Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Sep. 30, 2013 | |
Document and Entity Information | ' |
Entity Registrant Name | 'Athlon Energy Inc. |
Entity Central Index Key | '0001574648 |
Document Type | 'S-1 |
Pre-Effective Amendment Number | '1 |
Document Period End Date | 30-Sep-13 |
Amendment Flag | 'false |
Entity Filer Category | 'Non-accelerated Filer |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $196,888 | $8,871 |
Accounts receivable | 45,851 | 24,501 |
Derivatives, at fair value | ' | 2,246 |
Inventory | 972 | 1,022 |
Other | 1,205 | 2,486 |
Total current assets | 244,916 | 39,126 |
Properties and equipment, at cost - full cost method: | ' | ' |
Proved properties, including wells and related equipment | 1,084,881 | 788,571 |
Unproved properties | 110,095 | 89,860 |
Accumulated depletion, depreciation, and amortization | -135,689 | -73,824 |
Properties and equipment, net | 1,059,287 | 804,607 |
Derivatives, at fair value | 1,211 | 2,854 |
Debt issuance costs | 14,603 | 4,418 |
Other | 1,400 | 1,293 |
Total assets | 1,321,417 | 852,298 |
Accounts payable: | ' | ' |
Trade | 2,338 | 3,170 |
Affiliate | 2 | 935 |
Accrued liabilities: | ' | ' |
Lease operating | 5,391 | 3,858 |
Production, severance, and ad valorem taxes | 5,362 | 1,307 |
Development capital | 60,092 | 39,483 |
Interest | 16,802 | 834 |
Derivatives, at fair value | 10,185 | 592 |
Revenue payable | 19,550 | 9,330 |
Deferred taxes | 14,529 | 58 |
Other | 2,021 | 1,808 |
Total current liabilities | 136,272 | 61,375 |
Derivatives, at fair value | 992 | 519 |
Asset retirement obligations, net of current portion | 6,439 | 5,049 |
Long-term debt | 500,000 | 362,000 |
Deferred taxes | 67,878 | 2,340 |
Other | 109 | 138 |
Total liabilities | 711,690 | 431,421 |
Commitments and contingencies | ' | ' |
Equity: | ' | ' |
Partners' equity | ' | 420,877 |
Preferred stock, $.01 par value, at September 30, 2013, 50,000,000 shares authorized, none issued and outstanding | ' | ' |
Common stock, $.01 par value, at September 30, 2013, 500,000,000 shares authorized, 82,129,089 issued and outstanding | 821 | ' |
Additional paid-in capital | 588,583 | ' |
Retained earnings | 10,278 | ' |
Total stockholders' equity | 599,682 | ' |
Noncontrolling interest | 10,045 | ' |
Total equity | 609,727 | 420,877 |
Total liabilities and equity | $1,321,417 | $852,298 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 |
CONSOLIDATED BALANCE SHEETS | ' |
Preferred stock, par value (in dollars per share) | $0.01 |
Preferred stock, shares authorized | 50,000,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Common stock, par value (in dollars per share) | $0.01 |
Common stock, shares authorized | 500,000,000 |
Common stock, shares issued | 82,129,089 |
Common stock, shares outstanding | 82,129,089 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ' | ' | ' | ' |
Oil | $75,666 | $34,357 | $175,934 | $91,407 |
Natural gas | 4,164 | 2,383 | 11,894 | 5,323 |
Natural gas liquids | 8,595 | 5,346 | 20,508 | 14,379 |
Total revenues | 88,425 | 42,086 | 208,336 | 111,109 |
Production: | ' | ' | ' | ' |
Lease operating | 8,762 | 7,205 | 23,774 | 17,846 |
Production, severance, and ad valorem taxes | 5,439 | 2,806 | 13,380 | 7,617 |
Processing, gathering, and overhead | 59 | 29 | 169 | 55 |
Depletion, depreciation, and amortization | 23,611 | 15,091 | 62,022 | 37,770 |
General and administrative | 6,725 | 2,134 | 13,723 | 7,212 |
Contract termination fee | 2,408 | ' | 2,408 | ' |
Derivative fair value loss (gain) | 27,037 | 14,268 | 21,331 | -9,590 |
Accretion of discount on asset retirement obligations | 174 | 123 | 485 | 343 |
Total expenses | 74,215 | 41,656 | 137,292 | 61,253 |
Operating income | 14,210 | 430 | 71,044 | 49,856 |
Other income (expenses): | ' | ' | ' | ' |
Interest | -10,039 | -2,602 | -26,595 | -5,804 |
Other | 30 | ' | 30 | 2 |
Total other expenses | -10,009 | -2,602 | -26,565 | -5,802 |
Income (loss) before income taxes | 4,201 | -2,172 | 44,479 | 44,054 |
Income tax provision (benefit) | 1,934 | -76 | 6,805 | 1,546 |
Consolidated net income (loss) | 2,267 | -2,096 | 37,674 | 42,508 |
Less: net income (loss) attributable to noncontrolling interest | -215 | ' | 616 | ' |
Net income (loss) attributable to stockholders | $2,482 | ($2,096) | $37,058 | $42,508 |
Net income (loss) per common share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.03 | ($0.03) | $0.53 | $0.64 |
Diluted (in dollars per share) | $0.03 | ($0.03) | $0.53 | $0.62 |
Weighted average common shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 76,637 | 66,340 | 69,810 | 66,340 |
Diluted (in shares) | 78,493 | 66,340 | 71,666 | 68,196 |
CONSOLIDATED_STATEMENT_OF_CHAN
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $) | Total | Total Stockholders' Equity | Partners' Equity | Common Stock | Additional Paid-in Capital | Retained Earnings | Noncontrolling Interest |
Balance at Dec. 31, 2012 | $420,877,000 | ' | $420,877,000 | ' | ' | ' | ' |
Balance at Dec. 31, 2012 | 420,877,000 | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Equity | ' | ' | ' | ' | ' | ' | ' |
Capital contributions | 1,500,000 | ' | 1,500,000 | ' | ' | ' | ' |
Equity-based compensation prior to corporate reorganization | 89,000 | ' | 89,000 | ' | ' | ' | ' |
Net income prior to corporate reorganization | 26,780,000 | ' | 26,780,000 | ' | ' | ' | ' |
Distributions to Athlon Holdings LP's Class A limited partners | -75,000,000 | ' | -75,000,000 | ' | ' | ' | ' |
Common stock issued in corporate reorganization | ' | 364,817,000 | -374,246,000 | 663,000 | 364,154,000 | ' | 9,429,000 |
Common stock issued in corporate reorganization (in shares) | ' | ' | ' | 66,340,000 | ' | ' | ' |
Tax impact of corporate reorganization | -73,204,000 | -73,204,000 | ' | ' | -73,204,000 | ' | ' |
Equity-based compensation subsequent to corporate reorganization | 2,160,000 | 2,160,000 | ' | ' | 2,160,000 | ' | ' |
Shares of common stock sold in initial public offering, net of offering costs | 295,631,000 | 295,631,000 | ' | 158,000 | 295,473,000 | ' | ' |
Shares of common stock sold in initial public offering, net of offering costs (in shares) | ' | ' | ' | 15,789,000 | ' | ' | ' |
Consolidated net income subsequent to corporate reorganization | 10,894,000 | 10,278,000 | ' | ' | ' | 10,278,000 | 616,000 |
Balance at Sep. 30, 2013 | $609,727,000 | $599,682,000 | ' | $821,000 | $588,583,000 | $10,278,000 | $10,045,000 |
Balance (in shares) at Sep. 30, 2013 | 82,129,089 | ' | ' | 82,129,000 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Consolidated net income | $37,674 | $42,508 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ' | ' |
Depletion, depreciation, and amortization | 62,022 | 37,770 |
Deferred taxes | 6,805 | 1,546 |
Non-cash derivative loss (gain) | 13,955 | -11,760 |
Equity-based compensation | 1,799 | 118 |
Other | 4,756 | 952 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ' | ' |
Accounts receivable | -21,350 | -7,390 |
Other current assets | -155 | -975 |
Accounts payable | -702 | -461 |
Accrued interest | 15,968 | 478 |
Revenue payable | 9,718 | 3,317 |
Other current liabilities | 6,285 | -3,349 |
Net cash provided by operating activities | 136,775 | 62,754 |
Cash flows from investing activities: | ' | ' |
Acquisitions of oil and natural gas properties | -36,533 | -3,290 |
Development of oil and natural gas properties | -257,984 | -183,327 |
Other | -486 | -283 |
Net cash used in investing activities | -295,003 | -186,900 |
Cash flows from financing activities: | ' | ' |
Proceeds from long-term debt, net of issuance costs | 629,627 | 425,684 |
Payments on long-term debt | -505,926 | -325,000 |
Distributions to Athlon Holdings LP's Class A limited partners | -75,000 | ' |
Shares of common stock sold in initial public offering, net of offering costs | 296,044 | ' |
Other | 1,500 | 166 |
Net cash provided by financing activities | 346,245 | 100,850 |
Increase (decrease) in cash and cash equivalents | 188,017 | -23,296 |
Cash and cash equivalents, beginning of period | 8,871 | 32,030 |
Cash and cash equivalents, end of period | $196,888 | $8,734 |
Formation_of_the_Company_and_D
Formation of the Company and Description of Business | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Formation of the Company and Description of Business | ' | ' |
Formation of the Company and Description of Business | ' | ' |
Note 1. Formation of the Company and Description of Business | ||
Note 1. Formation of the Company and Description of Business | ||
Athlon Energy Inc. (together with its subsidiaries, “Athlon”), a Delaware corporation, was formed on April 1, 2013 and is an independent exploration and production company focused on the acquisition, development, and exploitation of unconventional oil and liquids-rich natural gas reserves in the Permian Basin. | ||
Athlon Energy Inc. (together with its subsidiaries, "Athlon"), a Delaware corporation, was formed on April 1, 2013 and is an independent exploration and production company focused on the acquisition, development, and exploitation of unconventional oil and liquids-rich natural gas reserves in the Permian Basin. | ||
On April 26, 2013, Athlon Holdings LP (together with its subsidiaries, “Holdings”), a Delaware limited partnership, underwent a corporate reorganization and as a result, Holdings became a majority-owned subsidiary of Athlon. Holdings is considered Athlon’s accounting predecessor. Athlon operates and controls all of the business and affairs of Holdings and consolidates its financial results. Holdings is not subject to federal income taxes. On the date of the corporate reorganization, a corresponding “first day” net deferred tax liability of approximately $73.2 million was recorded for differences between the tax and book basis of Athlon’s assets and liabilities. The offset of the deferred tax liability was recorded to additional paid-in capital. | ||
On April 26, 2013, Athlon Holdings LP (together with its subsidiaries, "Holdings"), a Delaware limited partnership, underwent a corporate reorganization and as a result, Holdings became a majority-owned subsidiary of Athlon. Holdings is considered Athlon's accounting predecessor. Athlon operates and controls all of the business and affairs of Holdings and consolidates its financial results. These Consolidated Financial Statements represent the financial position, results of operations, and cash flows of Holdings. | ||
Prior to the corporate reorganization, Holdings was a party to a limited partnership agreement with its management group and Apollo Athlon Holdings, LP (“Apollo”), which is an affiliate of Apollo Global Management, LLC. Prior to the corporate reorganization, Apollo Investment Fund VII, L.P. and its parallel funds (the “Apollo Funds”), members of Holdings’ management team, and certain employees owned all of the Class A limited partner interests in Holdings and members of Holdings’ management team and certain employees owned all of the Class B limited partner interests in Holdings. | ||
Prior to the corporate reorganization, Holdings was a party to a limited partnership agreement with its management group and Apollo Athlon Holdings, LP ("Apollo"), which is an affiliate of Apollo Global Management, LLC. Prior to the corporate reorganization, Apollo Investment Fund VII, L.P. and its parallel funds (the "Apollo Funds"), members of Holdings' management team, and certain employees owned all of the Class A limited partner interests in Holdings and members of Holdings' management team and certain employees owned all of the Class B limited partner interests in Holdings. | ||
In the corporate reorganization, the Apollo Funds entered into a number of distribution and contribution transactions pursuant to which the Apollo Funds exchanged their Class A limited partner interests in Holdings for common stock of Athlon. The remaining holders of Class A limited partner interests in Holdings have not exchanged their interests in the reorganization transactions. In addition, the holders of the Class B limited partner interests in Holdings exchanged their interests for common stock of Athlon subject to the same conditions and vesting terms. | ||
In the corporate reorganization, the Apollo Funds entered into a number of distribution and contribution transactions pursuant to which the Apollo Funds exchanged their Class A limited partner interests in Holdings for common stock of Athlon. The remaining holders of Class A limited partner interests in Holdings did not exchange their interests in the reorganization transactions. In addition, the holders of the Class B limited partner interests in Holdings exchanged their interests for common stock of Athlon subject to the same conditions and vesting terms. | ||
Initial Public Offering | ||
Holdings was formed on July 22, 2011, and is the holding company for Athlon Energy LP (together with its operating subsidiary, Athlon Energy Operating LLC, "Athlon SG"), a Delaware limited partnership, which was formed on August 5, 2010, and Athlon FE Energy LP (together with its operating subsidiary, Athlon FE Operating LLC, "Athlon FE"), a Delaware limited partnership, which was formed on July 22, 2011. Athlon Holdings LLC serves as the general partner to Holdings with no obligations to make capital contributions and no rights to distributions. Holdings owns all of Athlon SG's and Athlon FE's general partner and limited partner units. | ||
On August 7, 2013, Athlon completed its initial public offering (“IPO”) of 15,789,474 shares of its common stock at $20.00 per share and received net proceeds of approximately $295.6 million, after deducting underwriting discounts and commissions and offering expenses. Upon closing of the IPO, the limited partnership agreement of Holdings was amended and restated to, among other things, modify Holdings’ capital structure by replacing its different classes of interests with a single new class of units, the “New Holdings Units”. The members of Holdings’ management team and certain employees that held Class A limited partner interests now own 1,855,563 New Holdings Units and entered into an exchange agreement under which (subject to the terms of the exchange agreement) they have the right to exchange their New Holdings Units for shares of common stock of Athlon on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. All other New Holdings Units are held by Athlon. Athlon used the net proceeds from the IPO to purchase New Holdings Units from Holdings. Holdings used the proceeds it received as a result of Athlon’s purchase of New Holdings Units (i) to reduce outstanding borrowings under its credit agreement, (ii) to provide additional liquidity for use in its drilling program, and (iii) for general corporate purposes, including potential acquisitions. | ||
On August 23, 2010, Athlon SG entered into a limited partnership agreement with its management group and Apollo. Apollo has a controlling influence over Holdings. On July 22, 2011, the partnership agreement was amended and restated resulting in the formation of Holdings and Athlon FE. Upon formation, Holdings became the holding company of Athlon SG and Athlon FE. The amended and restated partnership agreement required all of Athlon SG's equity contributions to be contributed to Holdings. The holders of all Class A and Class B limited partner units in Athlon SG contributed these units to Holdings in exchange for equivalent units of Holdings. As the amendment of the partnership agreement constituted a reorganization of entities under common control, the operations of Athlon SG are presented as if Holdings existed and owned Athlon SG prior to July 22, 2011 and the assets and liabilities of Athlon SG are reflected at their carrying amounts. Please read "Note 7. Equity" and "Note 8. Employee Benefit Plans" for additional discussion. | ||
Initial Public Offering | ||
On August 7, 2013, Athlon completed its initial public offering ("IPO") of 15,789,474 shares of its common stock at $20.00 per share and received net proceeds of approximately $295.6 million, after deducting underwriting discounts and commissions and offering expenses. Upon closing of the IPO, the limited partnership agreement of Holdings was amended and restated to, among other things, modify Holdings' capital structure by replacing its different classes of interests with a single new class of units, the "New Holdings Units". The members of Holdings' management team and certain employees that held Class A limited partner interests now own 1,855,563 New Holdings Units and entered into an exchange agreement under which (subject to the terms of the exchange agreement) they have the right to exchange their New Holdings Units for shares of common stock of Athlon on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. All other New Holdings Units are held by Athlon. | ||
Basis_of_Presentation
Basis of Presentation | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Basis of Presentation | ' | ' | ||||||||||||||||||||
Basis of Presentation | ' | ' | ||||||||||||||||||||
Note 2. Basis of Presentation | ||||||||||||||||||||||
Note 2. Summary of Significant Accounting Policies | ||||||||||||||||||||||
Athlon’s consolidated financial statements include the accounts of its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | ||||||||||||||||||||||
Principles of Consolidation | ||||||||||||||||||||||
In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly, in all material respects, Athlon’s financial position as of September 30, 2013, results of operations for the three and nine months ended September 30, 2013 and 2012, and cash flows for the nine months ended September 30, 2013 and 2012. All adjustments are of a normal recurring nature. These interim results are not necessarily indicative of results for an entire year. | ||||||||||||||||||||||
Athlon's consolidated financial statements include the accounts of its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | ||||||||||||||||||||||
Certain amounts and disclosures have been condensed and omitted from the unaudited consolidated financial statements pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Therefore, these unaudited consolidated financial statements should be read in conjunction with Holdings’ audited consolidated financial statements and related notes thereto included in Athlon’s final prospectus dated August 1, 2013 and filed with the SEC pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended, on August 5, 2013. | ||||||||||||||||||||||
Use of Estimates | ||||||||||||||||||||||
Income Taxes | ||||||||||||||||||||||
Preparing financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities in the consolidated financial statements. Although management believes these estimates are reasonable, actual results could differ materially from those estimates. | ||||||||||||||||||||||
Athlon accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. | ||||||||||||||||||||||
Estimates made in preparing these consolidated financial statements include, among other things, estimates of the proved oil and natural gas reserve volumes used in calculating depletion, depreciation, and amortization ("DD&A") expense; operating costs accrued; volumes and prices for revenues accrued; valuation of derivative instruments; and the timing and amount of future abandonment costs used in calculating asset retirement obligations. Changes in the assumptions used could have a significant impact on results in future periods. | ||||||||||||||||||||||
Athlon periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets, including net operating losses. In making this determination, Athlon considers all available positive and negative evidence and makes certain assumptions. Athlon considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years. Athlon believes it is more likely than not that certain net operating losses can be carried forward and utilized. | ||||||||||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||||||||
In April 2013, Athlon had a corporate reorganization to effectuate its IPO. Holdings, Athlon’s accounting predecessor, is a partnership not subject to federal income tax. Pursuant to the steps of the corporate reorganization, certain Class A limited partners and the Class B limited partners of Holdings exchanged their interests for shares of Athlon’s common stock. Athlon’s operations are now subject to federal income tax. The tax implications of the corporate reorganization and the tax impact of the conversion to operating as a taxable entity have been reflected in the accompanying consolidated financial statements. | ||||||||||||||||||||||
Cash and cash equivalents include demand deposits and funds invested in highly liquid instruments with original maturities of three months or less and typically exceed federally insured limits. | ||||||||||||||||||||||
Noncontrolling Interest | ||||||||||||||||||||||
The following table sets forth supplemental disclosures of cash flow information for the periods indicated: | ||||||||||||||||||||||
As of September 30, 2013, management and employees owned approximately 2.2% of Holdings. Athlon owns 100% of Athlon Holdings GP LLC, which is Holdings’ general partner. Considering the presumption of control, Athlon has fully consolidated the financial position, results of operations, and cash flows of Holdings. | ||||||||||||||||||||||
