Yes, it is. We use it all the time in speech and in informal styles of writing. It has the same meaning as “but”. For example, when we say, “Tendulkar is a gifted batsman, but then, so is Dravid”, what we mean is that both Dravid and Tendulkar are gifted batsmen. Tendulkar is a gifted batsman, but so is Dravid.
Here is another example. “I would like to help you, but then my wife wouldn’t like it.” What you mean here is that you would like to help the individual, but you are not in a position to because your wife wouldn’t like it. Maybe, she will get angry — and no husband wants to make his “better half” angry!