which is located any principal office or agency maintained for the payment of principal of or interest on this Note are authorized or required by law, regulation or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee is closed for business.

Payment of the principal of, premium, if any, and interest on, this Note at the Stated Maturity Date or earlier redemption shall be paid by wire transfer in immediately available funds (except that payment on certificated Notes shall be paid by check except in certain circumstances) upon surrender of this Note at the Corporate Trust Office of the Trustee or at such other office or agency as may be designated for such purpose by the Company from time to time. Payment of the principal of, premium, if any, and interest on this Note, as aforesaid, shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

Unless the certificate of authentication hereon has been executed by the Trustee by manual signature of an authorized officer, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:


ALABAMA GAS CORPORATION

By:


Its and Treasurer



By:


Its and Chief Executive Officer

[Seal of ALABAMA GAS CORPORATION appears here]

CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to in the within-mentioned Indenture.

Dated:


THE BANK OF NEW YORK, as Trustee

By:
		Authorized Officer

(Reverse Side of Note)

This Note is one of a duly authorized issue of Securities of the Company issued and issuable in one or more series under an Indenture, dated as of November 1, 1993 (such Indenture, together with any constituent instruments establishing the terms of particular Securities, being herein called the “Indenture”), of the Company to The Bank of New York (as successor to NationsBank of Georgia, National Association), as trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a more complete statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. The acceptance of this Note shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture. This Note is one of the series designated on the face hereof as 5.70% Notes due January 15, 2035 in the aggregate principal amount of $40,000,000. Capitalized terms used but not defined herein shall have the meanings set forth in the Indenture.

The Company shall have the right, subject to the terms and conditions of the Indenture, to redeem this Note, in whole or in part, at any time and from time to time on or after January 15, 2010, at the option of the Company, without premium, at a Redemption Price equal to 100% of the principal amount being redeemed plus accrued but unpaid interest on the principal amount being redeemed to the Redemption Date.

In the event that less than all of the Notes are to be redeemed at any time, selection of such Notes for redemption will be made by The Depository Trust Company (the “Depositary”) during any period the Notes are issued in the form of a global security registered in the name of the Depositary or a nominee thereof; provided that during any period the Notes are issued in certificated form, the selection of such Notes for redemption will be made by the Trustee by lot or by such other method as the Trustee in its sole discretion shall deem fair and appropriate. In no event shall notes of a principal amount of $1,000 or less be redeemed in part. Notice of redemption shall be given by mail to Holders of the Notes to be redeemed, not less than 30 days nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture. If, at the time notice of redemption is given, the redemption moneys are not held by the Trustee, the redemption may be made subject to their receipt on or before the date fixed for redemption and such notice shall be of no effect unless such moneys are so received. If the redemption notice is given and funds deposited as required by the Indenture, then interest will cease to accrue on and after the Redemption Date on the Notes or portions of Notes called for redemption. If the Company does not deposit redemption moneys on or before the date fixed for redemption, the principal amount of the Notes called for redemption will continue to bear interest as the rate of 5.70% per annum until paid.

In the event of redemption of this Note in part only, a new Note or Notes of this series, of like tenor, for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

Unless the Notes have been declared due and payable prior to the Started Maturity Date by reason of an Event of Default, or the Notes have been previously redeemed or otherwise