As presented in the accompanying Consolidated Balance Sheets, “Noncontrolling interest” as of September 30, 2013 of approximately $10.0 million represents management and employees’ 1,855,563 New Holdings Units that are exchangeable for shares of Athlon’s common stock on a one-for-one basis. As presented in the accompanying Consolidated Statements of Operations, “Net income (loss) attributable to noncontrolling interest” for the three and nine months ended September 30, 2013 of approximately $(0.2) million and $0.6 million, respectively, represents the net income of Holdings attributable to management and employees since April 26, 2013. | Year ended | |||||||||||||||||||||
December 31, | ||||||||||||||||||||||
The following table summarizes the effects of changes in Athlon’s partnership interest in Holdings on Athlon’s equity for the periods indicated: | 2012 | 2011 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Three | Nine months | Cash paid during the period for: | ||||||||||||||||||||
months | ended | Interest | $ | 8,326 | $ | 2,395 | ||||||||||||||||
ended | September | Income taxes | — | — | ||||||||||||||||||
September | 30, 2013 | |||||||||||||||||||||
30, 2013 | Accounts Receivable | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Net income attributable to stockholders | $ | 2,482 | $ | 37,058 | Accounts receivable, which are primarily from the sale of oil, natural gas, and natural gas liquids ("NGLs"), is accrued based on estimates of the sales and prices Athlon believes it will receive. Athlon routinely reviews outstanding balances, assesses the financial strength of its customers, and records a reserve for amounts not expected to be fully recovered. Actual balances are not applied against the reserve until substantially all collection efforts have been exhausted. At December 31, 2012 and 2011, Athlon had no allowance for doubtful accounts. | |||||||||||||||||
Transfer from noncontrolling interest: | ||||||||||||||||||||||
Increase in Athlon’s paid-in capital for corporate reorganization | — | 290,950 | Inventory | |||||||||||||||||||
Increase in Athlon’s paid-in capital for issuance of 15,789,474 shares of common stock in initial public offering | 295,473 | 295,473 | ||||||||||||||||||||
Net transfer from noncontrolling interest | 295,473 | 586,423 | Inventory includes materials and supplies that Athlon intends to deploy to various development activities and oil in tanks at the lease, both of which are stated at the lower of cost (determined on an average basis) or market. Oil in tanks at the lease is carried at an amount equal to its costs to produce. Inventory consisted of the following as of the dates indicated: | |||||||||||||||||||
Change from net income attributable to stockholders and transfers from (to) noncontrolling interest | $ | 297,955 | $ | 623,481 | ||||||||||||||||||
New Accounting Pronouncements | December 31, | |||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||
In December 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2011-11, “Disclosures about Offsetting Assets and Liabilities” and in January 2013 issued ASU 2013-01, “Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities”. These ASUs created new disclosure requirements regarding the nature of an entity’s rights of setoff and related arrangements associated with its derivative instruments, repurchase agreements, and securities lending transactions. Certain disclosures of the amounts of certain instruments subject to enforceable master netting arrangements are required, irrespective of whether the entity has elected to offset those instruments in the statement of financial position. These ASUs were effective retrospectively for annual reporting periods beginning on or after January 1, 2013. The adoption of these ASUs did not impact Athlon’s financial position, results of operations, or liquidity. | (in thousands) | |||||||||||||||||||||
Materials and supplies | $ | 670 | $ | 371 | ||||||||||||||||||
No other new accounting pronouncements issued or effective from January 1, 2013 through the date of this Report, had or are expected to have a material impact on Athlon’s unaudited consolidated financial statements. | Oil inventory | 352 | 380 | |||||||||||||||||||
Total inventory | $ | 1,022 | $ | 751 | ||||||||||||||||||
Oil and Natural Gas Properties | ||||||||||||||||||||||
Athlon applies the provisions of the "Extractive Activities—Oil and Gas" topic of the Financial Accounting Standards Board's (the "FASB") Accounting Standards Codification (the "ASC"). Athlon uses the full cost method of accounting for its oil and natural gas properties. Under this method, costs directly associated with the acquisition, exploration, and development of reserves are capitalized into a full cost pool. Capitalized costs are amortized using a unit-of-production method. Under this method, the provision for DD&A is computed at the end of each period by multiplying total production for the period by a depletion rate. The depletion rate is determined by dividing the total unamortized cost base plus future development costs by net equivalent proved reserves at the beginning of the period. | ||||||||||||||||||||||
Costs associated with unproved properties are excluded from the amortizable cost base until a determination has been made as to the existence of proved reserves. Unproved properties are reviewed at the end of each quarter to determine whether the costs incurred should be reclassified to the full cost pool and, thereby, subjected to amortization. The costs associated with unproved properties primarily consist of acquisition and leasehold costs as well as development costs for wells in progress for which a determination of the existence of proved reserves has not been made. These costs are transferred to the amortization base once a determination is made whether or not proved reserves can be assigned to the property, upon impairment of a lease, or immediately upon determination that the well is unsuccessful. Costs of seismic data that cannot be directly associated to specific unproved properties are included in the full cost pool as incurred, otherwise, they are allocated to various unproved leaseholds and transferred to the amortization base with the associated leasehold costs on a specific project basis. | ||||||||||||||||||||||
Unevaluated properties are assessed periodically, at least annually, for possible impairment. Properties are assessed on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of various factors, including, but not limited to: intent to drill, remaining lease term, geological and geophysical evaluations, drilling results, and economic viability of development if proved reserves are assigned. During any period in which these factors indicate impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and become subject to amortization. | ||||||||||||||||||||||
Under the full cost method of accounting, total capitalized costs of oil and natural gas properties, net of accumulated depletion, less related deferred income taxes may not exceed an amount equal to the present value of future net revenues from proved reserves, discounted at 10% per annum, plus the lower of cost or fair value of unevaluated properties, plus estimated salvage value, less the related tax effects (the "ceiling limitation"). A ceiling limitation is calculated at the end of each quarter. If total capitalized costs, net of accumulated DD&A, less related deferred income taxes are greater than the ceiling limitation, a write-down or impairment of the full cost pool is required. A write-down of the carrying value of the full cost pool is a non-cash charge that reduces earnings and impacts partners' equity in the period of occurrence and typically results in lower DD&A expense in future periods. Once incurred, a write-down cannot be reversed at a later date. | ||||||||||||||||||||||
The ceiling limitation calculation is prepared using the 12-month first-day-of-the-month oil and natural gas average prices, as adjusted for basis or location differentials, held constant over the life of the reserves ("net wellhead prices"). If applicable, these net wellhead prices would be further adjusted to include the effects of any fixed price arrangements for the sale of oil and natural gas. Athlon uses commodity derivative contracts to mitigate the risk against the volatility of oil and natural gas prices. Commodity derivative contracts that qualify and are designated as cash flow hedges are included in estimated future cash flows. Athlon has not designated any of its commodity derivative contracts as cash flow hedges and has therefore not included its commodity derivative contracts in estimating future cash flows. The future cash outflows associated with future development or abandonment of wells are included in the computation of the discounted present value of future net revenues for purposes of the ceiling limitation calculation. | ||||||||||||||||||||||
Sales and abandonments of oil and natural gas properties being amortized are accounted for as adjustments to the full cost pool, with no gain or loss recognized, unless the adjustments would significantly alter the relationship between capitalized costs and proved reserves. A significant alteration would not ordinarily be expected to occur upon the sale of reserves involving less than 25% of the reserve quantities of a cost center. | ||||||||||||||||||||||
Natural gas volumes are converted to barrels of oil equivalent ("BOE") at the rate of six thousand cubic feet ("Mcf") of natural gas to one barrel ("Bbl") of oil. This convention is not an equivalent price basis and there may be a large difference in value between an equivalent volume of oil versus an equivalent volume of natural gas. | ||||||||||||||||||||||
Independent petroleum engineers estimate Athlon's proved reserves annually on December 31. This results in a new DD&A rate which Athlon uses for the preceding fourth quarter after adjusting for fourth quarter production. Athlon internally estimates reserve additions and reclassifications of reserves from unproved to proved at the end of the first, second, and third quarters for use in determining a DD&A rate for the respective quarter. | ||||||||||||||||||||||
Athlon capitalizes interest on expenditures made in connection with exploration and development projects that are not subject to current amortization. Interest is capitalized only for the period that activities are in progress to bring these projects to their intended use. Capitalized interest cannot exceed gross interest expense. During 2012, Athlon capitalized approximately $0.2 million of interest expense. During 2011, Athlon did not capitalize any interest expense. | ||||||||||||||||||||||
Amounts shown in the accompanying Consolidated Balance Sheets as "Proved properties, including wells and related equipment" consisted of the following as of the date indicated: | ||||||||||||||||||||||
December 31, | ||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Proved leasehold costs | $ | 376,271 | $ | 283,302 | ||||||||||||||||||
Wells and related equipment—completed | 379,036 | 89,140 | ||||||||||||||||||||
Wells and related equipment—in process | 33,264 | 26,763 | ||||||||||||||||||||
Total proved properties | $ | 788,571 | $ | 399,205 | ||||||||||||||||||
Asset Retirement Obligations | ||||||||||||||||||||||
Athlon applies the provisions of the "Asset Retirement and Environmental Obligations" topic of the ASC. Athlon has obligations as a result of lease agreements and enacted laws to remove its equipment and restore land at the end of production operations. These asset retirement obligations are primarily associated with plugging and abandoning wells and land remediation. At the time a well is drilled or acquired, Athlon records a separate liability for the estimated fair value of its asset retirement obligations, with an offsetting increase to the related oil and natural gas asset representing asset retirement costs in the accompanying Consolidated Balance Sheets. The cost of the related oil and natural gas asset, including the asset retirement cost, is included in Athlon's full cost pool. The estimated fair value of an asset retirement obligation is the present value of the expected future cash outflows required to satisfy the asset retirement obligations discounted at Athlon's credit-adjusted, risk-free interest rate at the time the liability is incurred. Accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. | ||||||||||||||||||||||
Inherent to the present-value calculation are numerous estimates, assumptions, and judgments, including, but not limited to: the ultimate settlement amounts, inflation factors, credit-adjusted risk-free rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions affect the present value of the abandonment liability, Athlon makes corresponding adjustments to both the asset retirement obligation and the related oil and natural gas property asset balance. These revisions result in prospective changes to DD&A expense and accretion of the discounted abandonment liability. Please read "Note 5. Asset Retirement Obligations" for additional information. | ||||||||||||||||||||||
Segment Reporting | ||||||||||||||||||||||
Athlon operates in only one industry: the oil and natural gas exploration and production industry in the United States. All revenues are derived from customers located in the United States. | ||||||||||||||||||||||
Major Customers/Concentration of Credit Risk | ||||||||||||||||||||||
The following purchasers accounted for 10% or greater of the sales of production for the periods indicated and the corresponding outstanding accounts receivable balance as of the dates indicated: | ||||||||||||||||||||||
Percentage of | Outstanding | |||||||||||||||||||||
Total Revenues | Accounts | |||||||||||||||||||||
for the Year | Receivable Balance | |||||||||||||||||||||
Ended | as of December 31, | |||||||||||||||||||||
December 31, | ||||||||||||||||||||||
Purchaser | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Occidental Petroleum Corporation | 29 | % | 58 | % | $ | 4,456 | $ | 5,863 | ||||||||||||||
DCP Midstream | 12 | % | 13 | % | 2,604 | 2,716 | ||||||||||||||||
Pecos Gathering & Marketing | 43 | % | 13 | % | 9,348 | 3,756 | ||||||||||||||||
Income Taxes | ||||||||||||||||||||||
Prior to its corporate reorganization, Athlon was treated as a partnership for federal and state income tax purposes with each partner being separately taxed on their share of Athlon's taxable income. Therefore, no provision for current or deferred federal income taxes has been provided for in the accompanying Consolidated Financial Statements. However, Athlon's operations located in Texas are subject to an entity-level tax, the Texas margin tax, at a statutory rate of up to 0.7% of income that is apportioned to Texas. Deferred tax assets and liabilities are recognized for future Texas margin tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective Texas margin tax bases. | ||||||||||||||||||||||
Net income (loss) for financial statement purposes may differ significantly from taxable income reportable to partners as a result of differences between the tax bases and financial reporting bases of assets and liabilities and the taxable income allocation requirements under the partnership agreement. In addition, individual partners have different investment bases depending upon the timing and price of acquisition of their partnership units, and each partner's tax accounting, which is partially dependent upon the partner's tax position, differs from the accounting followed in the accompanying Consolidated Financial Statements. As a result, the aggregate difference in the basis of net assets for financial and tax reporting purposes cannot be readily determined as Athlon does not have access to information about each partner's tax attributes in Holdings. | ||||||||||||||||||||||
Athlon performs a periodic evaluation of tax positions to review the appropriate recognition threshold for each tax position recognized in its consolidated financial statements. As of December 31, 2012 and 2011, all of Athlon's tax positions met the "more-likely-than-not" threshold. As a result, no additional tax expense, interest, or penalties have been accrued. | ||||||||||||||||||||||
Revenue Recognition | ||||||||||||||||||||||
Revenues from the sale of oil, natural gas and NGLs are recognized when the production is sold, net of any royalty interest. Because final settlement of Athlon's hydrocarbon sales can take up to two months, the expected sales volumes and prices for those properties are estimated and accrued using information available at the time the revenue is recorded. Natural gas revenues are recorded using the sales method of accounting whereby revenue is recognized based on actual sales of natural gas rather than Athlon's proportionate share of natural gas production. If Athlon's overproduced imbalance position (i.e., Athlon has cumulatively been over-allocated production) is greater than its share of remaining reserves, a liability would be recorded for the excess at period-end prices unless a different price is specified in the contract, in which case that price is used. At December 31, 2012 and 2011, Athlon did not have any natural gas imbalances. Revenue is not recognized for oil production in tanks, but the production is recorded as a current asset based on the cost to produce and included in "Inventory" in the accompanying Consolidated Balance Sheets. Transportation expenses are included in operating expenses and are not material. | ||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||
Athlon uses various financial instruments for non-trading purposes to manage and reduce price volatility and other market risks associated with its oil production. These arrangements are structured to reduce Athlon's exposure to commodity price decreases, but they can also limit the benefit Athlon might otherwise receive from commodity price increases. Athlon's risk management activity is generally accomplished through over-the-counter commodity derivative contracts with large financial institutions, most of which are lenders underwriting Athlon's revolving credit agreement. | ||||||||||||||||||||||
Athlon applies the provisions of the "Derivatives and Hedging" topic of the ASC, which requires each derivative instrument to be recorded in the accompanying Consolidated Balance Sheets at fair value. If a derivative has not been designated as a hedge or does not otherwise qualify for hedge accounting, it must be adjusted to fair value through earnings. Athlon elected not to designate its current portfolio of commodity derivative contracts as hedges. Therefore, changes in fair value of these derivative instruments are recognized in earnings and included in "Derivative fair value loss (gain)" in the accompanying Consolidated Statements of Operations. | ||||||||||||||||||||||
Athlon enters into commodity derivative contracts for the purpose of economically hedging the price of its anticipated oil production even though Athlon does not designate the derivatives as hedges for accounting purposes. Athlon classifies cash flows related to derivative contracts based on the nature and purpose of the derivative. As the derivative cash flows are considered an integral part of Athlon's oil and natural gas operations, they are classified as cash flows from operating activities in the accompanying Consolidated Statements of Cash Flows. During 2011 and 2012, Athlon entered into commodity derivative contracts all of which were for the purpose of economically hedging its anticipated oil production. | ||||||||||||||||||||||
Cash flows relating to commodity derivative contracts that were entered into prior to Athlon commencing oil and natural gas operations in January 2011 are classified as investing activities in the accompanying Consolidated Statements of Cash Flows. | ||||||||||||||||||||||
New Accounting Pronouncements | ||||||||||||||||||||||
In May 2011, the FASB issued Accounting Standards Update ("ASU") 2011-04, "Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs". ASU 2011-04 amended ASC 820 to converge the fair value measurement guidance in GAAP and International Financial Reporting Standards. Certain of the amendments clarified the application of existing fair value measurement requirements, while other amendments changed a particular principle in ASC 820. In addition, ASU 2011-04 required additional fair value disclosures. The amendments were effective for annual periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on Athlon's financial position, results of operations, or liquidity. | ||||||||||||||||||||||
In December 2011, the FASB issued ASU 2011-11, "Disclosures about Offsetting Assets and Liabilities" and in January 2013 issued ASU 2013-01, "Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities". These ASUs create new disclosure requirements regarding the nature of an entity's rights of setoff and related arrangements associated with its derivative instruments, repurchase agreements, and securities lending transactions. Certain disclosures of the amounts of certain instruments subject to enforceable master netting arrangements would be required, irrespective of whether the entity has elected to offset those instruments in the statement of financial position. These ASUs are effective retrospectively for annual reporting periods beginning on or after January 1, 2013. The adoption of these ASUs will not impact Athlon's financial position, results of operations, or liquidity. | ||||||||||||||||||||||