repaid, the Company shall be obligated to redeem all or part of this Note, in integral multiples of $1,000 principal amount, upon the request of the representative of a deceased beneficial owner thereof (or a surviving joint tenant(s) by the entirety or the trustee of a trust to the extent hereinafter specified); provided, however, that during the period from the Original Issue Date through and including January 15, 2006 (the “Initial Period”), and during any twelve-month period which ends on and includes each January 15 thereafter (each, a “Subsequent Period”), the Company will not be required to redeem (1) during any such period, on behalf of any one deceased beneficial owner, any interest in Notes that exceeds $25,000 in principal amount, or (2) during any such period, ownership interests in the Notes exceeding $800,000 in aggregate principal amount for all representatives so requesting redemption. A request for redemption may be presented to the participant through whom the deceased beneficial owner owned such interest in the Note at any time and in any principal amount. If the Company, although not obligated to do so, chooses to redeem interests in the Notes of this series in excess of the $25,000 limitation, such redemption, to the extent it exceeds the $25,000 limitation with respect to any deceased beneficial owner, shall not be included in the computation of the $800,000 aggregate limitation for such Initial Period or any Subsequent Period. If the Company, although not obligated to do so, chooses to redeem interests in the Notes of this series in excess of the $800,000 aggregate limitation, any such redemption, to the extent it exceeds the $800,000 aggregate limitation, shall not reduce the aggregate limitation for any Subsequent Period.

A request for redemption of Notes may be made by delivering a request to the participant through whom the deceased beneficial owner owned such interest in the Note, in form satisfactory to the participant, together with evidence of death and authority of the representative satisfactory to the participant, such waivers, notices or certificates as may be required under applicable state or federal law, and such other evidence of the right to redemption as the participant shall require. The redemption request shall specify the principal amount and maturity or maturities of the Notes to be redeemed, provided that this principal amount shall be in integral multiples of $1,000. The participant shall deliver the redemption request to the Depositary, who shall in turn forward the request to the Trustee. Subject to the $25,000 limitation and the $800,000 aggregate limitation, the Company will redeem the interest of such deceased beneficial owner in the Notes within sixty (60) days following receipt by the Company of the redemption request from the Trustee. If redemption requests exceed the $800,000 aggregate limitation during the Initial Period or any Subsequent Period, then such excess redemption requests will be applied in the order received by the Trustee to successive Subsequent Periods, regardless of the number of Subsequent Periods required to redeem the Notes.

The Company may at any time notify the Trustee that it will redeem, on a date not less than 30 days thereafter, all or any such principal amount of Notes for which redemption requests have been received but which are not then eligible for redemption by reason of the $25,000 individual limitation or the $800,000 aggregate limitation. Any Notes which are so redeemed shall be redeemed in the order of receipt of redemption requests by the Trustee.

The price to be paid by the Company for Notes to be redeemed pursuant to a redemption request will be one hundred percent (100%) of the principal amount thereof plus accrued but unpaid interest to the date of payment. Payment for interests in the Notes that are to be redeemed shall be made to the Depositary upon presentation of Notes to the Trustee for redemption in the aggregate principal amount specified in the redemption request submitted to

the Trustee by the Depositary that are to be fulfilled in connection with such payment. The principal amount of any Notes acquired or redeemed by the Company other than by redemption at the option of any representative of a deceased beneficial owner shall not be included in the computation of either the $25,000 limitation or the $800,000 aggregate limitation for the Initial Period or any Subsequent Period.

An interest in a Note held in tenancy by the entirety, joint tenancy or by tenants in common will be deemed to be held by a single beneficial owner and the death of a tenant by the entirety, joint tenant or tenant in common will be deemed the death of a beneficial owner. The death of a person who, during his lifetime, was entitled to substantially all of the rights of a beneficial owner of an interest in the notes will be deemed the death of the beneficial owner, regardless of the recordation of such interest on the records of the participant, if such rights can be established to the satisfaction of the participant. Such interests shall be deemed to exist in typical cases of nominee ownership, ownership under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, community property or other similar joint ownership arrangements, including individual retirement accounts or Keogh [H.R. 10] plans maintained solely by or for the decedent or by or for the decedent and any spouse, and trust and certain other arrangements where one person has substantially all of the rights of a beneficial owner during such person’s lifetime.

In the case of a redemption request which is presented on behalf of a deceased beneficial owner and which has not been fulfilled at the time the Company gives notice to the Trustee of its election to redeem the Notes, the Notes which are the subject of the pending redemption request shall be redeemed prior to any other Notes.

Any redemption request may be withdrawn by the person(s) presenting the same upon delivery of a written request for such withdrawal given by the participant on behalf of such person(s) to the Depositary and by the Depositary to the Trustee not less than 60 days prior to payment thereof by the Company.

The Company may, at its option, purchase any Notes for which redemption requests have been received in lieu of redeeming such Notes. Any Notes so purchased by the Company shall either be reoffered for sale and sold within 180 days after the date of purchase or presented to the Trustee for redemption and cancellation. Any such acquisition of Notes by the Company will not be included in the computation of the $25,000 individual limitation or the $800,000 aggregate limitation for the Initial Period or any Subsequent Period.

During such time or times as this Note is not represented by a global security and is issued in definitive form, all references in this Note to participants and the Depositary, including the Depositary’s governing rules, regulations and procedures, shall be deemed deleted, all determinations which under this Note the participants are required to make shall be made by the Company (including, without limitation, determining whether the applicable decedent is in fact the beneficial owner of the interest in this Note or is in fact deceased and whether the representative is duly authorized to request redemption on behalf of the applicable beneficial owner), all redemption requests, to be effective, shall be delivered by the representative to the trustee, with a copy to the Company, and shall be in the form of a redemption request (with appropriate changes to reflect the fact that such redemption request is being executed by a

representative) and, in addition to all documents that are otherwise required to accompany a redemption request, shall be accompanied by this Note.

If an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of and interest on the Notes of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the Trustee to enter into one or more supplemental indentures for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series then Outstanding under the Indenture, considered as one class; provided, however, that if there shall be Securities of more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided, further, that if the Securities of any series shall have been issued in more than one Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected, considered as one class, shall be required. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities then Outstanding, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, places and rates, in the coin or currency, and in the manner, prescribed herein and in the Indenture.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer or exchange of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer or exchange at the offices of The Bank of New York, Jacksonville, Florida or such other office or agency as may be designated by the Company from time to time, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar, duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of like tenor and aggregate principal amount, will be issued to the designated transferee or transferees or to the Holder, as the case may be. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like tenor and aggregate principal amount of Notes of this series, of any authorized denominations, as requested by the Holder surrendering the same, upon surrender of the Note or Notes to be exchanged at the office or agency designated by the Company from time to time. The Company shall not be required to (a) issue, register the transfer of or exchange Notes of this series during a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Notes of this series called for redemption or (b) issue, register the transfer of or exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

The Notes of this series are issuable only in registered form, without coupons, in denominations of $1,000, and any amount in excess thereof that is an integral multiple of $1,000.

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the absolute owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York.

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

[please insert social security or

other identifying number of assignee]

[please print or typewrite name and address of assignee]

the within Note of ALABAMA GAS CORPORATION and does hereby irrevocably constitute and appoint , Attorney, to transfer said Note on the books of the above-mentioned Company, with full power of substitution in the premises.

Dated:

Notice: The signature to this assignment must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatsoever.

EXHIBIT 4.2

[FORM OF 5.20% NOTE DUE JANUARY 15, 2020]

This Note may be exchanged for certificated Notes registered in the names of the various beneficial owners hereof only if (a) the Depositary notifies the Company that it is unwilling or unable to continue as a depositary for this Note or has ceased to be qualified to act as such or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed by the Company within 90 days, (b) the Company, in its sole discretion, determines at any time that the 5.20% Notes due January 15, 2020 (the “Notes”) will no longer be represented by this global note, or (c) there shall have occurred and be continuing an Event of Default with respect to the Notes.