No other new accounting pronouncements issued or effective during 2012, or in 2013 through the date of this report, had or are expected to have a material impact on Athlon's consolidated financial statements. | ||||||||||||||||||||||
Proved_Properties
Proved Properties | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Proved Properties | ' | |||||||
Proved Properties | ' | |||||||
Note 3. Proved Properties | ||||||||
Amounts shown in the accompanying Consolidated Balance Sheets as “Proved properties, including wells and related equipment” consisted of the following as of the dates indicated: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Proved leasehold costs | $ | 411,657 | $ | 376,271 | ||||
Wells and related equipment - Completed | 634,980 | 379,036 | ||||||
Wells and related equipment - In process | 38,244 | 33,264 | ||||||
Total proved properties | $ | 1,084,881 | $ | 788,571 |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Note 4. Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||
Note 9. Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||
The book values of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. Commodity derivative contracts are marked-to-market each quarter and are thus stated at fair value in the accompanying Consolidated Balance Sheets. As of September 30, 2013, the fair value of the senior notes was approximately $515.6 million using open market quotes (“Level 1” input). | |||||||||||||||||||||||||||||||||||||||||||
The book values of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. The book values of the Athlon Credit Agreement and the Second Lien approximate fair value as the interest rates are variable. Commodity derivative contracts are marked-to-market each quarter and are thus stated at fair value in the accompanying Consolidated Balance Sheets. | |||||||||||||||||||||||||||||||||||||||||||
Derivative Policy | |||||||||||||||||||||||||||||||||||||||||||
Commodity Derivative Contracts | |||||||||||||||||||||||||||||||||||||||||||
Athlon uses various financial instruments for non-trading purposes to manage and reduce price volatility and other market risks associated with its oil production. These arrangements are structured to reduce Athlon’s exposure to commodity price decreases, but they can also limit the benefit Athlon might otherwise receive from commodity price increases. Athlon’s risk management activity is generally accomplished through over-the-counter commodity derivative contracts with large financial institutions, most of which are lenders underwriting Holdings’ credit agreement. | |||||||||||||||||||||||||||||||||||||||||||
Commodity prices are often subject to significant volatility due to many factors that are beyond Athlon's control, including but not limited to: prevailing economic conditions, supply and demand of hydrocarbons in the marketplace, actions by speculators, and geopolitical events such as wars or natural disasters. Athlon's objective is to manage its exposure to oil price risk with swaps, puts, and collars. Swaps provide a fixed price for a notional amount of sales volumes. Puts provide a fixed floor price on a notional amount of sales volumes while allowing full price participation if the relevant index price closes above the floor price. Collars provide a floor price on a notional amount of sales volumes while allowing some additional price participation if the relevant index price closes above the floor price. This participation is limited by a ceiling price specified in the contract. | |||||||||||||||||||||||||||||||||||||||||||
Athlon applies the provisions of the “Derivatives and Hedging” topic of the Accounting Standards Codification, which requires each derivative instrument to be recorded in the accompanying Consolidated Balance Sheets at fair value. If a derivative has not been designated as a hedge or does not otherwise qualify for hedge accounting, it must be adjusted to fair value through earnings. Athlon elected not to designate its current portfolio of commodity derivative contracts as hedges for accounting purposes. Therefore, changes in fair value of these derivative instruments are recognized in earnings and included in “Derivative fair value loss (gain)” in the accompanying Consolidated Statements of Operations. | |||||||||||||||||||||||||||||||||||||||||||
The following table summarizes open commodity derivative contracts as of December 31, 2012: | |||||||||||||||||||||||||||||||||||||||||||
Athlon enters into commodity derivative contracts for the purpose of economically fixing the price of its anticipated oil production even though Athlon does not designate the derivatives as hedges for accounting purposes. Athlon classifies cash flows related to derivative contracts based on the nature and purpose of the derivative. As the derivative cash flows are considered an integral part of Athlon’s oil and natural gas operations, they are classified as cash flows from operating activities in the accompanying Consolidated Statements of Cash Flows. | |||||||||||||||||||||||||||||||||||||||||||
Commodity Derivative Contracts | Period | Average | Weighted- | Average | Weighted- | Average | Weighted- | Asset | |||||||||||||||||||||||||||||||||||
Daily | Average | Daily | Average | Daily | Average | Fair Market | |||||||||||||||||||||||||||||||||||||
Commodity prices are often subject to significant volatility due to many factors that are beyond Athlon’s control, including but not limited to: prevailing economic conditions, supply and demand of hydrocarbons in the marketplace, actions by speculators, and geopolitical events such as wars or natural disasters. Athlon manages oil price risk with swaps and collars. Swaps provide a fixed price for a notional amount of sales volumes. Collars provide a floor price on a notional amount of sales volumes while allowing some additional price participation if the relevant index price closes above the floor price. This participation is limited by a ceiling price specified in the contract. | Floor | Floor | Cap | Cap | Swap | Swap | Value | ||||||||||||||||||||||||||||||||||||
Volume | Price | Volume | Price | Volume | Price | ||||||||||||||||||||||||||||||||||||||
The following table summarizes Athlon’s open commodity derivative contracts as of September 30, 2013: | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (in thousands) | ||||||||||||||||||||||||||||||||||||
2013 | 150 | $ | 75 | 150 | $ | 105.95 | 5,000 | $ | 94.15 | $ | 1,654 | ||||||||||||||||||||||||||||||||
Average | Weighted - | Average | Weighted - | Average | Weighted - | Asset | 2014 | — | — | — | — | 4,950 | 92.65 | 956 | |||||||||||||||||||||||||||||
Daily | Average | Daily | Average | Daily | Average | (Liability) | 2015 | — | — | — | — | 800 | 94.86 | 1,379 | |||||||||||||||||||||||||||||
Floor | Floor | Cap | Cap | Swap | Swap | Fair Market | |||||||||||||||||||||||||||||||||||||
Period | Volume | Price | Volume | Price | Volume | Price | Value | $ | 3,989 | ||||||||||||||||||||||||||||||||||
(Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (in thousands) | |||||||||||||||||||||||||||||||||||||
Oct. - Dec. 2013 | 150 | $ | 75 | 150 | $ | 105.95 | 7,000 | $ | 95.01 | $ | (4,205 | ) | |||||||||||||||||||||||||||||||
2014 | — | — | — | — | 7,950 | 92.67 | (7,532 | ) | In January 2011, Athlon terminated certain oil puts that were in place at December 31, 2010 and received net proceeds of approximately $7.6 million, which is reflected as "Monetization of put options" in the "Investing activities" section of the accompanying Consolidated Statements of Cash Flows. In July and August 2011, Athlon entered into additional oil puts that included deferred premiums. These deferred premiums increased Athlon's interest expense by approximately $0.2 million during 2011. In October 2011, Athlon terminated the oil puts and entered into oil swaps that required the initial payment of premiums of approximately $2.0 million. | ||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | 1,300 | 93.18 | 2,101 | ||||||||||||||||||||||||||||||||||||
$ | (9,636 | ) | Counterparty Risk. At December 31, 2012, Athlon had committed 10% or greater (in terms of fair market value) of its oil derivative contracts in asset positions from the following counterparties: | ||||||||||||||||||||||||||||||||||||||||
Athlon is also a party to Midland-Cushing basis differential swaps for 5,000 Bbls/D at $1.20/Bbl for the fourth quarter of 2013. At September 30, 2013, the fair value of these contracts was a liability of approximately $0.3 million. | Counterparty | Fair Market Value of | |||||||||||||||||||||||||||||||||||||||||
Oil Derivative | |||||||||||||||||||||||||||||||||||||||||||
Counterparty Risk. At September 30, 2013, Athlon had committed 10% or greater (in terms of fair market value) of its oil derivative contracts in asset positions from the following counterparties, or their affiliates: | Contracts | ||||||||||||||||||||||||||||||||||||||||||
Committed | |||||||||||||||||||||||||||||||||||||||||||
Fair Market Value of | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||
Oil Derivative | BNP Paribas | $ | 3,660 | ||||||||||||||||||||||||||||||||||||||||
Contracts | Royal Bank of Canada | 711 | |||||||||||||||||||||||||||||||||||||||||
Counterparty | Committed | Scotiabank | 617 | ||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
BNP Paribas | $ | 458 | Athlon does not require collateral from its counterparties for entering into financial instruments, so in order to mitigate the credit risk associated with financial instruments, Athlon enters into master netting agreements with certain counterparties. The master netting agreement is a standardized, bilateral contract between a given counterparty and Athlon. Instead of treating each financial transaction between the counterparty and Athlon separately, the master netting agreement enables the counterparty and Athlon to aggregate all financial trades and treat them as a single agreement. This arrangement is intended to benefit Athlon in two ways: (1) default by a counterparty under one financial trade can trigger rights to terminate all financial trades with such counterparty; and (2) netting of settlement amounts reduces Athlon's credit exposure to a given counterparty in the event of close-out. Athlon's accounting policy is to not offset fair value amounts between different counterparties for derivative instruments in the accompanying Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||||||||||||
Tabular Disclosures of Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||
Athlon does not require collateral from its counterparties for entering into financial instruments, so in order to mitigate the credit risk associated with financial instruments, Athlon enters into master netting agreements with its counterparties. The master netting agreement is a standardized, bilateral contract between a given counterparty and Athlon. Instead of treating each financial transaction between the counterparty and Athlon separately, the master netting agreement enables the counterparty and Athlon to aggregate all financial trades and treat them as a single agreement. This arrangement is intended to benefit Athlon in two ways: (i) default by a counterparty under a single financial trade can trigger rights to terminate all financial trades with such counterparty; and (ii) netting of settlement amounts reduces Athlon’s credit exposure to a given counterparty in the event of close-out. Athlon’s accounting policy is to not offset fair value amounts between different counterparties for derivative instruments in the accompanying Consolidated Balance Sheets. | |||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the fair value of Athlon's derivative instruments as of the dates indicated (in thousands): | |||||||||||||||||||||||||||||||||||||||||||
Tabular Disclosures of Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the fair value of Athlon’s derivative instruments not designated as hedging instruments as of the dates indicated: | Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
Oil | Commodity | Total | Balance Sheet | December 31, | December 31, | Balance Sheet | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
Balance Sheet | Commodity | Derivatives | Commodity | Location | 2012 | 2011 | Location | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Location | Derivatives | Netting (a) | Derivatives | Derivatives not designated as hedges | |||||||||||||||||||||||||||||||||||||||
(in thousands) | Commodity derivative contracts | Derivatives—current | $ | 2,246 | $ | — | Derivatives—current | $ | 592 | $ | 5,908 | ||||||||||||||||||||||||||||||||
As of September 30, 2013 | Commodity derivative contracts | Derivatives—noncurrent | 2,854 | 2,503 | Derivatives—noncurrent | 519 | 2,554 | ||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||
Derivatives - current | $ | 162 | $ | (162 | ) | $ | — | Total derivatives not designated as hedges | $ | 5,100 | $ | 2,503 | $ | 1,111 | $ | 8,462 | |||||||||||||||||||||||||||
Derivatives - noncurrent | 2,149 | (938 | ) | 1,211 | |||||||||||||||||||||||||||||||||||||||
Total assets | 2,311 | (1,100 | ) | 1,211 | |||||||||||||||||||||||||||||||||||||||
Liabilities | The following table summarizes the effect of derivative instruments not designated as hedges on the accompanying Consolidated Statements of Operations for the periods indicated (in thousands): | ||||||||||||||||||||||||||||||||||||||||||
Derivatives - current | (10,347 | ) | 162 | (10,185 | ) | ||||||||||||||||||||||||||||||||||||||
Derivatives - noncurrent | (1,930 | ) | 938 | (992 | ) | ||||||||||||||||||||||||||||||||||||||
Total liabilities | (12,277 | ) | 1,100 | (11,177 | ) | Amount of Loss | |||||||||||||||||||||||||||||||||||||
Net liabilities | $ | (9,966 | ) | $ | — | $ | (9,966 | ) | (Gain) Recognized | ||||||||||||||||||||||||||||||||||
in Income | |||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2012 | Year ended | ||||||||||||||||||||||||||||||||||||||||||
Assets | Location of Loss (Gain) | December 31, | |||||||||||||||||||||||||||||||||||||||||
Derivatives - current | $ | 3,386 | $ | (1,140 | ) | $ | 2,246 | Derivatives Not Designated as Hedges | Recognized in Income | 2012 | 2011 | ||||||||||||||||||||||||||||||||
Derivatives - noncurrent | 3,265 | (411 | ) | 2,854 | Commodity derivative contracts | Derivative fair value loss (gain) | $ | (9,293 | ) | $ | 7,959 | ||||||||||||||||||||||||||||||||
Total assets | 6,651 | (1,551 | ) | 5,100 | |||||||||||||||||||||||||||||||||||||||
Liabilities | Fair Value Hierarchy | ||||||||||||||||||||||||||||||||||||||||||
Derivatives - current | (1,732 | ) | 1,140 | (592 | ) | ||||||||||||||||||||||||||||||||||||||
Derivatives - noncurrent | (930 | ) | 411 | (519 | ) | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are defined as follows: | |||||||||||||||||||||||||||||||||||||
Total liabilities | (2,662 | ) | 1,551 | (1,111 | ) | ||||||||||||||||||||||||||||||||||||||
Net assets | $ | 3,989 | $ | — | $ | 3,989 | |||||||||||||||||||||||||||||||||||||
(a) Represents counterparty netting under master netting agreements, which allow for netting of commodity derivative contracts. These derivative instruments are reflected net on the accompanying Consolidated Balance Sheets. | • | ||||||||||||||||||||||||||||||||||||||||||
Level 1—Inputs such as unadjusted, quoted prices that are available in active markets for identical assets or liabilities. | |||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the effect of derivative instruments not designated as hedges on the accompanying Consolidated Statements of Operations for the periods indicated (in thousands): | |||||||||||||||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||||||||||||||
Amount of Loss (Gain) Recognized in Income | Level 2—Inputs, other than quoted prices within Level 1, that are either directly or indirectly observable. | ||||||||||||||||||||||||||||||||||||||||||
Location of Loss (Gain) | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||||||
Derivatives Not Designated as Hedges | Recognized in Income | 2013 | 2012 | 2013 | 2012 | • | |||||||||||||||||||||||||||||||||||||
Commodity derivative contracts | Derivative fair value loss (gain) | $ | 27,037 | $ | 14,268 | $ | 21,331 | $ | (9,590 | ) | Level 3—Inputs that are unobservable for use when little or no market data exists requiring the use of valuation methodologies that result in management's best estimate of fair value. | ||||||||||||||||||||||||||||||||
As required by GAAP, Athlon utilizes the most observable inputs available for the valuation technique used. The financial assets and liabilities are classified in their entirety based on the lowest level of input that is of significance to the fair value measurement. Athlon's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the financial assets and liabilities and their placement within the fair value hierarchy levels. The following methods and assumptions were used to estimate the fair values of Athlon's assets and liabilities that are accounted for at fair value on a recurring basis: | |||||||||||||||||||||||||||||||||||||||||||
Fair Value Hierarchy | |||||||||||||||||||||||||||||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting principles generally accepted in the United States (“GAAP”) establishes a three-tier fair value hierarchy, which prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are defined as follows: | |||||||||||||||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||||||||||||||
· Level 1 — Inputs such as unadjusted, quoted prices that are available in active markets for identical assets or liabilities. | Level 2—Fair values of swaps were estimated using a combined income-based and market-based valuation methodology based upon forward commodity price curves obtained from independent pricing services. Athlon's collars and puts are average value options. Settlement is determined by the average underlying price over a predetermined period of time. Athlon uses observable inputs in an option pricing valuation model to determine fair value such as: (1) current market and contractual prices for the underlying instruments; (2) quoted forward prices for oil and natural gas; (3) interest rates, such as a LIBOR curve for a term similar to the commodity derivative contract; and (4) appropriate volatilities. | ||||||||||||||||||||||||||||||||||||||||||
· Level 2 — Inputs, other than quoted prices within Level 1, that are either directly or indirectly observable, such as quoted prices for similar assets and liabilities or quoted prices in inactive markets. | |||||||||||||||||||||||||||||||||||||||||||
Athlon adjusts the valuations from the valuation model for nonperformance risk. For commodity derivative contracts which are in an asset position, Athlon uses the counterparty's credit default swap rating. For commodity derivative contracts which are in a liability position, Athlon uses the average credit default swap rating of its peer companies as Athlon does not have its own credit default swap rating. All fair values have been adjusted for nonperformance risk resulting in an increase in the net commodity derivative asset of approximately $0.1 million as of December 31, 2012 and a decrease of the net commodity derivative liability of approximately $0.5 million as of December 31, 2011. | |||||||||||||||||||||||||||||||||||||||||||
· Level 3 — Inputs that are unobservable for use when little or no market data exists requiring the use of valuation methodologies that result in management’s best estimate of fair value. | |||||||||||||||||||||||||||||||||||||||||||
The following table sets forth Athlon's assets and liabilities that were accounted for at fair value on a recurring basis as of the dates indicated: | |||||||||||||||||||||||||||||||||||||||||||
As required by GAAP, Athlon utilizes the most observable inputs available for the valuation technique used. The financial assets and liabilities are classified in their entirety based on the lowest level of input that is of significance to the fair value measurement. Athlon’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the financial assets and liabilities and their placement within the fair value hierarchy levels. The following methods and assumptions were used to estimate the fair values of Athlon’s assets and liabilities that are accounted for at fair value on a recurring basis: | |||||||||||||||||||||||||||||||||||||||||||
· Level 2 — Fair values of swaps are estimated using a combined income-based and market-based valuation methodology based upon forward commodity price curves obtained from independent pricing services. Athlon’s collars are average value options. Settlement is determined by the average underlying price over a predetermined period of time. Athlon uses observable inputs in an option pricing valuation model to determine fair value such as: (i) current market and contractual prices for the underlying instruments; (ii) quoted forward prices for oil and natural gas; (iii) interest rates, such as a LIBOR curve for a term similar to the commodity derivative contract; and (iv) appropriate volatilities. | Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||||||||||||||||||||||||
Description | Asset (liability), net | Quoted Prices in | Significant Other | Significant | |||||||||||||||||||||||||||||||||||||||