No.		CUSIP No. 010284 AL 1

ALABAMA GAS CORPORATION

5.20% Notes due January 15, 2020


Principal Amount:		$

Regular Record Date:		1st calendar day of the month in which the Interest Payment Date occurs

Original Issue Date:		January 14, 2005

Stated Maturity Date:		January 15, 2020

Interest Payment Date:		January 15 and July 15, beginning July 15, 2005

Interest Rate:		5.20% per annum

Authorized Denominations:		$1,000 or any integral multiple thereof

Initial Redemption Date:		At initial issuance

Alabama Gas Corporation, a corporation duly organized and existing under the laws of the State of Alabama (herein called the “Company”, which term includes any successor corporation under the Indenture referred to hereinafter), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of Dollars ($ ) on the Stated Maturity Date specified above, and to pay interest thereon from the Original Issue Date specified above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on January 15 and July 15 in each year commencing July 15, 2005, at the Interest Rate per annum specified above until the principal hereof is paid or made available for payment and on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity Date or on a Redemption Date or upon acceleration) shall, as provided in such Indenture, be paid to the Person in whose name this Note is registered at the close of business on the Regular Record Date for such interest (as specified above) next preceding such Interest Payment Date, provided that any interest payable at the Stated Maturity Date or, if applicable, on any Redemption Date or upon acceleration, will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder of the Note on such Regular Record Date and may either be paid to the Person in whose name this Note is registered

at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than ten (10) nor more than fifteen (15) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:


ALABAMA GAS CORPORATION

By:


Its and Treasurer



By:


Its and Chief Executive Officer

[Seal of ALABAMA GAS CORPORATION appears here]

CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to in the within-mentioned Indenture.

Dated:


THE BANK OF NEW YORK,
as Trustee

By:
		Authorized Officer

(Reverse Side of Note)

This Note is one of a duly authorized issue of Securities of the Company issued and issuable in one or more series under an Indenture, dated as of November 1, 1993 (such Indenture, together with any constituent instruments establishing the terms of particular Securities, being herein called the “Indenture”), of the Company to The Bank of New York (as successor to NationsBank of Georgia, National Association), as trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a more complete statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. The acceptance of this Note shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture. This Note is one of the series designated on the face hereof as 5.20% Notes due January 15, 2020 in the aggregate principal amount of $40,000,000. Capitalized terms used but not defined herein shall have the meanings set forth in the Indenture.

The Company shall have the right, subject to the terms and conditions of the Indenture, to redeem this Note, in whole at any time or in part from time to time, at the option of the Company, at a Redemption Price equal to the greater of (1) 100% of the principal amount being redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed, discounted to the Redemption Date on a semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the “Treasury Yield,” as defined below, plus 0.20%, plus in each case accrued interest to the Redemption Date.

As used in the Notes, the following terms shall have the following respective meanings.

“Treasury Yield” means, with respect to any Redemption Date, the rate per year equal to the semiannual equivalent yield to maturity of the “Comparable Treasury Issue,” as defined below, assuming a price for the Comparable Treasury Issue, expressed as a percentage of its principal amount equal to the “Comparable Treasury Price,” as defined below, for the Redemption Date.

“Comparable Treasury Issue” means the United States Treasury security selected by an “Independent Investment Banker,” as defined below, as having a maturity comparable to the remaining term of the Notes that the Independent Investment Banker would utilize, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes.

“Independent Investment Banker” means one of the “Reference Treasury Dealers” as defined below, appointed by the Trustee after consultation with the Company.

“Comparable Treasury Price” means, with respect to any Redemption Date, (1) the average of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, on the third Business Day preceding the Redemption Date, as set forth in the daily statistical release, or any successor release, published by the Federal Reserve Bank of New York and designated “Composite 3:30 p.m. Quotations for U.S.

Government Securities” or (2) if that release or any successor release is not published or does not contain those prices on that Business Day, (A) the average of the “Reference Treasury Dealer Quotations,” as defined below, for the Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations for the Redemption Date, or (B) if the Trustee obtains fewer than four Reference Treasury Dealer Quotations, the average of all the quotations which the Trustee obtains.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Company by the Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding the Redemption Date.

“Reference Treasury Dealer” means any primary U.S. Government securities dealer in New York City selected by the Company.

In the event that less than all of the Notes are to be redeemed at any time, selection of such Notes for redemption will be made by The Depository Trust Company (“DTC”) during any period the Notes are issued in the form of a global security registered in the name of DTC or a nominee thereof; provided that during any period the Notes are issued in certificated form, the selection of such Notes for redemption will be made by the Trustee by lot or by such other method as the Trustee in its sole discretion shall deem fair and appropriate. In no event shall notes of a principal amount of $1,000 or less be redeemed in part. Notice of redemption shall be given by mail to Holders of the Notes to be redeemed, not less than 30 days nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture. If, at the time notice of redemption is given, the redemption moneys are not held by the Trustee, the redemption may be made subject to their receipt on or before the date fixed for redemption and such notice shall be of no effect unless such moneys are so received. If the redemption notice is given and funds deposited as required by the Indenture, then interest will cease to accrue on and after the Redemption Date on the Notes or portions of Notes called for redemption. If the Company does not deposit redemption moneys on or before the date fixed for redemption, the principal amount of the Notes called for redemption will continue to bear interest as the rate of 5.20% per annum until paid.

there shall be Securities of more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided, further, that if the Securities of any series shall have been issued in more than one Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected, considered as one class, shall be required. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities then Outstanding, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

The Notes of this series are issuable only in registered form, without coupons, in denominations of $1,000, and any amount in excess thereof that is an integral multiple of $1,000.

The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York.

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

[please insert social security or

other identifying number of assignee]

[please print or typewrite name and address of assignee]

Dated:

Notice: The signature to this assignment must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatsoever.

EXHIBIT 4.3

OFFICERS’ CERTIFICATE

PURSUANT TO SECTION 301 OF THE INDENTURE

5.70% NOTES DUE JANUARY 15, 2035

We, the undersigned Wm. Michael Warren, Jr., Chairman and Chief Executive Officer, and G. C. Ketcham, Executive Vice President, Chief Financial Officer and Treasurer, of Alabama Gas Corporation (the “Company”), in accordance with Section 301 of the Indenture, dated as of November 1, 1993 (the “Indenture”), of the Company to The Bank of New York (as successor to NationsBank of Georgia, National Association), as trustee (the “Trustee”), and pursuant to the Board Resolution adopted by the Company’s Board of Directors on December 8, 2004, do hereby establish a series of debt securities with the following terms and characteristics (capitalized terms used and not defined herein have the meanings specified in the Indenture, and the lettered clauses set forth below correspond to the lettered subsections of Section 301 of the Indenture):

(a) the title of the securities of such series shall be “5.70% Notes due January 15, 2035” (the “Notes”);

(b) the aggregate principal amount of Notes which may currently be authenticated and delivered under the Indenture shall be limited to $40,000,000, except as contemplated in Section 303 of the Indenture; the Company may, in the future, without the consent of the holders of the Notes, issue and sell additional notes on the same terms and conditions (other than the issuance date, offering date and, as applicable, the initial interest payment date) and with the same CUSIP numbers as the Notes, and such additional notes shall be deemed to be part of the same series as the Notes and will vote together with all other notes of such series for purposes of amendments, waivers and all other matters with respect to such series; the form of the Notes shall be in substantially the form attached hereto as Exhibit A which form is hereby authorized and approved;

(c) except as otherwise provided in the form of Note attached hereto with respect to payment at the Stated Maturity Date (as hereinafter defined) or any redemption or acceleration thereof, interest on the Notes shall be payable to the Person or Persons in whose names the Notes are registered at the close of business on the Regular Record Date (as hereinafter defined) for such interest; any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the Holders of the Notes on such Regular Record Date and may either be paid to the Person or Persons in whose name the Notes are registered at the close of business on a Special Record Date (as defined in the Indenture) for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to the Holders of the Notes not less than ten (10) nor more than fifteen (15) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture;

(d) the principal of the Notes shall be due and payable on January 15, 2035 (the “Stated Maturity Date”), unless redeemed or otherwise repaid prior to the Stated Maturity Date as provided herein;