Athlon adjusts the valuations from the valuation model for nonperformance risk. For commodity derivative contracts which are in an asset position, Athlon adds the counterparty’s credit default swap spread to the risk-free rate. If a counterparty does not have a credit default swap spread, Athlon uses other companies with similar credit ratings to determine the applicable spread. For commodity derivative contracts which are in a liability position, Athlon uses the yield on its senior notes less the risk-free rate. All fair values have been adjusted for nonperformance risk resulting in a decrease in the net commodity derivative liability of approximately $136,000 as of September 30, 2013 and an increase in the net commodity derivative asset of approximately $125,000 as of December 31, 2012. | Active Markets for | Observable Inputs | Unobservable Inputs | ||||||||||||||||||||||||||||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||||||||||||
The following table sets forth Athlon’s assets and liabilities that were accounted for at fair value on a recurring basis as of the dates indicated: | (Level 1) | ||||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at Reporting Date Using | As of December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
Quoted Prices in | Oil derivative contracts—swaps | $ | 4,069 | $ | — | $ | 4,069 | $ | — | ||||||||||||||||||||||||||||||||||
Active Markets for | Significant Other | Significant | Oil derivative contracts—collars and puts | (80 | ) | — | (80 | ) | — | ||||||||||||||||||||||||||||||||||
Identical Assets | Observable Inputs | Unobservable Inputs | |||||||||||||||||||||||||||||||||||||||||
Description | Asset (liability), net | (Level 1) | (Level 2) | (Level 3) | Total | $ | 3,989 | $ | — | $ | 3,989 | $ | — | ||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
As of September 30, 2013 | As of December 31, 2011 | ||||||||||||||||||||||||||||||||||||||||||
Oil derivative contracts - swaps | $ | (9,622 | ) | $ | — | $ | (9,622 | ) | $ | — | Oil derivative contracts—swaps | $ | (5,392 | ) | $ | — | $ | (5,392 | ) | $ | — | ||||||||||||||||||||||
Oil derivative contracts - basis differential swaps | (330 | ) | — | (330 | ) | — | Oil derivative contracts—collars and puts | (567 | ) | — | — | (567 | ) | ||||||||||||||||||||||||||||||
Oil derivative contracts - collars | (14 | ) | — | (14 | ) | — | |||||||||||||||||||||||||||||||||||||
Total | $ | (9,966 | ) | $ | — | $ | (9,966 | ) | $ | — | Total | $ | (5,959 | ) | $ | — | $ | (5,392 | ) | $ | (567 | ) | |||||||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||||||||||||||||||||||||
Oil derivative contracts - swaps | $ | 4,069 | $ | — | $ | 4,069 | $ | — | Athlon's oil collars were classified as Level 3 in the fair value hierarchy as of December 31, 2011. Beginning in 2012, these contracts were classified as Level 2 in the fair value hierarchy as a result of Athlon's ability to obtain appropriate volatilities. The following table summarizes the changes in the fair value of Athlon's Level 3 assets and liabilities that were previously classified as Level 3 for the periods indicated: | ||||||||||||||||||||||||||||||||||
Oil derivative contracts - collars | (80 | ) | — | (80 | ) | — | |||||||||||||||||||||||||||||||||||||
Total | $ | 3,989 | $ | — | $ | 3,989 | $ | — | |||||||||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||
Using Significant | |||||||||||||||||||||||||||||||||||||||||||
Unobservable Inputs (Level 3) | |||||||||||||||||||||||||||||||||||||||||||
Oil Derivative | |||||||||||||||||||||||||||||||||||||||||||
Contracts— | |||||||||||||||||||||||||||||||||||||||||||
Collars and Puts | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2011 | $ | 7,475 | |||||||||||||||||||||||||||||||||||||||||
Total gains (losses): | |||||||||||||||||||||||||||||||||||||||||||
Included in earnings | (461 | ) | |||||||||||||||||||||||||||||||||||||||||
Monetization of put options | (7,625 | ) | |||||||||||||||||||||||||||||||||||||||||
Purchases (premiums paid) | 44 | ||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2011 | (567 | ) | |||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 | 567 | ||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2012 | $ | — | |||||||||||||||||||||||||||||||||||||||||
Since Athlon does not use hedge accounting for its commodity derivative contracts, all gains and losses on its Level 3 assets and liabilities are included in "Derivative fair value loss (gain)" in the accompanying Consolidated Statements of Operations. | |||||||||||||||||||||||||||||||||||||||||||
Asset_Retirement_Obligations
Asset Retirement Obligations | 9 Months Ended | 12 Months Ended | |||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||
Asset Retirement Obligations | ' | ' | |||||||||||
Asset Retirement Obligations | ' | ' | |||||||||||
Note 5. Asset Retirement Obligations | |||||||||||||
Note 5. Asset Retirement Obligations | |||||||||||||
Asset retirement obligations relate to future plugging and abandonment expenses on oil and natural gas properties and related facilities disposal. The following table summarizes the changes in Athlon’s asset retirement obligations for the nine months ended September 30, 2013 (in thousands): | |||||||||||||
Asset retirement obligations relate to future plugging and abandonment expenses on oil and natural gas properties and related facilities disposal. The following table summarizes the changes in Athlon's asset retirement obligations for the period indicated: | |||||||||||||
Balance at January 1 | $ | 5,049 | |||||||||||
Liabilities assumed in acquisitions | 335 | ||||||||||||
Liabilities incurred from new wells | 735 | Year Ended | |||||||||||
Liabilities settled | (108 | ) | December 31, | ||||||||||
Accretion of discount | 485 | 2012 | 2011 | ||||||||||
Revisions of previous estimates | 3 | (in thousands) | |||||||||||
Balance at September 30 | 6,499 | Balance at January 1 | $ | 3,704 | $ | — | |||||||
Less: current portion | 60 | Acquisition of properties | 60 | 3,282 | |||||||||
Asset retirement obligations - long-term | $ | 6,439 | Wells drilled | 815 | 166 | ||||||||
Accretion of discount | 478 | 344 | |||||||||||
Revisions of previous estimates | (8 | ) | — | ||||||||||
Plugging and abandonment costs incurred | — | (88 | ) | ||||||||||
Balance at December 31 | $ | 5,049 | $ | 3,704 | |||||||||
LongTerm_Debt
Long-Term Debt | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||||
Long-Term Debt | ' | ' | |||||||||||||||||||||||||||||
Long-Term Debt | ' | ' | |||||||||||||||||||||||||||||
Note 6. Long-Term Debt | |||||||||||||||||||||||||||||||
Note 6. Long-Term Debt | |||||||||||||||||||||||||||||||
Senior Notes | |||||||||||||||||||||||||||||||
Second Lien | |||||||||||||||||||||||||||||||
In April 2013, Holdings issued $500 million aggregate principal amount of 7 3/8% senior notes due 2021 (the “Notes”). The net proceeds from the Notes were used to repay a portion of the outstanding borrowings under Holdings’ credit agreement, to repay in full and terminate Holdings’ former second lien term loan, to make a $75 million distribution to Holdings’ Class A limited partners, and for general partnership purposes. On August 14, 2013, Holdings entered into a supplemental indenture pursuant to which Athlon became an unconditional guarantor of the Notes. | |||||||||||||||||||||||||||||||
Athlon is a party to a second lien term loan agreement dated September 5, 2012 (the "Second Lien"), which matures on November 21, 2017. The Second Lien provides for term loans to be made to Athlon in the aggregate amount of up to $125 million. At December 31, 2012, there were $125 million outstanding loans under the Second Lien. Athlon used the net proceeds from the Second Lien to reduce outstanding borrowings under its credit agreements. | |||||||||||||||||||||||||||||||
The indenture governing the Notes contains covenants, including, among other things, covenants that restrict Holdings’ ability to: | |||||||||||||||||||||||||||||||
Obligations under the Second Lien are secured by a second-priority security interest in substantially all of Athlon's proved reserves and in the equity interests of its operating subsidiaries. In addition, obligations under the Second Lien are fully and unconditionally guaranteed by Athlon's operating subsidiaries. | |||||||||||||||||||||||||||||||
· make distributions, investments, or other restricted payments if Holdings’ fixed charge coverage ratio is less than 2.0 to 1.0; | |||||||||||||||||||||||||||||||
· incur additional indebtedness if Holdings’ fixed charge coverage ratio would be less than 2.0 to 1.0; and | Loans under the Second Lien are subject to varying rates of interest based on whether the loan is a Eurodollar loan or a base rate loan. Eurodollar loans under the Second Lien bear interest at the Eurodollar rate plus the applicable margin indicated in the following table, and base rate loans under the Second Lien bear interest at the base rate plus the applicable margin indicated in the following table: | ||||||||||||||||||||||||||||||
· create liens, sell assets, consolidate or merge with any other person, or engage in transactions with affiliates. | |||||||||||||||||||||||||||||||
These covenants are subject to a number of important qualifications, limitations, and exceptions. In addition, the indenture contains other customary terms, including certain events of default upon the occurrence of which the senior notes may be declared immediately due and payable. | Period | Eurodollar Loans | Base Rate Loans | ||||||||||||||||||||||||||||
September 5, 2012 through December 31, 2013 | 6.5 | % | 5.5 | % | |||||||||||||||||||||||||||
Under the indenture, starting on April 15, 2016, Holdings will be able to redeem some or all of the Notes at a premium that will decrease over time, plus accrued and unpaid interest to the date of redemption. Prior to April 15, 2016, Holdings will be able, at its option, to redeem up to 35% of the aggregate principal amount of the Notes at a price of 107.375% of the principal thereof, plus accrued and unpaid interest to the date of redemption, with an amount equal to the net proceeds from certain equity offerings. In addition, at Holdings’ option, prior to April 15, 2016, Holdings may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes, plus an “applicable premium”, plus accrued and unpaid interest to the date of redemption. If a change of control occurs on or prior to July 15, 2014, Holdings may redeem all, but not less than all, of the notes at 110% of the principal amount thereof plus accrued and unpaid interest to, but not including, the redemption date. Certain asset dispositions will be triggering events that may require Holdings to repurchase all or any part of a noteholder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to but excluding the date of repurchase. Interest on the Notes is payable in cash semi-annually in arrears, commencing on October 15, 2013, through maturity. | January 1, 2014 through December 31, 2014 | 6.75 | % | 5.75 | % | ||||||||||||||||||||||||||
January 1, 2015 through December 31, 2015 | 7 | % | 6 | % | |||||||||||||||||||||||||||
As a result of the issuance of the Notes, Holdings’ former second lien term loan was paid off and retired and the borrowing base of the credit agreement was reduced resulting in a write off of unamortized debt issuance costs of approximately $2.8 million, which is included in “Interest expense” in the accompanying Consolidated Statements of Operations and “Other” in the operating activities section of the accompanying Consolidated Statements of Cash Flows for the nine months ended September 30, 2013. | January 1, 2016 and thereafter | 7.25 | % | 6.25 | % | ||||||||||||||||||||||||||
Credit Agreement | The "Eurodollar rate" for any interest period (either one, two, three, or six months, as selected by Athlon) is equal to the British Bankers Association London Interbank Offered Rate ("LIBOR") divided by 1.00 minus the rate prescribed by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirements in respect of Eurocurrency liabilities for a member of the Federal Reserve System in New York City. The "Base Rate" is calculated as the highest of: (1) the annual rate of interest announced by Wells Fargo Bank, N.A. as its "prime rate"; (2) the federal funds effective rate plus 0.5%; or (3) LIBOR plus 1.0%. | ||||||||||||||||||||||||||||||
Holdings is a party to an amended and restated credit agreement dated March 19, 2013 (the “Holdings Credit Agreement”), which matures on March 19, 2018. The Holdings Credit Agreement provides for revolving credit loans to be made to Holdings from time to time and letters of credit to be issued from time to time for the account of Holdings or any of its restricted subsidiaries. The aggregate amount of the commitments of the lenders under the Holdings Credit Agreement is $1.0 billion. Availability under the Holdings Credit Agreement is subject to a borrowing base, which is redetermined semi-annually and upon requested special redeterminations. | Borrowings under the Second Lien may be repaid from time to time without penalty, except during 2015 in which case there is a 1.0% pre-payment fee. | ||||||||||||||||||||||||||||||
In conjunction with the offering of the Notes in April 2013 as discussed above, the borrowing base under the Holdings Credit Agreement was reduced to $267.5 million. In May 2013, Holdings amended the Holdings Credit Agreement to, among other things, increase the borrowing base to $320 million. As of September 30, 2013, the borrowing base was $320 million and there were no outstanding borrowings and no outstanding letters of credit under the Holdings Credit Agreement. Please see "Note 12. Subsequent Events" for discussion of Athlon's borrowing base redetermination. | The Second Lien contains covenants including, among others, the following: | ||||||||||||||||||||||||||||||
Obligations under the Holdings Credit Agreement are secured by a first-priority security interest in substantially all of Holdings’ proved reserves and in the equity interests of its operating subsidiaries. In addition, obligations under the Holdings Credit Agreement are guaranteed by Athlon and Holdings’ operating subsidiaries. | |||||||||||||||||||||||||||||||
Loans under the Holdings Credit Agreement are subject to varying rates of interest based on (i) outstanding borrowings in relation to the borrowing base and (ii) whether the loan is a Eurodollar loan or a base rate loan. Eurodollar loans under the Holdings Credit Agreement bear interest at the Eurodollar rate plus the applicable margin indicated in the following table, and base rate loans under the Holdings Credit Agreement bear interest at the base rate plus the applicable margin indicated in the following table. Holdings also incurs a quarterly commitment fee on the unused portion of the Holdings Credit Agreement indicated in the following table: | • | ||||||||||||||||||||||||||||||
a prohibition against incurring debt, subject to permitted exceptions; | |||||||||||||||||||||||||||||||
Ratio of Outstanding Borrowings to Borrowing Base | Unused | Applicable | Applicable | ||||||||||||||||||||||||||||
Commitment Fee | Margin for | Margin for Base | • | ||||||||||||||||||||||||||||
Eurodollar Loans | Rate Loans | a restriction on creating liens on Athlon's assets and the assets of its operating subsidiaries, subject to permitted exceptions; | |||||||||||||||||||||||||||||
Less than or equal to .30 to 1 | 0.375 | % | 1.5 | % | 0.5 | % | |||||||||||||||||||||||||
Greater than .30 to 1 but less than or equal to .60 to 1 | 0.375 | % | 1.75 | % | 0.75 | % | • | ||||||||||||||||||||||||
Greater than .60 to 1 but less than or equal to .80 to 1 | 0.5 | % | 2 | % | 1 | % | restrictions on merging and selling assets outside the ordinary course of business; | ||||||||||||||||||||||||
Greater than .80 to 1 but less than or equal to .90 to 1 | 0.5 | % | 2.25 | % | 1.25 | % | |||||||||||||||||||||||||
Greater than .90 to 1 | 0.5 | % | 2.5 | % | 1.5 | % | • | ||||||||||||||||||||||||
restrictions on use of proceeds, investments, transactions with affiliates, or change of principal business; | |||||||||||||||||||||||||||||||
The “Eurodollar rate” for any interest period (either one, two, three, or nine months, as selected by Holdings) is the rate equal to the British Bankers Association London Interbank Offered Rate (“LIBOR”) for deposits in dollars for a similar interest period. The “Base Rate” is calculated as the highest of: (i) the annual rate of interest announced by Bank of America, N.A. as its “prime rate”; (ii) the federal funds effective rate plus 0.5%; or (iii) except during a “LIBOR Unavailability Period”, the Eurodollar rate (for dollar deposits for a one-month term) for such day plus 1.0%. | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
Any outstanding letters of credit reduce the availability under the Holdings Credit Agreement. Borrowings under the Holdings Credit Agreement may be repaid from time to time without penalty. | a provision limiting oil and natural gas swaps to a volume not exceeding the percentages indicated in the following table: | ||||||||||||||||||||||||||||||
The Holdings Credit Agreement contains covenants including, among others, the following: | |||||||||||||||||||||||||||||||
The Months Immediately Following Any Date of Determination | Projected Production from | Projected Production | |||||||||||||||||||||||||||||
· a prohibition against incurring debt, subject to permitted exceptions; | Proved Developed | from Proved Reserves | |||||||||||||||||||||||||||||
· a restriction on creating liens on Holdings’ assets and the assets of its operating subsidiaries, subject to permitted exceptions; | Producing Reserves | ||||||||||||||||||||||||||||||
· restrictions on merging and selling assets outside the ordinary course of business; | 1st through the 24th month | 90 | % | 65 | % | ||||||||||||||||||||||||||
· restrictions on use of proceeds, investments, transactions with affiliates, or change of principal business; | 25th through the 36th month | 85 | % | 50 | % | ||||||||||||||||||||||||||
· a requirement that Holdings maintain a ratio of consolidated total debt to EBITDAX (as defined in the Holdings Credit Agreement) of not more than 4.75 to 1.0 (which ratio changes to 4.5 to 1.0 beginning with the quarter ending June 30, 2014); and | 37th and each succeeding month | 85 | % | 0 | % | ||||||||||||||||||||||||||
· a provision limiting commodity derivative contracts to a volume not exceeding 85% of projected production from proved reserves for a period not exceeding 66 months from the date the commodity derivative contract is entered into. | |||||||||||||||||||||||||||||||
The Holdings Credit Agreement contains customary events of default, including our failure to comply with the financial ratios described above, which would permit the lenders to accelerate the debt if not cured within applicable grace periods. If an event of default occurs and is continuing, lenders with a majority of the aggregate commitments may require Bank of America, N.A. to declare all amounts outstanding under the Holdings Credit Agreement to be immediately due and payable. | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a requirement that Athlon maintain a ratio of consolidated current assets (which includes availability under Athlon's credit agreement) to consolidated current liabilities (which excludes current maturities of long-term debt, non-cash derivative assets and liabilities, and amounts due to Apollo under the Transaction Fee Agreement) of not less than 1.0 to 1.0; | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a requirement that Athlon maintain a ratio of consolidated funded debt to consolidated Adjusted EBITDA (as defined in the Second Lien) of not more than 4.5 to 1.0; and | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a requirement that Athlon maintain a ratio of the most recent present value of total proved reserves discounted at 10% to consolidated funded debt of not less than 1.5 to 1.0. | |||||||||||||||||||||||||||||||
As of December 31, 2012, Athlon was in compliance with all covenants of the Second Lien. | |||||||||||||||||||||||||||||||
The Second Lien contains customary events of default, which would permit the lenders to accelerate the debt if not cured within applicable grace periods. If an event of default occurs and is continuing, lenders with a majority of the aggregate commitments may require Wells Fargo Energy Capital, Inc. to declare all amounts outstanding under the Second Lien to be immediately due and payable. | |||||||||||||||||||||||||||||||
Credit Agreements | |||||||||||||||||||||||||||||||
Athlon SG Credit Agreement | |||||||||||||||||||||||||||||||
Athlon SG was a party to a credit agreement dated January 6, 2011 (as amended, the "SG Credit Agreement"), which was scheduled to mature on January 6, 2016. In May 2012, all outstanding borrowings under the SG Credit Agreement were repaid with borrowings under Athlon's credit agreement discussed below and the SG Credit Agreement was terminated. | |||||||||||||||||||||||||||||||
Athlon FE Credit Agreement | |||||||||||||||||||||||||||||||
Athlon FE was a party to a credit agreement dated October 3, 2011 (as amended, the "FE Credit Agreement"), which was scheduled to mature on October 3, 2016. In May 2012, all outstanding borrowings under the FE Credit Agreement were repaid with borrowings under Athlon's credit agreement discussed below and the FE Credit Agreement was terminated. | |||||||||||||||||||||||||||||||