(e) the Notes shall bear interest at a fixed rate of 5.70% per year; interest shall accrue on any Note from the Original Issue Date specified in such Note or the most recent date to which interest has been paid or duly provided for, or, if the authentication date of any Note is after any Regular Record Date but before the next succeeding Interest Payment Date, from the next succeeding Interest Payment Date; the Interest Payment Dates for the Notes shall be January 15, April 15, July 15 and October 15 of each year, with an initial Interest Payment Date of April 15, 2005, and the Regular Record Dates with respect to the Interest Payment Dates shall be the first calendar day of the month in which the applicable Interest Payment Date falls (whether or not a Business Day); and interest shall be calculated on the basis of a 360-day year of twelve 30-day months;

(f) the corporate trust office of The Bank of New York (as successor to NationsBank of Georgia, National Association) in the City of Jacksonville, State of Florida shall be the office or agency of the Company at which the principal of and interest on the Notes shall be payable, at which Notes may be surrendered for registration of transfer and exchange and at which notices and demands to or upon the Company with respect to the Notes and the Indenture may be served;

(g) the Notes shall be redeemable in whole or in part, without premium, at any time and from time to time on or after January 15, 2010, upon not less than 30 nor more than 60 days prior written notice, at the option of the Company, at a Redemption Price equal to 100% of the principal amount being redeemed plus any accrued but unpaid interest on the principal amount being redeemed to the Redemption Date; in the event of redemption of the Notes in part only, a new Note or Notes for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof;

(h) the Company shall be obligated to redeem all or part of any Note upon the request of the representative of a deceased beneficial owner as and to the extent provided therein;

(i) the Notes shall be issued in denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000;

(j) the Notes shall be issued in global form (the “Global Notes”) and the depositary for the Global Notes shall be The Depository Trust Company; interests in the Global Notes may not be exchanged, in whole or in part, for the individual securities represented thereby, except that if (l) the depositary notifies the Company that it is unwilling or unable to continue as a depositary for the Notes or has ceased to be qualified to act as such or if at any time the depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed within 90 days, (2) the Company, in its sole discretion, determines at any time that the Notes will no longer be represented by the Global Notes, or (3) there shall have occurred and be continuing an Event of Default with respect to the Notes, then the Company will issue individual certificated Notes in exchange for the

Global Notes; so long as the depositary, or its nominee, is the registered owner of the Global Notes, such depositary or nominee, as the case may be, will be considered the owner of such Global Notes for all purposes under the Indenture and owners of beneficial interests in such Global Notes will not be considered the Holders thereof for any purpose under the Indenture; no Global Note representing the Notes shall be exchangeable, except for another Global Note of like denomination and tenor to be registered in the name of the depositary or its nominee or to a successor depositary or its nominee;

(k) not applicable;

(l) not applicable;

(m) not applicable;

(n) not applicable;

(o) not applicable;

(p) not applicable;

(q) not applicable;

(r) not applicable;

(s) no service charge shall be made for the registration of transfer or exchange of the Notes; provided, however, that the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange;

(t) if any Interest Payment Date, any Redemption Date or the Stated Maturity Date shall not be a Business Day, payment of amounts due on such date may be made on the next succeeding Business Day, and if such payment is made or duly provided for on such Business Day, no interest shall accrue on such amounts for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity Date, as the case may be, to such Business Day;

(u) Satisfaction and Discharge of the Notes:

As an additional condition to the Company satisfying and discharging the Notes pursuant to Section 701 of the Indenture, the Company shall have delivered to the Trustee an opinion of tax counsel that, based upon a change in federal income tax law after the date of issuance of the Notes or a ruling of the Internal Revenue Service, (a) the discharge of the Company’s obligations with respect to the Notes will not result in the recognition of income, gain or loss for federal income tax purposes and (b) the Holders of the Notes will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case but for the discharge.