Athlon Credit Agreement | |||||||||||||||||||||||||||||||
Athlon is a party to a credit agreement dated May 21, 2012 (as amended, the "Athlon Credit Agreement"), which matures on May 21, 2017. Upon entering into the Athlon Credit Agreement, all outstanding borrowings under each of the SG Credit Agreement and the FE Credit Agreement were repaid and the agreements were terminated. On September 5, 2012, Athlon amended the Athlon Credit Agreement to, among other things: (1) exclude amounts due to Apollo under the Transaction Fee Agreement from consolidated current liabilities in the calculation of consolidated current ratio; (2) provide for a reduction in the borrowing base of 20% of any amount incurred under the Second Lien in excess of $100 million; (3) waive the current ratio requirement for the quarter ended June 30, 2012; and (4) reaffirm the borrowing base at $245 million. | |||||||||||||||||||||||||||||||
The Athlon Credit Agreement provides for revolving credit loans to be made to Athlon from time to time and letters of credit to be issued from time to time for the account of Athlon or any of its restricted subsidiaries. The aggregate amount of the commitments of the lenders under the Athlon Credit Agreement is $700 million. Availability under the Athlon Credit Agreement is subject to a borrowing base, which is redetermined semi-annually and upon requested special redeterminations. On December 31, 2012, the borrowing base was $275 million and there were $237 million of outstanding borrowings, $38 million of borrowing capacity, and no outstanding letters of credit under the Athlon Credit Agreement. | |||||||||||||||||||||||||||||||
Athlon incurs a quarterly commitment fee at a rate of 0.5% per year on the unused portion of the Athlon Credit Agreement. | |||||||||||||||||||||||||||||||
Obligations under the Athlon Credit Agreement are secured by a first-priority security interest in substantially all of Athlon's proved reserves and in the equity interests of its operating subsidiaries. In addition, obligations under the Athlon Credit Agreement are guaranteed by Athlon's operating subsidiaries. | |||||||||||||||||||||||||||||||
Loans under the Athlon Credit Agreement are subject to varying rates of interest based on (1) outstanding borrowings in relation to the borrowing base and (2) whether the loan is a Eurodollar loan or a base rate loan. Eurodollar loans under the Athlon Credit Agreement bear interest at the Eurodollar rate plus the applicable margin indicated in the following table, and base rate loans under the Athlon Credit Agreement bear interest at the base rate plus the applicable margin indicated in the following table: | |||||||||||||||||||||||||||||||
Ratio of Outstanding Borrowings to Borrowing Base | Applicable Margin for | Applicable Margin for | |||||||||||||||||||||||||||||
Eurodollar Loans | Base Rate Loans | ||||||||||||||||||||||||||||||
Less than .50 to 1 | 2 | % | 1 | % | |||||||||||||||||||||||||||
Greater than or equal to .50 to 1 but less than .75 to 1 | 2.25 | % | 1.25 | % | |||||||||||||||||||||||||||
Greater than or equal to .75 to 1 but less than .90 to 1 | 2.5 | % | 1.5 | % | |||||||||||||||||||||||||||
Greater than or equal to .90 to 1 | 2.75 | % | 1.75 | % | |||||||||||||||||||||||||||
The "Eurodollar rate" for any interest period (either one, two, three, or six months, as selected by Athlon) is the rate equal to the LIBOR for deposits in dollars for a similar interest period. The "Base Rate" is calculated as the highest of: (1) the annual rate of interest announced by Bank of America, N.A. as its "prime rate"; (2) the federal funds effective rate plus 0.5%; or (3) except during a "LIBOR Unavailability Period," the Eurodollar rate (for dollar deposits for a one-month term) for such day plus 1.0%. | |||||||||||||||||||||||||||||||
Any outstanding letters of credit reduce the availability under the Athlon Credit Agreement. Borrowings under the Athlon Credit Agreement may be repaid from time to time without penalty. | |||||||||||||||||||||||||||||||
The Athlon Credit Agreement contains covenants including, among others, the following: | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a prohibition against incurring debt, subject to permitted exceptions; | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a restriction on creating liens on Athlon's assets and the assets of its operating subsidiaries, subject to permitted exceptions; | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
restrictions on merging and selling assets outside the ordinary course of business; | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
restrictions on use of proceeds, investments, transactions with affiliates, or change of principal business; | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a provision limiting oil and natural gas swaps to a volume not exceeding the percentages indicated in the following table: | |||||||||||||||||||||||||||||||
The Months Immediately Following Any Date of Determination | Projected Production from | Projected Production | |||||||||||||||||||||||||||||
Proved Developed Producing Reserves | from Proved Reserves | ||||||||||||||||||||||||||||||
1st through the 24th month | 90 | % | 65 | % | |||||||||||||||||||||||||||
25th through the 36th month | 85 | % | 50 | % | |||||||||||||||||||||||||||
37th and each succeeding month | 85 | % | 0 | % | |||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a requirement that Athlon maintain a ratio of consolidated current assets (which includes availability under the Athlon Credit Agreement) to consolidated current liabilities (which excludes current maturities of long-term debt, obligations to Apollo arising from the Transaction Fee Agreement, and non-cash derivative assets and liabilities) of not less than 1.0 to 1.0; and | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a requirement that Athlon maintain a ratio of consolidated funded debt to consolidated Adjusted EBITDA (as defined in the Athlon Credit Agreement) of not more than 4.0 to 1.0. | |||||||||||||||||||||||||||||||
As of December 31, 2012, Athlon was in compliance with all covenants of the Athlon Credit Agreement. | |||||||||||||||||||||||||||||||
The Athlon Credit Agreement contains customary events of default, which would permit the lenders to accelerate the debt if not cured within applicable grace periods. If an event of default occurs and is continuing, lenders with a majority of the aggregate commitments may require Bank of America, N.A. to declare all amounts outstanding under the Athlon Credit Agreement to be immediately due and payable. | |||||||||||||||||||||||||||||||
Long-Term Debt Maturities | |||||||||||||||||||||||||||||||
The following table shows Athlon's long-term debt maturities as of December 31, 2012: | |||||||||||||||||||||||||||||||
Payments Due by Period | |||||||||||||||||||||||||||||||
Total | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Athlon Credit Agreement | $ | 237,000 | $ | — | $ | — | $ | — | $ | — | $ | 237,000 | $ | — | |||||||||||||||||
Second Lien | 125,000 | — | — | — | — | 125,000 | — | ||||||||||||||||||||||||
Total | $ | 362,000 | $ | — | $ | — | $ | — | $ | — | $ | 362,000 | $ | — | |||||||||||||||||
During 2012 and 2011, the weighted-average interest rate for total indebtedness was 4.3% and 3.8%, respectively. | |||||||||||||||||||||||||||||||
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||
Stockholders' Equity | ' | ' | ||||||
Stockholders' Equity | ' | ' | ||||||
Note 7. Stockholders’ Equity | ||||||||
Note 7. Equity | ||||||||
In connection with Athlon’s incorporation on April 1, 2013 under the laws of the State of Delaware, it issued 1,000 shares of its common stock to Athlon Holdings GP LLC for an aggregate purchase price of $10.00. On April 26, 2013, in connection with Athlon’s reorganization transactions, certain holders of limited partner interests in Holdings exchanged their Class A interests and Class B interests for an aggregate of 960,907 shares of Athlon’s common stock. In connection with the effectiveness of Athlon’s IPO, these shares were subject to an adjustment based on Athlon’s IPO price of $20.00 per share and an actual 65.266-for-1 stock split resulting in 66,339,615 shares of Athlon’s common stock to be outstanding prior to the closing of the IPO. | ||||||||
On August 23, 2010, Athlon SG entered into a limited partnership agreement with its management group and Apollo. On July 22, 2011, the partnership agreement was amended and restated resulting in the formation of Holdings. The amended and restated partnership agreement required all of Athlon SG's equity contributions to be contributed to Holdings. The holders of all Class A and Class B limited partner units in Athlon SG contributed these units to Holdings in exchange for equivalent units of Holdings. Apollo and Holdings' management group are Class A limited partners. The following table shows the partnership interest in Holdings as of December 31, 2012: | ||||||||
As discussed in “Note 1. Formation of the Company and Description of Business”, on August 7, 2013, Athlon completed its IPO of 15,789,474 shares of its common stock at $20.00 per share and received net proceeds of approximately $295.6 million, after deducting underwriting discounts and commissions and offering expenses. Athlon used the net proceeds from the IPO to purchase New Holdings Units from Holdings. Holdings used the proceeds it received as a result of Athlon’s purchase of New Holdings Units (i) to reduce outstanding borrowings under the Holdings Credit Agreement, (ii) to provide additional liquidity for use in its drilling program, and (iii) for general corporate purposes, including potential acquisitions. Upon consummation of the IPO, Athlon’s ownership percentage of Holdings increased, resulting in a decrease in the noncontrolling interest from approximately 3.2% to approximately 2.2%. | ||||||||
During the third quarter of 2013, Athlon recorded a reclassification of approximately $12.5 million from “Retained earnings” to “Additional paid-in capital” on the accompanying Consolidated Statement of Changes in Equity related to derivative activity that occurred prior to Athlon’s corporate reorganization on April 26, 2013. This resulted in a decrease in “Net income attributable to noncontrolling interest” on the accompanying Consolidated Statements of Operations of approximately $0.4 million during the third quarter of 2013. | Partnership | |||||||
Interest | ||||||||
Athlon Holdings LLC | General Partner | 0 | % | |||||
Apollo Athlon Holdings LLC | Class A Partner | 97.2 | % | |||||
Management group | Class A Partner | 2.8 | % | |||||
As of December 31, 2012, Athlon had remaining capital commitments of approximately $38.1 million from Apollo and none from management. | ||||||||
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Earnings Per Share | ' | ' | ||||||||||||||||||||
Earnings Per Share | ' | ' | ||||||||||||||||||||
Note 8. Earnings Per Share | ||||||||||||||||||||||
Note 11. Earnings Per Share | ||||||||||||||||||||||
Prior to the consummation of Athlon’s IPO, Athlon had 960,907 shares of outstanding common stock. In conjunction with the closing of the IPO, certain Class A limited partners and Class B limited partners of Holdings that exchanged their interests for shares of Athlon’s common stock were subject to an adjustment based on Athlon’s IPO price of $20.00 per share and an actual 65.266-for-1 stock split. Following this adjustment and stock split, the number of outstanding shares of Athlon’s common stock increased from 960,907 shares to 66,339,615 shares. The one-to-one conversion of the Holdings interests in April 2013 to 960,907 shares of Athlon common stock that occurred in connection with the IPO is akin to a stock split and has been treated as such in Athlon’s earnings per share (“EPS”) calculations. Accordingly, Athlon assumes that 66,339,615 shares of common stock were outstanding during periods prior to Athlon’s IPO for purposes of calculating EPS. | ||||||||||||||||||||||
Prior to the consummation of Athlon's IPO, Athlon had 960,907 shares of outstanding common stock. In conjunction with the closing of the IPO, certain Class A limited partners and Class B limited partners of Holdings that exchanged their interests for shares of Athlon's common stock were subject to an adjustment based on Athlon's IPO price of $20.00 per share and an actual 65.266-for-1 stock split. Following this adjustment and stock split, the number of outstanding shares of Athlon's common stock increased from 960,907 shares to 66,339,615 shares. The one-to-one conversion of the Holdings' interests in April 2013 to 960,907 shares of Athlon common stock that occurred in connection with the IPO is akin to a stock split and has been treated as such in Athlon's earnings per share ("EPS") calculations. Accordingly, Athlon assumes that 66,339,615 shares of common stock were outstanding during periods prior to Athlon's IPO for purposes of calculating EPS. | ||||||||||||||||||||||
The following table reflects the allocation of net income (loss) to common stockholders and EPS computations for the periods indicated: | ||||||||||||||||||||||
The following table reflects the allocation of net income (loss) to common stockholders and EPS computations for the periods indicated: | ||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
(in thousands, except per share amounts) | Year ended | |||||||||||||||||||||
Basic EPS | December 31, | |||||||||||||||||||||
Numerator: | 2012 | 2011 | ||||||||||||||||||||
Undistributed net income (loss) attributable to stockholders | $ | 2,482 | $ | (2,096 | ) | $ | 37,058 | $ | 42,508 | (in thousands, except | ||||||||||||
Participation rights of unvested RSUs in undistributed earnings | (6 | ) | — | (6 | ) | — | per share amounts) | |||||||||||||||
Basic undistributed net income (loss) attributable to stockholders | $ | 2,476 | $ | (2,096 | ) | $ | 37,052 | $ | 42,508 | Basic EPS | ||||||||||||
Denominator: | Numerator: | |||||||||||||||||||||
Basic weighted average shares outstanding | 76,637 | 66,340 | 69,810 | 66,340 | Basic undistributed net income (loss) attributable to stockholders | $ | 53,014 | $ | (1,129 | ) | ||||||||||||
Basic EPS attributable to stockholders | $ | 0.03 | $ | (0.03 | ) | $ | 0.53 | $ | 0.64 | |||||||||||||
Denominator: | ||||||||||||||||||||||
Diluted EPS | Basic weighted average shares outstanding | 66,340 | 66,340 | |||||||||||||||||||
Numerator: | ||||||||||||||||||||||
Undistributed net income (loss) attributable to stockholders | $ | 2,482 | $ | (2,096 | ) | $ | 37,058 | $ | 42,508 | Basic EPS attributable to stockholders | $ | 0.8 | $ | (0.02 | ) | |||||||
Participation rights of unvested RSUs in undistributed earnings | (6 | ) | — | (6 | ) | — | ||||||||||||||||
Effect of conversion of New Holdings Units to shares of Athlon’s common stock | (215 | ) | — | 616 | — | Diluted EPS | ||||||||||||||||
Diluted undistributed net income (loss) attributable to stockholders | $ | 2,261 | $ | (2,096 | ) | $ | 37,668 | $ | 42,508 | Numerator: | ||||||||||||
Denominator: | Diluted undistributed net income (loss) attributable to stockholders | $ | 53,014 | $ | (1,129 | ) | ||||||||||||||||
Basic weighted average shares outstanding | 76,637 | 66,340 | 69,810 | 66,340 | ||||||||||||||||||
Effect of conversion of New Holdings Units to shares of Athlon’s common stock (a) | 1,856 | — | 1,856 | 1,856 | Denominator: | |||||||||||||||||
Diluted weighted average shares outstanding | 78,493 | 66,340 | 71,666 | 68,196 | Basic weighted average shares outstanding | 66,340 | 66,340 | |||||||||||||||
Diluted EPS attributable to stockholders | $ | 0.03 | $ | (0.03 | ) | $ | 0.53 | $ | 0.62 | Effect of conversion of New Holdings Units to shares of Athlon's common stock(a) | 1,856 | — | ||||||||||
(a) For the three months ended September 30, 2012, 1,855,563 New Holdings Units were outstanding but excluded from the EPS calculations because their effect would have been antidilutive. | Diluted weighted average shares outstanding | 68,196 | 66,340 | |||||||||||||||||||
Diluted EPS attributable to stockholders | $ | 0.78 | $ | (0.02 | ) | |||||||||||||||||
(a) | ||||||||||||||||||||||
For 2011, 1,855,563 New Holdings Units were outstanding but excluded from the EPS calculations because their effect would have been antidilutive. | ||||||||||||||||||||||
Incentive_Stock_Plans
Incentive Stock Plans | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||
Incentive Stock Plans | ' | ' | |||||||||||||||||||||||||
Incentive Stock Plans | ' | ' | |||||||||||||||||||||||||
Note 9. Incentive Stock Plans | |||||||||||||||||||||||||||
Note 8. Employee Benefit Plans | |||||||||||||||||||||||||||
In August 2013, Athlon adopted the Athlon Energy Inc. 2013 Incentive Award Plan (the “Plan”). The principal purpose of the Plan will be to attract, retain and engage selected employees, consultants, and directors through the granting of equity and equity-based compensation awards. Employees, consultants, and directors of Athlon and its subsidiaries are eligible to receive awards under the Plan. The Compensation Committee will administer the Plan unless our Board of Directors assumes direct authority for administration. The Plan provides for the grant of stock options (including non-qualified stock options and incentive stock options), restricted stock, dividend equivalents, stock payments, restricted stock units (“RSUs”), performance awards, stock appreciation rights, and other equity-based and cash-based awards, or any combination thereof. | |||||||||||||||||||||||||||
401(k) Plan | |||||||||||||||||||||||||||
Initially, the aggregate number of our shares of common stock available for issuance pursuant to awards granted under the Plan will be the sum of 8,400,000 shares, subject to adjustment as described below plus an annual increase on the first day of each calendar year beginning January 1, 2014 and ending on and including the last January 1 prior to the expiration date of the Plan, equal to the least of (i) 12,000,000 shares, (ii) 4% of the shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year, and (iii) such smaller number of shares as determined by the Board of Directors. This number will also be adjusted due to the following shares becoming eligible to be used again for grants under the Plan: | |||||||||||||||||||||||||||
Athlon made contributions to its 401(k) plan, which is a voluntary and contributory plan for eligible employees based on a percentage of employee contributions, of approximately $454 thousand and $219 thousand during 2012 and 2011, respectively. Athlon's 401(k) plan does not allow employees to invest in securities of Athlon. | |||||||||||||||||||||||||||
· shares subject to awards or portions of awards granted under the Plan which are forfeited, expire, or lapse for any reason, or are settled for cash without the delivery of shares, to the extent of such forfeiture, expiration, lapse or cash settlement; and | |||||||||||||||||||||||||||
· shares that Athlon repurchases prior to vesting so that such shares are returned to Athlon. | Class B Limited Partner Interests | ||||||||||||||||||||||||||
The Plan does not provide for individual limits on awards that may be granted to any individual participant under the Plan. Rather, the amount of awards to be granted to individual participants are determined by the Board of Directors or the Compensation Committee from time to time, as part of their compensation decision-making processes, provided, however, that the Plan does not permit awards having a grant date fair value in excess of $700,000 to be granted to Athlon’s non-employee directors in any year. | Holdings' limited partnership agreement provides for the issuance of Class B limited partner interests. The Class B interests entitle the holder to participate in the net profits of Holdings, but are subject to various performance criteria. Class A interest holders are entitled to a return of their initial investment plus interest compounded at 8% annually (the "Class A Preference Amount"). Upon the occurrence of a liquidity event and after the Class A Preference Amount has been satisfied, 80% and 20% of the remaining net profits will be distributed to holders of Class A interests and Class B interests, respectively. The Class B interests vest over four or five years or upon certain performance thresholds being met by Holdings. Class B interests can also vest on the occurrence of certain events such as a change in control or in some cases upon termination of employment with Holdings. The total number of Class B interests that may be issued pursuant to the partnership agreement is 100,000. As of December 31, 2012, there were 6,200 Class B interests available for issuance under the partnership agreement. Class B interests that are forfeited will again become available for issuance under the partnership agreement. | ||||||||||||||||||||||||||
As of September 30, 2013, there were 7,776,087 shares available for issuance under the Plan. During the nine months ended September 30, 2013, Athlon recorded non-cash stock-based compensation expense related to the Plan of $492,000, which was allocated to lease operating expense and general and administrative expense in the accompanying Consolidated Statements of Operations based on the allocation of the respective employees’ compensation. During the nine months ended September 30, 2013, Athlon capitalized $37,000 of non-cash stock-based compensation expense related to the Plan as a component of “Proved properties, including wells and related equipment” in the accompanying Consolidated Balance Sheets. | Management evaluated the terms of the Class B interests granted during 2010, in particular the potential impact of the performance criteria on the potential value of the Class B interests, and concluded that any compensation expense related to those grants would have been nominal. Management had independent valuations of its Class B interests granted during 2012 and 2011 and recorded approximately $152 thousand and $106 thousand, respectively, of non-cash equity-based compensation expense, which was allocated to LOE and general and administrative expenses in the accompanying Consolidated Statements of Operations based on the allocation of the respective employees' cash compensation. During 2012, Athlon also capitalized approximately $93 thousand of non-cash stock-based compensation expense as a component of "Proved properties, including wells and related equipment" in the accompanying Consolidated Balance Sheets. | ||||||||||||||||||||||||||
RSUs vest over three years, subject to performance criteria for certain members of management. The following table summarizes the changes in Athlon’s unvested RSUs for the nine months ended September 30, 2013: | The fair value of Class B interests granted was estimated on the grant date using an option pricing model based on the following assumptions for the periods indicated: | ||||||||||||||||||||||||||
Weighted - | |||||||||||||||||||||||||||
Average | Year Ended December 31, | ||||||||||||||||||||||||||
Number of | Grant Date | 2012 | 2011 | ||||||||||||||||||||||||
Shares | Fair Value | Expected volatility | 47 | % | 44 | % | |||||||||||||||||||||
Outstanding at January 1 | — | $ | — | Expected dividend yield | 0 | % | 0 | % | |||||||||||||||||||
Granted | 623,913 | 32.21 | Expected term (in years) | 1.52 | 1.65 | ||||||||||||||||||||||
Vested | — | — | Risk-free interest rate | 0.23 | % | 0.35 | % | ||||||||||||||||||||
Forfeited | — | — | Weighted-average grant date fair value per interest | $ | 128.94 | $ | 134.84 | ||||||||||||||||||||
Outstanding at September 30 | 623,913 | 32.21 | |||||||||||||||||||||||||
The expected volatility was calculated based on the average historical volatility of each company in Athlon's peer group based on historical stock price data. The expected term of the Class B interests was based on expectations about future behavior. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the grant date for a period of time commensurate with the expected term of the Class B interests. | |||||||||||||||||||||||||||
As of September 30, 2013, there were 396,413 unvested RSUs, all of which were granted during September 2013, in which the vesting is dependent only on the passage of time and continued employment. Additionally, as of September 30, 2013, there were 227,500 unvested RSUs, all of which were granted during September 2013, in which the vesting is dependent not only on the passage of time and continued employment, but also on the achievement of certain performance criteria. | The following table summarizes the changes in Holdings' Class B interests for the periods indicated: | ||||||||||||||||||||||||||
None of Athlon’s unvested RSUs are subject to variable accounting. As of September 30, 2013, Athlon had approximately $17.9 million of total unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately 2.8 years. | |||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||
Class B Interests | 2012 | 2011 | |||||||||||||||||||||||||
Number of | Weighted- | Number of | Weighted- | ||||||||||||||||||||||||
Holdings’ limited partnership agreement provided for the issuance of Class B limited partner interests. As discussed in “Note 1. Formation of the Company and Description of Business”, in connection with Holdings’ corporate reorganization, the holders of the Class B limited partner interests in Holdings exchanged their interests for common stock of Athlon subject to the same conditions and vesting terms. Upon the consummation of Athlon’s IPO on August 1, 2013, the remaining unvested common stock awards, which were formerly Class B interests in Holdings, vested and Athlon recognized non-cash equity-based compensation expense of approximately $1.5 million. | Class B | Average | Class B | Average | |||||||||||||||||||||||
Interests | Grant Date | Interests | Grant Date | ||||||||||||||||||||||||
During the nine months ended September 30, 2013 and 2012, Athlon recorded approximately $1.3 million and $186,000, respectively, of non-cash equity-based compensation expense related to Class B interests, which was allocated to lease operating expense and general and administrative expenses in the accompanying Consolidated Statements of Operations based on the allocation of the respective employees’ compensation. During the nine months ended September 30, 2013 and 2012, Athlon capitalized approximately $421,000 and $68,000, respectively, of non-cash stock-based compensation expense related to Class B interests as a component of “Proved properties, including wells and related equipment” in the accompanying Consolidated Balance Sheets. | Fair Value | Fair Value | |||||||||||||||||||||||||
Outstanding at beginning of period | 68,662 | $ | 15.93 | 82,153 | $ | — | |||||||||||||||||||||
Granted | 2,195 | 128.94 | 9,050 | 134.84 | |||||||||||||||||||||||
Vested | (20,375 | ) | 11.32 | (19,046 | ) | 3.11 | |||||||||||||||||||||
Forfeited | (270 | ) | 140.72 | (3,495 | ) | 19.13 | |||||||||||||||||||||
Outstanding at end of year | 50,212 | 22.07 | 68,662 | 15.93 | |||||||||||||||||||||||
The following table provides information regarding the expected vesting of Holdings' outstanding Class B interests at December 31, 2012: | |||||||||||||||||||||||||||
Year of Vesting | |||||||||||||||||||||||||||
Year of Grant | 2013 | 2014 | 2015 | 2016 | 2017 | Total | |||||||||||||||||||||
2010 | 18,664 | 14,497 | 8,664 | — | — | 41,825 | |||||||||||||||||||||
2011 | 1,711 | 1,711 | 1,711 | 1,329 | — | 6,462 | |||||||||||||||||||||
2012 | 385 | 385 | 385 | 385 | 385 | 1,925 | |||||||||||||||||||||
Total | 20,760 | 16,593 | 10,760 | 1,714 | 385 | 50,212 | |||||||||||||||||||||
As of December 31, 2012, Athlon had approximately $1.0 million of total unrecognized compensation cost related to unvested Class B interests, which is expected to be recognized over a weighted-average period of approximately 3.7 years. During 2012 and 2011, there were 20,375 and 19,046, respectively, Class B interests that vested, the total fair value of which was approximately $231 thousand and $59 thousand, respectively. | |||||||||||||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||||
Commitments and Contingencies | ' | ' | ||||||||||||||||||||||
Commitments and Contingencies | ' | ' | ||||||||||||||||||||||
Note 10. Commitments and Contingencies | ||||||||||||||||||||||||
Note 4. Commitments and Contingencies | ||||||||||||||||||||||||
From time to time, Athlon is a party to ongoing legal proceedings in the ordinary course of business, including workers’ compensation claims and employment related disputes. Management does not believe the results of these proceedings, individually or in the aggregate, will have a material adverse effect on Athlon’s business, financial position, results of operations, or liquidity. | ||||||||||||||||||||||||
Leases | ||||||||||||||||||||||||
Additionally, Athlon has contractual obligations related to future plugging and abandonment expenses on oil and natural gas properties and related facilities disposal, long-term debt, commodity derivative contracts, operating leases, and development commitments. | ||||||||||||||||||||||||
Athlon leases certain office space that has non-cancelable lease terms in excess of one year. The following table summarizes by year the remaining non-cancelable future payments under these operating leases as of December 31, 2012: | ||||||||||||||||||||||||
Payments Due by Period | ||||||||||||||||||||||||
Total | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Corporate office lease | $ | 1,412 | $ | 381 | $ | 375 | $ | 375 | $ | 281 | $ | — | $ | — | ||||||||||
Midland office lease | 375 | 90 | 92 | 96 | 97 | — | — | |||||||||||||||||
Total | $ | 1,787 | $ | 471 | $ | 467 | $ | 471 | $ | 378 | $ | — | $ | — | ||||||||||
Athlon's operating lease rental expense was approximately $507 thousand and $272 thousand during 2012 and 2011, respectively. | ||||||||||||||||||||||||
Litigation | ||||||||||||||||||||||||
Athlon is a party to ongoing legal proceedings in the ordinary course of business. Management does not believe the results of these proceedings, individually or in the aggregate, will have a material adverse effect on Athlon's business, financial position, results of operations, or liquidity. | ||||||||||||||||||||||||
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Related Party Transactions | ' | ' |
Related Party Transactions | ' | ' |
Note 11. Related Party Transactions | ||
Note 10. Related Party Transactions | ||
Transaction Fee Agreement | ||
Transaction Fee Agreement | ||
Holdings was a party to a Transaction Fee Agreement, dated August 23, 2010, which required Holdings to pay a fee to Apollo equal to 2% of the total equity contributed to Holdings, as defined in the agreement, in exchange for consulting and advisory services provided by Apollo. In October 2012, Apollo assigned its rights and obligations under the Transaction Fee Agreement to an affiliate, Apollo Global Securities, LLC. Upon the consummation of Athlon’s IPO, Holdings terminated the Transaction Fee Agreement. Since Holdings’ inception through the termination of the Transaction Fee Agreement, it incurred transaction fees under the Transaction Fee Agreement of approximately $7.5 million in total. | ||
Athlon is a party to a Transaction Fee Agreement, dated August 23, 2010, which requires Athlon to pay a fee to Apollo equal to 2% of the total equity contributed to Athlon, as defined in the agreement, in exchange for consulting and advisory services provided by Apollo. In October 2012, Apollo assigned its rights and obligations under the Transaction Fee Agreement to Apollo Global Securities, LLC. In December 2012, Athlon incurred a transaction fee payable to Apollo Global Securities, LLC of $0.8 million related to a $40 million capital contribution received from Apollo. Upon the closing of the SandRidge acquisition in January 2011, Athlon SG incurred a transaction fee payable to Apollo of approximately $2.3 million. Upon the closing of the Element acquisition in October 2011, Athlon FE incurred a transaction fee payable to Apollo of approximately $4.3 million. All transaction fees incurred under the Transaction Fee Agreement are included in "Acquisition costs" in the accompanying Consolidated Statements of Operations during the period incurred. | ||
Services Agreement | ||
Services Agreement | ||
Holdings was a party to a Services Agreement, dated August 23, 2010, which required Holdings to compensate Apollo for consulting and advisory services equal to the higher of (i) 1% of earnings before interest, income taxes, DD&A, and exploration expense per quarter and (ii) $62,500 per quarter (the “Advisory Fee”); provided, however, that such Advisory Fee for any calendar year shall not exceed $500,000. The Services Agreement also provided for reimbursement to Apollo for any reasonable out-of-pocket expenses incurred while performing services under the Services Agreement. During the nine months ended September 30, 2013 and 2012, Holdings incurred approximately $500,000 and $493,000, respectively, of Advisory Fees. All fees incurred under the Services Agreement are included in “General and administrative expenses” in the accompanying Consolidated Statements of Operations. | ||
Athlon is also a party to a Services Agreement, dated August 23, 2010, which requires Athlon to further compensate Apollo for consulting and advisory services equal to a minimum of $62,500 per quarter or 1% of net income before interest, income taxes, and DD&A, not to exceed $500,000 in any calendar year. The Services Agreement also provides for reimbursement to Apollo for any reasonable out-of-pocket expenses incurred while performing under the Services Agreement. During 2012 and 2011, Athlon incurred approximately $493 thousand and $411 thousand, respectively, of fees under the Services Agreement, which is included in "General and administrative expenses" in the accompanying Consolidated Statements of Operations. | ||
Upon the consummation of Athlon’s IPO, Holdings terminated the Services Agreement and, in connection with the termination, Holdings paid $2.4 million (plus $132,000 of unreimbursed fees) to Apollo. Such payment corresponded to the present value as of the date of termination of the aggregate annual fees that would have been payable during the remainder of the term of the Services Agreement (assuming a term ending on August 23, 2020). Under the Services Agreement, Holdings also agreed to indemnify Apollo and its affiliates and their respective limited partners, general partners, directors, members, officers, managers, employees, agents, advisors, their directors, officers, and representatives for potential losses relating to the services contemplated under the Services Agreement. | ||
Participation of Apollo Global Securities, LLC in Senior Notes Offering and IPO | ||
Apollo Global Securities, LLC is an affiliate of the Apollo Funds and received a portion of the gross spread as an initial purchaser of the Notes of $0.5 million. Apollo Global Securities, LLC was also an underwriter in Athlon’s IPO and received a portion of the discounts and commissions paid to the underwriters in the IPO of approximately $0.9 million. | ||
Distribution | ||
Holdings used a portion of the net proceeds from the Notes to make a distribution to its Class A limited partners, including the Apollo Funds and its management team and employees. The Apollo Funds received approximately $73 million of the distribution and the remaining Class A limited partners received approximately $2 million, in the aggregate. | ||
Exchange Agreement | ||
Upon the consummation of its IPO, Athlon entered into an exchange agreement with certain members of its management team and employees who hold New Holdings Units after the closing of the IPO. Under the exchange agreement, each such holder (and certain permitted transferees thereof) may, under certain circumstances after the date of the closing of the IPO (subject to the terms of the exchange agreement), exchange their New Holdings Units for shares of Athlon’s common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. As a holder exchanges its New Holdings Units, Athlon’s interest in Holdings will be correspondingly increased. | ||
Tax Receivable Agreement | ||
Upon the consummation of its IPO, Athlon entered into a tax receivable agreement with certain members of its management team and employees who hold New Holdings Units after the closing of the IPO that provides for the payment from time to time by Athlon to such unitholders of Holdings of 85% of the amount of the benefits, if any, that Athlon is deemed to realize as a result of increases in tax basis and certain other tax benefits related to exchanges of New Holdings Units pursuant to the exchange agreement, including tax benefits attributable to payments under the tax receivable agreement. These payment obligations are obligations of Athlon and not of Holdings. For purposes of the tax receivable agreement, the benefit deemed realized by Athlon will be computed by comparing its actual income tax liability (calculated with certain assumptions) to the amount of such taxes that Athlon would have been required to pay had there been no increase to the tax basis of the assets of Holdings as a result of the exchanges and had Athlon not entered into the tax receivable agreement. | ||
The step-up in basis will depend on the fair value of the New Holdings Units at conversion. There is no intent of the holders of New Holdings Units to exchange their units for shares of Athlon’s common stock in the foreseeable future. In addition, Athlon does not expect to be in a tax paying position before 2019. Therefore, Athlon cannot presently estimate what the benefit or payments under the tax receivable agreement will be on a factually supportable basis, and accordingly not recognized as a liability. |
Subsequent_Events
Subsequent Events | 9 Months Ended | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||
Subsequent Events | ' | ' | |||||||||||||||||||
Subsequent Events | ' | ' | |||||||||||||||||||
Note 12. Subsequent Events | |||||||||||||||||||||
Note 12. Subsequent Events | |||||||||||||||||||||
In November 2013, Holdings amended the Holdings Credit Agreement to, among other things, increase the borrowing base to $525 million. As of November 14, 2013, there were no of outstanding borrowings under the Holdings Credit Agreement. | |||||||||||||||||||||
In January 2013, Athlon increased the borrowing base under the Athlon Credit Agreement to $295 million. | |||||||||||||||||||||
During February 2013, Athlon entered into additional oil swaps. The following table summarizes open commodity derivative contracts as of March 8, 2013: | |||||||||||||||||||||
Period | Average | Weighted- | Average | Weighted- | Average | Weighted- | |||||||||||||||
Daily | Average | Daily | Average | Daily | Average | ||||||||||||||||
Floor | Floor | Cap | Cap | Swap | Swap | ||||||||||||||||
Volume | Price | Volume | Price | Volume | Price | ||||||||||||||||
(Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | ||||||||||||||||
2013 | 150 | $ | 75 | 150 | $ | 105.95 | 5,500 | $ | 94.5 | ||||||||||||
2014 | — | — | — | — | 5,450 | 92.83 | |||||||||||||||
2015 | — | — | — | — | 1,300 | 93.18 | |||||||||||||||
In February 2013, Athlon also entered into basis differential swaps for 5,000 Bbls/D at $1.20/Bbl for March through December 2013. | |||||||||||||||||||||
These financial statements considered subsequent events through March 8, 2013, the date the consolidated financial statements were available to be issued. | |||||||||||||||||||||
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||
Basis of Presentation | ' | ' | |||||||
Consolidation | ' | ' | |||||||
Principles of Consolidation | |||||||||
Athlon’s consolidated financial statements include the accounts of its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | |||||||||
Athlon's consolidated financial statements include the accounts of its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | |||||||||
In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly, in all material respects, Athlon’s financial position as of September 30, 2013, results of operations for the three and nine months ended September 30, 2013 and 2012, and cash flows for the nine months ended September 30, 2013 and 2012. All adjustments are of a normal recurring nature. These interim results are not necessarily indicative of results for an entire year. | |||||||||
Certain amounts and disclosures have been condensed and omitted from the unaudited consolidated financial statements pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Therefore, these unaudited consolidated financial statements should be read in conjunction with Holdings’ audited consolidated financial statements and related notes thereto included in Athlon’s final prospectus dated August 1, 2013 and filed with the SEC pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended, on August 5, 2013. | |||||||||
Income Taxes | ' | ' | |||||||
Income Taxes | |||||||||
Income Taxes | |||||||||
Athlon accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. | |||||||||
Prior to its corporate reorganization, Athlon was treated as a partnership for federal and state income tax purposes with each partner being separately taxed on their share of Athlon's taxable income. Therefore, no provision for current or deferred federal income taxes has been provided for in the accompanying Consolidated Financial Statements. However, Athlon's operations located in Texas are subject to an entity-level tax, the Texas margin tax, at a statutory rate of up to 0.7% of income that is apportioned to Texas. Deferred tax assets and liabilities are recognized for future Texas margin tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective Texas margin tax bases. | |||||||||
Athlon periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets, including net operating losses. In making this determination, Athlon considers all available positive and negative evidence and makes certain assumptions. Athlon considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years. Athlon believes it is more likely than not that certain net operating losses can be carried forward and utilized. | |||||||||