Upon receipt by the Trustee of money or Eligible Obligations, or both, in accordance with Section 701 of the Indenture, together with the documents required by clauses (x), (y) and (z) of such Section 701 and the opinion referred to in the above paragraph, the Trustee shall, upon receipt of a Company Request, acknowledge in writing that the Note or Notes or portions thereof with respect to which such deposit was made are deemed to have been paid for all purposes of the Indenture and that the entire indebtedness of the Company in respect thereof is deemed to have been satisfied and discharged.

Nothing herein expressed or implied is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the Company, the Trustee and the Holders of the Notes, any right, remedy or claim under or by reason hereof or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements herein by and on behalf of the Company shall be for the sole and exclusive benefit of the Company, the Trustee and the Holders of the Notes.

IN WITNESS WHEREOF, we have hereunto signed our names this 14 day of January, 2005.

/s/ Wm. Michael Warren, Jr.

Wm. Michael Warren, Jr.

Chairman and Chief Executive Officer

/s/ G. C. Ketcham

G. C. Ketcham

Executive Vice President, Chief Financial Officer and Treasurer

EXHIBIT 4.4

OFFICERS’ CERTIFICATE

PURSUANT TO SECTION 301 OF THE INDENTURE

5.20% NOTES DUE JANUARY 15, 2020

(a) the title of the securities of such series shall be “5.20% Notes due January 15, 2020” (the “Notes”);

(d) the principal of the Notes shall be due and payable on January 15, 2020 (the “Stated Maturity Date”), unless redeemed or otherwise repaid prior to the Stated Maturity Date as provided herein;

(e) the Notes shall bear interest at a fixed rate of 5.20% per year; interest shall accrue on any Note from the Original Issue Date specified in such Note or the most recent date to which interest has been paid or duly provided for, or, if the authentication date of any Note is after any Regular Record Date but before the next succeeding Interest Payment Date, from the next succeeding Interest Payment Date; the Interest Payment Dates for the Notes shall be January 15 and July 15 of each year, with an initial Interest Payment Date of July 15, 2005, and the Regular Record Dates with respect to the Interest Payment Dates shall be the first calendar day of the month in which the applicable Interest Payment Date falls (whether or not a Business Day); and interest shall be calculated on the basis of a 360-day year of twelve 30-day months;

(g) the Notes shall be redeemable in whole at any time or in part from time to time, at the option of the Company, upon not less than 30 nor more than 60 days prior written notice, at the Redemption Price specified therein; in the event of redemption of the Notes in part only, a new Note or Notes for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof;

(h) not applicable;

(i) the Notes shall be issued in denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000;

Global Note representing the Notes shall be exchangeable, except for another Global Note of like denomination and tenor to be registered in the name of the depositary or its nominee or to a successor depositary or its nominee;

(k) not applicable;

(l) not applicable;

(m) not applicable;

(n) not applicable;

(o) not applicable;

(p) not applicable;

(q) not applicable;

(r) not applicable;

(u) Satisfaction and Discharge of the Notes:

Notes or portions thereof with respect to which such deposit was made are deemed to have been paid for all purposes of the Indenture and that the entire indebtedness of the Company in respect thereof is deemed to have been satisfied and discharged.

IN WITNESS WHEREOF, we have hereunto signed our names this 14 day of January, 2005.

/s/ Wm. Michael Warren, Jr.

Wm. Michael Warren, Jr.

Chairman and Chief Executive Officer

/s/ G. C. Ketcham

G. C. Ketcham

Executive Vice President, Chief Financial Officer and Treasurer

EXHIBIT 5.1

January 14, 2005

Board of Directors

Alabama Gas Corporation

605 Richard Arrington Jr. Blvd. N

Birmingham, AL 35203-2707

RE:

Alabama Gas Corporation Offering of 5.70% Notes due January 15, 2035 and 5.20% Notes due January 15, 2020

Ladies and Gentlemen:

In our capacity as counsel for Alabama Gas Corporation, an Alabama corporation (the “Company”), we have examined the Registration Statement on Form S-3 (File No. 333-121077) (the “Registration Statement”), filed by the Company with the Securities and Exchange Commission (the “Commission”) under the provisions of the Securities Act of 1933, as amended and the prospectus dated December 21, 2004 and prospectus supplement with respect thereto, dated January 11, 2005 (collectively, the “Prospectus”), with respect to the proposed offering by the Company of $40,000,000 principal amount of its 5.70% Notes due January 15, 2035 and $40,000,000 principal amount of its 5.20% Notes due January 15, 2020 (collectively, the “Notes”). The Notes will be issued pursuant to an Indenture dated as of November 1, 1993 by and between the Company and The Bank of New York, as successor to NationsBank of Georgia, National Association, as Trustee (the “Indenture”), and those certain Officers’ Certificates of the Company, to be dated as of January 14, 2005 given pursuant to Section 301 of the Indenture (the “Officers’ Certificates”). All capitalized terms which are not defined herein shall have the meanings assigned in the Registration Statement.

For purposes of rendering this opinion, we have made such factual and legal examination as we deemed necessary under the circumstances, and in that connection we have examined, among other things, originals or copies of the following:

(i)

The Articles of Incorporation of the Company, as amended to date (the “Articles of Incorporation”);

(ii)

By-laws of the Company, as amended to date (the “Bylaws”);

(iii)

The Indenture, dated as November 1, 1993, between the Company and The Bank of New York, as successor to NationsBank of Georgia, National Association, as trustee (as amended or supplemented in accordance with the terms thereof);

(iv)

The Officers’ Certificates;

(v)

The forms of the Notes;

(vi)

The Registration Statement and exhibits thereto, including the Prospectus and the Prospectus Supplements, in the form filed with the Commission;

(vii)

The Statement of Eligibility of the Trustee on Form T-1 for the Notes;

(viii)

Such records of the corporate proceedings of the Company and such other documents that we considered necessary or appropriate for the purpose of rendering this opinion; and

(ix)

Such other certificates and assurances from public officials, officers and representatives of the Company that we considered necessary or appropriate for the purpose of rendering this opinion.

Board of Directors

January 14, 2005

Page 2

Based upon the foregoing, and subject to the qualifications, limitations and exceptions set forth below, we are of the opinion that the Notes have been executed and authenticated as specified in the Indenture, as modified by the Officer’s Certificates, and issued and sold as described in the Registration Statement, the Prospectus and the Prospectus Supplements, and in accordance with the terms and conditions of the applicable underwriting agreements, the Notes are duly and validly authorized and issued, are fully paid and non-assessable debt securities of the Company, and constitute legal, valid and binding obligations of the Company in accordance with their terms.

The opinion set forth herein is subject to the following assumptions, qualifications, limitations and exceptions being true and correct at or prior to the time of the delivery of the Notes:

(a) the genuineness of all signatures on, and the authenticity of, all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies;

(b) the effectiveness of the Registration Statement and any amendments thereto will not have been terminated or rescinded;

(c) the Indenture and Notes will be duly and validly executed and delivered by the Trustee and will constitute the legal, valid and binding agreements of the Trustee; and

(d) in the case of the Indenture pursuant to which the Notes are to be issued, there shall have been no revisions or amendments to the terms or provisions contained therein which would affect any of the opinions rendered herein.

Our opinions are furnished solely with regard to the Registration Statement and Prospectus pursuant to Item 16 of Form S-3 and Item 601(b)(5) of Regulation S-K, may be relied upon only in connection with the Registration Statement and Prospectus and may not otherwise be used, quoted or referred to by or filed with any other person or entity without our prior written permission.

We hereby consent to the filing of this opinion with the Securities and Exchange Commission as an Exhibit to the Company’s Form 8-K dated January 14, 2005 and to the incorporation by reference of this opinion into the above-referenced Registration Statement. In addition, we hereby consent to the inclusion of the statements made in reference to this firm under the heading “Legal Matters” in the Prospectus.

Yours very truly,

/s/ B RADLEY A RANT R OSE & W HITE LLP