Net income (loss) for financial statement purposes may differ significantly from taxable income reportable to partners as a result of differences between the tax bases and financial reporting bases of assets and liabilities and the taxable income allocation requirements under the partnership agreement. In addition, individual partners have different investment bases depending upon the timing and price of acquisition of their partnership units, and each partner's tax accounting, which is partially dependent upon the partner's tax position, differs from the accounting followed in the accompanying Consolidated Financial Statements. As a result, the aggregate difference in the basis of net assets for financial and tax reporting purposes cannot be readily determined as Athlon does not have access to information about each partner's tax attributes in Holdings. | |||||||||
In April 2013, Athlon had a corporate reorganization to effectuate its IPO. Holdings, Athlon’s accounting predecessor, is a partnership not subject to federal income tax. Pursuant to the steps of the corporate reorganization, certain Class A limited partners and the Class B limited partners of Holdings exchanged their interests for shares of Athlon’s common stock. Athlon’s operations are now subject to federal income tax. The tax implications of the corporate reorganization and the tax impact of the conversion to operating as a taxable entity have been reflected in the accompanying consolidated financial statements. | |||||||||
Athlon performs a periodic evaluation of tax positions to review the appropriate recognition threshold for each tax position recognized in its consolidated financial statements. As of December 31, 2012 and 2011, all of Athlon's tax positions met the "more-likely-than-not" threshold. As a result, no additional tax expense, interest, or penalties have been accrued. | |||||||||
Noncontrolling Interest | ' | ' | |||||||
Noncontrolling Interest | |||||||||
As of September 30, 2013, management and employees owned approximately 2.2% of Holdings. Athlon owns 100% of Athlon Holdings GP LLC, which is Holdings’ general partner. Considering the presumption of control, Athlon has fully consolidated the financial position, results of operations, and cash flows of Holdings. | |||||||||
As presented in the accompanying Consolidated Balance Sheets, “Noncontrolling interest” as of September 30, 2013 of approximately $10.0 million represents management and employees’ 1,855,563 New Holdings Units that are exchangeable for shares of Athlon’s common stock on a one-for-one basis. As presented in the accompanying Consolidated Statements of Operations, “Net income (loss) attributable to noncontrolling interest” for the three and nine months ended September 30, 2013 of approximately $(0.2) million and $0.6 million, respectively, represents the net income of Holdings attributable to management and employees since April 26, 2013. | |||||||||
The following table summarizes the effects of changes in Athlon’s partnership interest in Holdings on Athlon’s equity for the periods indicated: | |||||||||
Three | Nine months | ||||||||
months | ended | ||||||||
ended | September | ||||||||
September | 30, 2013 | ||||||||
30, 2013 | |||||||||
(in thousands) | |||||||||
Net income attributable to stockholders | $ | 2,482 | $ | 37,058 | |||||
Transfer from noncontrolling interest: | |||||||||
Increase in Athlon’s paid-in capital for corporate reorganization | — | 290,950 | |||||||
Increase in Athlon’s paid-in capital for issuance of 15,789,474 shares of common stock in initial public offering | 295,473 | 295,473 | |||||||
Net transfer from noncontrolling interest | 295,473 | 586,423 | |||||||
Change from net income attributable to stockholders and transfers from (to) noncontrolling interest | $ | 297,955 | $ | 623,481 | |||||
New Accounting Pronouncements | ' | ' | |||||||
New Accounting Pronouncements | |||||||||
New Accounting Pronouncements | |||||||||
In December 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2011-11, “Disclosures about Offsetting Assets and Liabilities” and in January 2013 issued ASU 2013-01, “Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities”. These ASUs created new disclosure requirements regarding the nature of an entity’s rights of setoff and related arrangements associated with its derivative instruments, repurchase agreements, and securities lending transactions. Certain disclosures of the amounts of certain instruments subject to enforceable master netting arrangements are required, irrespective of whether the entity has elected to offset those instruments in the statement of financial position. These ASUs were effective retrospectively for annual reporting periods beginning on or after January 1, 2013. The adoption of these ASUs did not impact Athlon’s financial position, results of operations, or liquidity. | |||||||||
In May 2011, the FASB issued Accounting Standards Update ("ASU") 2011-04, "Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs". ASU 2011-04 amended ASC 820 to converge the fair value measurement guidance in GAAP and International Financial Reporting Standards. Certain of the amendments clarified the application of existing fair value measurement requirements, while other amendments changed a particular principle in ASC 820. In addition, ASU 2011-04 required additional fair value disclosures. The amendments were effective for annual periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on Athlon's financial position, results of operations, or liquidity. | |||||||||
No other new accounting pronouncements issued or effective from January 1, 2013 through the date of this Report, had or are expected to have a material impact on Athlon’s unaudited consolidated financial statements. | |||||||||
In December 2011, the FASB issued ASU 2011-11, "Disclosures about Offsetting Assets and Liabilities" and in January 2013 issued ASU 2013-01, "Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities". These ASUs create new disclosure requirements regarding the nature of an entity's rights of setoff and related arrangements associated with its derivative instruments, repurchase agreements, and securities lending transactions. Certain disclosures of the amounts of certain instruments subject to enforceable master netting arrangements would be required, irrespective of whether the entity has elected to offset those instruments in the statement of financial position. These ASUs are effective retrospectively for annual reporting periods beginning on or after January 1, 2013. The adoption of these ASUs will not impact Athlon's financial position, results of operations, or liquidity. | |||||||||
No other new accounting pronouncements issued or effective during 2012, or in 2013 through the date of this report, had or are expected to have a material impact on Athlon's consolidated financial statements. | |||||||||
Basis_of_Presentation_Tables
Basis of Presentation (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Basis of Presentation | ' | |||||||
Summary of effects of changes in Athlon's partnership interest in Holdings on Athlon's equity | ' | |||||||
Three | Nine months | |||||||
months | ended | |||||||
ended | September | |||||||
September | 30, 2013 | |||||||
30, 2013 | ||||||||
(in thousands) | ||||||||
Net income attributable to stockholders | $ | 2,482 | $ | 37,058 | ||||
Transfer from noncontrolling interest: | ||||||||
Increase in Athlon’s paid-in capital for corporate reorganization | — | 290,950 | ||||||
Increase in Athlon’s paid-in capital for issuance of 15,789,474 shares of common stock in initial public offering | 295,473 | 295,473 | ||||||
Net transfer from noncontrolling interest | 295,473 | 586,423 | ||||||
Change from net income attributable to stockholders and transfers from (to) noncontrolling interest | $ | 297,955 | $ | 623,481 |
Proved_Properties_Tables
Proved Properties (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Proved Properties | ' | ' | ||||||||||||||
Schedule of proved properties including wells and related equipment | ' | ' | ||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
(in thousands) | December 31, | |||||||||||||||
Proved leasehold costs | $ | 411,657 | $ | 376,271 | 2012 | 2011 | ||||||||||
Wells and related equipment - Completed | 634,980 | 379,036 | (in thousands) | |||||||||||||
Wells and related equipment - In process | 38,244 | 33,264 | Proved leasehold costs | $ | 376,271 | $ | 283,302 | |||||||||
Total proved properties | $ | 1,084,881 | $ | 788,571 | Wells and related equipment—completed | 379,036 | 89,140 | |||||||||
Wells and related equipment—in process | 33,264 | 26,763 | ||||||||||||||
Total proved properties | $ | 788,571 | $ | 399,205 | ||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Summary of open commodity derivative contracts | ' | ' | |||||||||||||||||||||||||||||||||||||||||
The following table summarizes open commodity derivative contracts as of December 31, 2012: | |||||||||||||||||||||||||||||||||||||||||||
Average | Weighted - | Average | Weighted - | Average | Weighted - | Asset | |||||||||||||||||||||||||||||||||||||
Daily | Average | Daily | Average | Daily | Average | (Liability) | |||||||||||||||||||||||||||||||||||||
Floor | Floor | Cap | Cap | Swap | Swap | Fair Market | Period | Average | Weighted- | Average | Weighted- | Average | Weighted- | Asset | |||||||||||||||||||||||||||||
Period | Volume | Price | Volume | Price | Volume | Price | Value | Daily | Average | Daily | Average | Daily | Average | Fair Market | |||||||||||||||||||||||||||||
(Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (in thousands) | Floor | Floor | Cap | Cap | Swap | Swap | Value | ||||||||||||||||||||||||||||||
Oct. - Dec. 2013 | 150 | $ | 75 | 150 | $ | 105.95 | 7,000 | $ | 95.01 | $ | (4,205 | ) | Volume | Price | Volume | Price | Volume | Price | |||||||||||||||||||||||||
2014 | — | — | — | — | 7,950 | 92.67 | (7,532 | ) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (in thousands) | ||||||||||||||||||||||||||||
2015 | — | — | — | — | 1,300 | 93.18 | 2,101 | 2013 | 150 | $ | 75 | 150 | $ | 105.95 | 5,000 | $ | 94.15 | $ | 1,654 | ||||||||||||||||||||||||
$ | (9,636 | ) | 2014 | — | — | — | — | 4,950 | 92.65 | 956 | |||||||||||||||||||||||||||||||||
2015 | — | — | — | — | 800 | 94.86 | 1,379 | ||||||||||||||||||||||||||||||||||||
$ | 3,989 | ||||||||||||||||||||||||||||||||||||||||||
Schedule of committed 10% or greater (in terms of fair market value) of oil derivative contracts in asset positions from counterparties, or their affiliates | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Fair Market Value of | At December 31, 2012, Athlon had committed 10% or greater (in terms of fair market value) of its oil derivative contracts in asset positions from the following counterparties: | ||||||||||||||||||||||||||||||||||||||||||
Oil Derivative | |||||||||||||||||||||||||||||||||||||||||||
Contracts | |||||||||||||||||||||||||||||||||||||||||||
Counterparty | Committed | Counterparty | Fair Market Value of | ||||||||||||||||||||||||||||||||||||||||
(in thousands) | Oil Derivative | ||||||||||||||||||||||||||||||||||||||||||
BNP Paribas | $ | 458 | Contracts | ||||||||||||||||||||||||||||||||||||||||
Committed | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
BNP Paribas | $ | 3,660 | |||||||||||||||||||||||||||||||||||||||||
Royal Bank of Canada | 711 | ||||||||||||||||||||||||||||||||||||||||||
Scotiabank | 617 | ||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of derivative instruments not designated as hedging instruments | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Oil | Commodity | Total | |||||||||||||||||||||||||||||||||||||||||
Balance Sheet | Commodity | Derivatives | Commodity | ||||||||||||||||||||||||||||||||||||||||
Location | Derivatives | Netting (a) | Derivatives | ||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
As of September 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||
Derivatives - current | $ | 162 | $ | (162 | ) | $ | — | ||||||||||||||||||||||||||||||||||||
Derivatives - noncurrent | 2,149 | (938 | ) | 1,211 | |||||||||||||||||||||||||||||||||||||||
Total assets | 2,311 | (1,100 | ) | 1,211 | |||||||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||
Derivatives - current | (10,347 | ) | 162 | (10,185 | ) | ||||||||||||||||||||||||||||||||||||||
Derivatives - noncurrent | (1,930 | ) | 938 | (992 | ) | ||||||||||||||||||||||||||||||||||||||
Total liabilities | (12,277 | ) | 1,100 | (11,177 | ) | ||||||||||||||||||||||||||||||||||||||
Net liabilities | $ | (9,966 | ) | $ | — | $ | (9,966 | ) | |||||||||||||||||||||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||
Derivatives - current | $ | 3,386 | $ | (1,140 | ) | $ | 2,246 | ||||||||||||||||||||||||||||||||||||
Derivatives - noncurrent | 3,265 | (411 | ) | 2,854 | |||||||||||||||||||||||||||||||||||||||
Total assets | 6,651 | (1,551 | ) | 5,100 | |||||||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||
Derivatives - current | (1,732 | ) | 1,140 | (592 | ) | ||||||||||||||||||||||||||||||||||||||
Derivatives - noncurrent | (930 | ) | 411 | (519 | ) | ||||||||||||||||||||||||||||||||||||||
Total liabilities | (2,662 | ) | 1,551 | (1,111 | ) | ||||||||||||||||||||||||||||||||||||||
Net assets | $ | 3,989 | $ | — | $ | 3,989 | |||||||||||||||||||||||||||||||||||||
(a) Represents counterparty netting under master netting agreements, which allow for netting of commodity derivative contracts. These derivative instruments are reflected net on the accompanying Consolidated Balance Sheets. | |||||||||||||||||||||||||||||||||||||||||||
Schedule of effect of derivative instruments not designated as hedges on accompanying consolidated statements of operation | ' | ' | |||||||||||||||||||||||||||||||||||||||||
The following table summarizes the effect of derivative instruments not designated as hedges on the accompanying Consolidated Statements of Operations for the periods indicated (in thousands): | |||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the effect of derivative instruments not designated as hedges on the accompanying Consolidated Statements of Operations for the periods indicated (in thousands): | |||||||||||||||||||||||||||||||||||||||||||
Amount of Loss (Gain) Recognized in Income | |||||||||||||||||||||||||||||||||||||||||||
Location of Loss (Gain) | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||||||
Derivatives Not Designated as Hedges | Recognized in Income | 2013 | 2012 | 2013 | 2012 | Amount of Loss | |||||||||||||||||||||||||||||||||||||
Commodity derivative contracts | Derivative fair value loss (gain) | $ | 27,037 | $ | 14,268 | $ | 21,331 | $ | (9,590 | ) | (Gain) Recognized | ||||||||||||||||||||||||||||||||
in Income | |||||||||||||||||||||||||||||||||||||||||||
Year ended | |||||||||||||||||||||||||||||||||||||||||||
Location of Loss (Gain) | December 31, | ||||||||||||||||||||||||||||||||||||||||||
Derivatives Not Designated as Hedges | Recognized in Income | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||||||
Commodity derivative contracts | Derivative fair value loss (gain) | $ | (9,293 | ) | $ | 7,959 | |||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities that accounted for at fair value on a recurring basis | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||||||||||||||||
Quoted Prices in | |||||||||||||||||||||||||||||||||||||||||||
Active Markets for | Significant Other | Significant | Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||||||||||||||||||||||
Identical Assets | Observable Inputs | Unobservable Inputs | Description | Asset (liability), net | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||||||||||||||||||||
Description | Asset (liability), net | (Level 1) | (Level 2) | (Level 3) | Active Markets for | Observable Inputs | Unobservable Inputs | ||||||||||||||||||||||||||||||||||||
(in thousands) | Identical Assets | (Level 2) | (Level 3) | ||||||||||||||||||||||||||||||||||||||||
As of September 30, 2013 | (Level 1) | ||||||||||||||||||||||||||||||||||||||||||
Oil derivative contracts - swaps | $ | (9,622 | ) | $ | — | $ | (9,622 | ) | $ | — | (in thousands) | ||||||||||||||||||||||||||||||||
Oil derivative contracts - basis differential swaps | (330 | ) | — | (330 | ) | — | As of December 31, 2012 | ||||||||||||||||||||||||||||||||||||
Oil derivative contracts - collars | (14 | ) | — | (14 | ) | — | Oil derivative contracts—swaps | $ | 4,069 | $ | — | $ | 4,069 | $ | — | ||||||||||||||||||||||||||||
Total | $ | (9,966 | ) | $ | — | $ | (9,966 | ) | $ | — | Oil derivative contracts—collars and puts | (80 | ) | — | (80 | ) | — | ||||||||||||||||||||||||||
As of December 31, 2012 | Total | $ | 3,989 | $ | — | $ | 3,989 | $ | — | ||||||||||||||||||||||||||||||||||
Oil derivative contracts - swaps | $ | 4,069 | $ | — | $ | 4,069 | $ | — | |||||||||||||||||||||||||||||||||||
Oil derivative contracts - collars | (80 | ) | — | (80 | ) | — | As of December 31, 2011 | ||||||||||||||||||||||||||||||||||||
Total | $ | 3,989 | $ | — | $ | 3,989 | $ | — | Oil derivative contracts—swaps | $ | (5,392 | ) | $ | — | $ | (5,392 | ) | $ | — | ||||||||||||||||||||||||
Oil derivative contracts—collars and puts | (567 | ) | — | — | (567 | ) | |||||||||||||||||||||||||||||||||||||
Total | $ | (5,959 | ) | $ | — | $ | (5,392 | ) | $ | (567 | ) | ||||||||||||||||||||||||||||||||
Asset_Retirement_Obligations_T
Asset Retirement Obligations (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||
Asset Retirement Obligations | ' | ' | |||||||||||
Summary of changes in asset retirement obligations | ' | ' | |||||||||||
The following table summarizes the changes in Athlon’s asset retirement obligations for the nine months ended September 30, 2013 (in thousands): | |||||||||||||
Balance at January 1 | $ | 5,049 | |||||||||||
Liabilities assumed in acquisitions | 335 | ||||||||||||
Liabilities incurred from new wells | 735 | Year Ended | |||||||||||
Liabilities settled | (108 | ) | December 31, | ||||||||||
Accretion of discount | 485 | 2012 | 2011 | ||||||||||
Revisions of previous estimates | 3 | (in thousands) | |||||||||||
Balance at September 30 | 6,499 | Balance at January 1 | $ | 3,704 | $ | — | |||||||
Less: current portion | 60 | Acquisition of properties | 60 | 3,282 | |||||||||
Asset retirement obligations - long-term | $ | 6,439 | Wells drilled | 815 | 166 | ||||||||
Accretion of discount | 478 | 344 | |||||||||||
Revisions of previous estimates | (8 | ) | — | ||||||||||
Plugging and abandonment costs incurred | — | (88 | ) | ||||||||||
Balance at December 31 | $ | 5,049 | $ | 3,704 | |||||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Long-Term Debt | ' | |||||||
Schedule of quarterly commitment fee on unused portion of the Holdings Credit Agreement and applicable margin for Eurodollar and base rate loans | ' | |||||||
Ratio of Outstanding Borrowings to Borrowing Base | Unused | Applicable | Applicable | |||||
Commitment Fee | Margin for | Margin for Base | ||||||
Eurodollar Loans | Rate Loans | |||||||
Less than or equal to .30 to 1 | 0.375 | % | 1.5 | % | 0.5 | % | ||
Greater than .30 to 1 but less than or equal to .60 to 1 | 0.375 | % | 1.75 | % | 0.75 | % | ||
Greater than .60 to 1 but less than or equal to .80 to 1 | 0.5 | % | 2 | % | 1 | % | ||
Greater than .80 to 1 but less than or equal to .90 to 1 | 0.5 | % | 2.25 | % | 1.25 | % | ||
Greater than .90 to 1 | 0.5 | % | 2.5 | % | 1.5 | % |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Earnings Per Share | ' | ' | ||||||||||||||||||||
Schedule of allocation of net income (loss) to common stockholders and earnings per share (EPS) computations | ' | ' | ||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
(in thousands, except per share amounts) | Year ended | |||||||||||||||||||||
Basic EPS | December 31, | |||||||||||||||||||||
Numerator: | 2012 | 2011 | ||||||||||||||||||||
Undistributed net income (loss) attributable to stockholders | $ | 2,482 | $ | (2,096 | ) | $ | 37,058 | $ | 42,508 | (in thousands, except | ||||||||||||
Participation rights of unvested RSUs in undistributed earnings | (6 | ) | — | (6 | ) | — | per share amounts) | |||||||||||||||
Basic undistributed net income (loss) attributable to stockholders | $ | 2,476 | $ | (2,096 | ) | $ | 37,052 | $ | 42,508 | Basic EPS | ||||||||||||
Denominator: | Numerator: | |||||||||||||||||||||
Basic weighted average shares outstanding | 76,637 | 66,340 | 69,810 | 66,340 | Basic undistributed net income (loss) attributable to stockholders | $ | 53,014 | $ | (1,129 | ) | ||||||||||||
Basic EPS attributable to stockholders | $ | 0.03 | $ | (0.03 | ) | $ | 0.53 | $ | 0.64 | |||||||||||||
Denominator: | ||||||||||||||||||||||
Diluted EPS | Basic weighted average shares outstanding | 66,340 | 66,340 | |||||||||||||||||||
Numerator: | ||||||||||||||||||||||
Undistributed net income (loss) attributable to stockholders | $ | 2,482 | $ | (2,096 | ) | $ | 37,058 | $ | 42,508 | Basic EPS attributable to stockholders | $ | 0.8 | $ | (0.02 | ) | |||||||
Participation rights of unvested RSUs in undistributed earnings | (6 | ) | — | (6 | ) | — | ||||||||||||||||
Effect of conversion of New Holdings Units to shares of Athlon’s common stock | (215 | ) | — | 616 | — | Diluted EPS | ||||||||||||||||
Diluted undistributed net income (loss) attributable to stockholders | $ | 2,261 | $ | (2,096 | ) | $ | 37,668 | $ | 42,508 | Numerator: | ||||||||||||
Denominator: | Diluted undistributed net income (loss) attributable to stockholders | $ | 53,014 | $ | (1,129 | ) | ||||||||||||||||
Basic weighted average shares outstanding | 76,637 | 66,340 | 69,810 | 66,340 | ||||||||||||||||||
Effect of conversion of New Holdings Units to shares of Athlon’s common stock (a) | 1,856 | — | 1,856 | 1,856 | Denominator: | |||||||||||||||||
Diluted weighted average shares outstanding | 78,493 | 66,340 | 71,666 | 68,196 | Basic weighted average shares outstanding | 66,340 | 66,340 | |||||||||||||||
Diluted EPS attributable to stockholders | $ | 0.03 | $ | (0.03 | ) | $ | 0.53 | $ | 0.62 | Effect of conversion of New Holdings Units to shares of Athlon's common stock(a) | 1,856 | — | ||||||||||
(a) For the three months ended September 30, 2012, 1,855,563 New Holdings Units were outstanding but excluded from the EPS calculations because their effect would have been antidilutive. | Diluted weighted average shares outstanding | 68,196 | 66,340 | |||||||||||||||||||
Diluted EPS attributable to stockholders | $ | 0.78 | $ | (0.02 | ) | |||||||||||||||||
(a) | ||||||||||||||||||||||
For 2011, 1,855,563 New Holdings Units were outstanding but excluded from the EPS calculations because their effect would have been antidilutive. | ||||||||||||||||||||||
Incentive_Stock_Plans_Tables
Incentive Stock Plans (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||
Incentive Stock Plans | ' | ' | |||||||||||||||||||
Summary of changes in unvested RSUs | ' | ' | |||||||||||||||||||
Weighted - | |||||||||||||||||||||
Average | |||||||||||||||||||||
Number of | Grant Date | Year Ended December 31, | |||||||||||||||||||
Shares | Fair Value | 2012 | 2011 | ||||||||||||||||||
Outstanding at January 1 | — | $ | — | Number of | Weighted- | Number of | Weighted- | ||||||||||||||
Granted | 623,913 | 32.21 | Class B | Average | Class B | Average | |||||||||||||||
Vested | — | — | Interests | Grant Date | Interests | Grant Date | |||||||||||||||
Forfeited | — | — | Fair Value | Fair Value | |||||||||||||||||
Outstanding at September 30 | 623,913 | 32.21 | Outstanding at beginning of period | 68,662 | $ | 15.93 | 82,153 | $ | — | ||||||||||||
Granted | 2,195 | 128.94 | 9,050 | 134.84 | |||||||||||||||||
Vested | (20,375 | ) | 11.32 | (19,046 | ) | 3.11 | |||||||||||||||
Forfeited | (270 | ) | 140.72 | (3,495 | ) | 19.13 | |||||||||||||||
Outstanding at end of year | 50,212 | 22.07 | 68,662 | 15.93 | |||||||||||||||||
Formation_of_the_Company_and_D1
Formation of the Company and Description of Business (Details) (USD $) | 0 Months Ended | 9 Months Ended | |
Aug. 07, 2013 | Sep. 30, 2013 | Apr. 26, 2013 | |
Formation of the Company and Description of Business | ' | ' | ' |
Tax impact of corporate reorganization | ' | ' | $73,200,000 |
Initial public offering | ' | ' | ' |
Shares of common stock issued in IPO | 15,789,474 | ' | ' |
Per share price (in dollars per share) | $20 | ' | ' |
Net proceeds from IPO, after deducting underwriting discounts and commissions and offering expenses (in dollars) | $295,600,000 | $296,044,000 | ' |
Holdings | ' | ' | ' |
Initial public offering | ' | ' | ' |
Number of common stock exchangeable against each unit | ' | 1 | ' |
Holdings | Class A limited partners | ' | ' | ' |
Initial public offering | ' | ' | ' |
Exchange Agreement Number of New Units Exchangeable Against Limited Partner Interest | 1,855,563 | ' | ' |
Basis_of_Presentation_Details
Basis of Presentation (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Aug. 07, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Noncontrolling interest | ' | ' | ' | ' | ' | ' | ' |
Noncontrolling interest | ' | $10,045 | ' | $10,045 | ' | ' | ' |
Net income (loss) attributable to noncontrolling interest | ' | -215 | ' | 616 | ' | ' | ' |
Effects of changes in Athlon's partnership interest in Holdings on Athlon's equity | ' | ' | ' | ' | ' | ' | ' |
Net income attributable to stockholders | ' | 2,482 | -2,096 | 37,058 | 42,508 | 53,014 | -1,129 |
Transfer from noncontrolling interest: | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock in public offering | 15,789,474 | ' | ' | ' | ' | ' | ' |
Athlon Holdings GP LLC | ' | ' | ' | ' | ' | ' | ' |
Noncontrolling interest | ' | ' | ' | ' | ' | ' | ' |
Ownership interest in general partner of Holdings | ' | 100.00% | ' | 100.00% | ' | ' | ' |
Holdings | ' | ' | ' | ' | ' | ' | ' |
Noncontrolling interest | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership interest of management and employees | 3.20% | 2.20% | ' | 2.20% | ' | ' | ' |
Number of common stock exchangeable against each unit | ' | ' | ' | 1 | ' | ' | ' |
Holdings | Athlon Holdings GP LLC | ' | ' | ' | ' | ' | ' | ' |
Effects of changes in Athlon's partnership interest in Holdings on Athlon's equity | ' | ' | ' | ' | ' | ' | ' |
Net income attributable to stockholders | ' | 2,482 | ' | 37,058 | ' | ' | ' |
Transfer from noncontrolling interest: | ' | ' | ' | ' | ' | ' | ' |
Increase in Athlon's paid-in capital for corporate reorganization | ' | ' | ' | 290,950 | ' | ' | ' |
Increase in Athlon's paid-in capital for issuance of 15,789,474 shares of common stock in initial public offering | ' | 295,473 | ' | 295,473 | ' | ' | ' |
Shares of common stock in public offering | ' | ' | ' | 15,789,474 | ' | ' | ' |
Net transfer from noncontrolling interest | ' | 295,473 | ' | 586,423 | ' | ' | ' |
Change from net income attributable to stockholders and transfers from (to) noncontrolling interest | ' | $297,955 | ' | $623,481 | ' | ' | ' |
Holdings | Class A limited partners | ' | ' | ' | ' | ' | ' | ' |
Noncontrolling interest | ' | ' | ' | ' | ' | ' | ' |
Exchange Agreement Number of New Units Exchangeable Against Limited Partner Interest | 1,855,563 | ' | ' | ' | ' | ' | ' |
Proved_Properties_Details
Proved Properties (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Proved Properties | ' | ' | ' |
Proved leasehold costs | $411,657 | $376,271 | $283,302 |
Wells and related equipment - Completed | 634,980 | 379,036 | 89,140 |
Wells and related equipment - In process | 38,244 | 33,264 | 26,763 |
Total proved properties | $1,084,881 | $788,571 | $399,205 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Level 1 input, USD $) | Sep. 30, 2013 |
In Millions, unless otherwise specified | |
Level 1 input | ' |
Fair value measurements | ' |
Senior notes | $515.60 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Open commodity derivative contracts | ' | ' |
Summary of open commodity derivative contracts | ' | ' |
Asset (Liability) Fair Market Value | $9,636 | $3,989 |
Open commodity derivative contracts | Oct. - Dec. 2013 | ' | ' |
Summary of open commodity derivative contracts | ' | ' |
Asset (Liability) Fair Market Value | -4,205 | ' |
Open commodity derivative contracts | 2014 | ' | ' |
Summary of open commodity derivative contracts | ' | ' |
Asset (Liability) Fair Market Value | -7,532 | ' |
Open commodity derivative contracts | 2015 | ' | ' |
Summary of open commodity derivative contracts | ' | ' |
Asset (Liability) Fair Market Value | 2,101 | ' |
Commodity derivative contracts with floor price | Oct. - Dec. 2013 | ' | ' |
Summary of open commodity derivative contracts | ' | ' |
Average Daily Volume | 150 | ' |
Weighted-Average Floor Price | 75 | ' |
Commodity derivative contracts with cap price | Oct. - Dec. 2013 | ' | ' |
Summary of open commodity derivative contracts | ' | ' |
Average Daily Volume | 150 | ' |
Weighted-Average Cap Price | 105.95 | ' |
Commodity derivative contracts with swap price | Oct. - Dec. 2013 | ' | ' |
Summary of open commodity derivative contracts | ' | ' |
Average Daily Volume | 7,000 | ' |
Weighted-Average Swap Price | 95.01 | ' |
Commodity derivative contracts with swap price | 2014 | ' | ' |
Summary of open commodity derivative contracts | ' | ' |
Average Daily Volume | 7,950 | 4,950 |
Weighted-Average Swap Price | 92.67 | 92.65 |
Commodity derivative contracts with swap price | 2015 | ' | ' |
Summary of open commodity derivative contracts | ' | ' |
Average Daily Volume | 1,300 | 800 |
Weighted-Average Swap Price | 93.18 | 94.86 |
Midland-Cushing basis differential swaps | Oct. - Dec. 2013 | ' | ' |
Summary of open commodity derivative contracts | ' | ' |
Fair value of derivative liability | $300 | ' |
Midland-Cushing basis differential swaps | Fourth quarter of 2013 | ' | ' |
Summary of open commodity derivative contracts | ' | ' |
Average Daily Volume | 5,000 | ' |
Weighted-Average Swap Price | 1.2 | ' |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 3) (Master netting agreements, BNP Paribas, USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Master netting agreements | BNP Paribas | ' | ' |
Counterparty risk | ' | ' |
Fair Market Value of Oil Derivative Contracts Committed | $458 | $3,660 |
Fair_Value_Measurements_Detail3
Fair Value Measurements (Details 4) (Commodity contracts, USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Assets | ' | ' | ' |
Total Commodity Derivatives | ' | $3,989 | ' |
Liabilities | ' | ' | ' |
Net assets (liabilities) | 9,636 | 3,989 | ' |
Derivative instruments not designated as hedging instruments | Oil | ' | ' | ' |
Assets | ' | ' | ' |
Oil Commodity Derivatives, assets | 2,311 | 6,651 | ' |
Commodity Derivatives Netting, assets | -1,100 | -1,551 | ' |
Total Commodity Derivatives | 1,211 | 5,100 | 2,503 |
Liabilities | ' | ' | ' |
Oil Commodity Derivatives, liabilities | -12,277 | -2,662 | ' |
Commodity Derivatives Netting, liabilities | 1,100 | 1,551 | ' |
Total Commodity Derivatives | -11,177 | -1,111 | -8,462 |
Net assets (liabilities) | -9,966 | 3,989 | ' |
Derivative instruments not designated as hedging instruments | Oil | Derivative assets - current | ' | ' | ' |
Assets | ' | ' | ' |
Oil Commodity Derivatives, assets | 162 | 3,386 | ' |
Commodity Derivatives Netting, assets | -162 | -1,140 | ' |
Total Commodity Derivatives | ' | 2,246 | ' |
Derivative instruments not designated as hedging instruments | Oil | Derivative assets - noncurrent | ' | ' | ' |
Assets | ' | ' | ' |
Oil Commodity Derivatives, assets | 2,149 | 3,265 | ' |
Commodity Derivatives Netting, assets | -938 | -411 | ' |
Total Commodity Derivatives | 1,211 | 2,854 | 2,503 |
Derivative instruments not designated as hedging instruments | Oil | Derivative liabilities - current | ' | ' | ' |
Liabilities | ' | ' | ' |
Oil Commodity Derivatives, liabilities | -10,347 | -1,732 | ' |
Commodity Derivatives Netting, liabilities | 162 | 1,140 | ' |
Total Commodity Derivatives | -10,185 | -592 | -5,908 |
Derivative instruments not designated as hedging instruments | Oil | Derivative liabilities - noncurrent | ' | ' | ' |
Liabilities | ' | ' | ' |
Oil Commodity Derivatives, liabilities | -1,930 | -930 | ' |
Commodity Derivatives Netting, liabilities | 938 | 411 | ' |
Total Commodity Derivatives | ($992) | ($519) | ($2,554) |
Fair_Value_Measurements_Detail4
Fair Value Measurements (Details 5) (Derivative instruments not designated as hedges, Commodity contracts, Derivative fair value loss (gain), USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivative instruments not designated as hedges | Commodity contracts | Derivative fair value loss (gain) | ' | ' | ' | ' | ' | ' |
Fair value measurements | ' | ' | ' | ' | ' | ' |
Amount of Loss (Gain) Recognized in Income | $27,037 | $14,268 | $21,331 | ($9,590) | ($9,293) | $7,959 |
Fair_Value_Measurements_Detail5
Fair Value Measurements (Details 6) (Commodity contracts, USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Fair Value Hierarchy | ' | ' | ' |
Increase (decrease) in net commodity derivative assets (liabilities) | ($136,000) | $100,000 | ($500,000) |
Recurring | Asset (Liability), net | Oil | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | -9,966,000 | 3,989,000 | -5,959,000 |
Recurring | Asset (Liability), net | Oil | Swaps | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | -9,622,000 | 4,069,000 | -5,392,000 |
Recurring | Asset (Liability), net | Oil | Basis differential swaps | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | -330,000 | ' | ' |
Recurring | Asset (Liability), net | Oil | Collars | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | -14,000 | -80,000 | ' |
Recurring | Significant Other Observable Inputs (Level 2) | Oil | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | -9,966,000 | 3,989,000 | -5,392,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Oil | Swaps | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | -9,622,000 | 4,069,000 | -5,392,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Oil | Basis differential swaps | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | -330,000 | ' | ' |
Recurring | Significant Other Observable Inputs (Level 2) | Oil | Collars | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | ($14,000) | ($80,000) | ' |
Asset_Retirement_Obligations_D
Asset Retirement Obligations (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Asset retirement obligations | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | $5,049 | ' | ' | ' |
Liabilities incurred from new wells | ' | ' | 735 | ' | 815 | 166 |
Liabilities assumed in acquisitions | ' | ' | 335 | ' | 60 | 3,282 |
Liabilities settled | ' | ' | -108 | ' | ' | -88 |
Accretion of discount | 174 | 123 | 485 | 343 | 478 | 344 |
Revisions of previous estimates | ' | ' | 3 | ' | -8 | ' |
Balance at the end of the period | 6,499 | ' | 6,499 | ' | 5,049 | ' |
Less: current portion | 60 | ' | 60 | ' | ' | ' |
Asset retirement obligations - long-term | $6,439 | ' | $6,439 | ' | $5,049 | $3,704 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 9 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 05, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Apr. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | 31-May-13 | Apr. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | ||
Applicable Margin for Eurodollar Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Maximum | Senior notes | Senior notes | Senior notes | Senior notes | Senior notes | Senior notes | Senior notes | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Former second lien term loan | ||||
Eurodollar rate | LIBOR | Base Rate | LIBOR | Prime rate | Federal funds rate | Eurodollar rate | LIBOR | LIBOR | Base Rate | Prime rate | Federal funds rate | Upon assets disposition triggering events | Prior to April 15, 2016 | Prior to April 15, 2016 | On or prior to July 15, 2014 | Maximum | Maximum | Applicable Margin for Eurodollar Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Less than or equal to .30 to 1 | Less than or equal to .30 to 1 | Less than or equal to .30 to 1 | Greater than .30 to 1 but less than or equal to .60 to 1 | Greater than .30 to 1 but less than or equal to .60 to 1 | Greater than .30 to 1 but less than or equal to .60 to 1 | Greater than .60 to 1 but less than or equal to .80 to 1 | Greater than .60 to 1 but less than or equal to .80 to 1 | Greater than .60 to 1 but less than or equal to .80 to 1 | Greater than .80 to 1 but less than or equal to .90 to 1 | Greater than .80 to 1 but less than or equal to .90 to 1 | Greater than .80 to 1 but less than or equal to .90 to 1 | Greater than .90 to 1 | Greater than .90 to 1 | Greater than .90 to 1 | Maximum | Maximum | Maximum | Maximum | Maximum | Minimum | Minimum | Minimum | |||||||||||
Redemption from proceeds of certain equity offerings | Redemption of debt instrument upon change of control | Prior to April 15, 2016 | Eurodollar rate | LIBOR | Eurodollar rate | LIBOR | Base Rate | Prime rate | Federal funds rate | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Less than or equal to .30 to 1 | Greater than .30 to 1 but less than or equal to .60 to 1 | Greater than .60 to 1 but less than or equal to .80 to 1 | Greater than .80 to 1 but less than or equal to .90 to 1 | Greater than .90 to 1 | Greater than .30 to 1 but less than or equal to .60 to 1 | Greater than .60 to 1 but less than or equal to .80 to 1 | Greater than .80 to 1 but less than or equal to .90 to 1 | |||||||||||||||||||||||||||||||
Redemption from proceeds of certain equity offerings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount of notes issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $125,000,000 | $500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.38% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distribution paid to Class A limited partners | 75,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fixed charge coverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of aggregate principal amount of notes that can be redeemed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption price of debt instrument (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 101.00% | 100.00% | 107.38% | 110.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write off of unamortized debt issuance costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,800,000 |
Maximum amount committed by lender | ' | 700,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000,000 | 1,000,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current borrowing base | ' | 275,000,000 | 245,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 320,000,000 | 320,000,000 | 320,000,000 | 267,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding borrowings | ' | 237,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding letters of credit | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ratio of Outstanding Borrowings to Borrowing Base | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.3 | 0.6 | 0.8 | 0.9 | 0.9 | 0.3 | 0.6 | 0.8 | ' |
Unused Commitment Fee (as a percent) | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.38% | ' | ' | 0.38% | ' | ' | 0.50% | ' | ' | 0.50% | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Applicable Margin (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | 1.00% | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | 0.50% | ' | 1.50% | 0.50% | ' | 1.75% | 0.75% | ' | 2.00% | 1.00% | ' | 2.25% | 1.25% | ' | 2.50% | 1.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable interest rate base | ' | ' | ' | 'Eurodollar rate | 'LIBOR | 'Base Rate | 'LIBOR | 'prime rate | 'Federal fund | 'Eurodollar rate | 'LIBOR | 'LIBOR | 'Base Rate | 'prime rate | 'Federal fund | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Eurodollar rate | 'LIBOR | 'Eurodollar rate | 'LIBOR | 'Base Rate | 'prime rate | 'Federal fund | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ratio of consolidated total debt to EBITDAX beginning with quarter ended June 30, 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.75 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ratio of consolidated total debt to EBITDAX beginning with quarter ended June 30, 2014 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum projected production that can be hedged (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 85.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period over which hedging limitation requirement of the projected production from proved reserve is required to be maintained | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '66 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 07, 2013 | Apr. 26, 2013 | Apr. 02, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Stockholders' Equity | ' | ' | ' | ' | ' |
Common stock issued at incorporation (in shares) | ' | ' | 1,000 | ' | ' |
Aggregate purchase price of common stock issued at incorporation (in dollars) | ' | ' | $10 | ' | $295,631,000 |
Common stock issued in connection with reorganization transaction to holders of Class A limited partner interest and Class B interests of certain holdings (in shares) | ' | 960,907 | ' | ' | ' |
Issue price of IPO (in dollars per share) | $20 | ' | ' | ' | ' |
Stock split ratio | 65.266 | ' | ' | ' | 65.266 |
Outstanding common stock shares prior to closing of IPO | 66,339,615 | ' | ' | ' | ' |
Shares of common stock issued in IPO | 15,789,474 | ' | ' | ' | ' |
Net proceeds from IPO, after deducting underwriting discounts and commissions and offering expenses (in dollars) | 295,600,000 | ' | ' | ' | 296,044,000 |
Stockholders' equity | ' | ' | ' | ' | ' |
Reclassification from "Retained earnings" to "Additional paid-in capital" | ' | ' | ' | 12,500,000 | ' |
Decrease in net income attributable to noncontrolling interest | ' | ' | ' | $400,000 | ' |
Holdings | ' | ' | ' | ' | ' |
Stockholders' equity | ' | ' | ' | ' | ' |
Percentage of ownership noncontrolling interest | 3.20% | ' | ' | 2.20% | 2.20% |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Aug. 07, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 30, 2013 |
Earnings Per Share | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding common stock prior to consummation of IPO (in shares) | ' | ' | ' | ' | ' | ' | ' | 960,907 |
Issue price of IPO (in dollars per share) | $20 | ' | ' | ' | ' | ' | ' | ' |
Stock split ratio | 65.266 | ' | ' | 65.266 | ' | ' | ' | ' |
Outstanding common stock shares prior to closing of IPO | 66,339,615 | ' | ' | ' | ' | ' | ' | ' |
Numerator: | ' | ' | ' | ' | ' | ' | ' | ' |
Undistributed net income (loss) attributable to stockholders | ' | $2,482 | ($2,096) | $37,058 | $42,508 | $53,014 | ($1,129) | ' |
Participation rights of unvested RSUs in undistributed earnings | ' | -6 | ' | -6 | ' | ' | ' | ' |
Basic undistributed net income (loss) attributable to stockholders | ' | 2,476 | -2,096 | 37,052 | 42,508 | 53,014 | -1,129 | ' |
Denominator: | ' | ' | ' | ' | ' | ' | ' | ' |
Basic weighted average shares outstanding | ' | 76,637,000 | 66,340,000 | 69,810,000 | 66,340,000 | 66,340,000 | 66,340,000 | ' |
Basic EPS attributable to stockholders (in dollars per share) | ' | $0.03 | ($0.03) | $0.53 | $0.64 | $0.80 | ($0.02) | ' |
Numerator: | ' | ' | ' | ' | ' | ' | ' | ' |
Undistributed net income (loss) attributable to stockholders | ' | 2,482 | -2,096 | 37,058 | 42,508 | 53,014 | -1,129 | ' |
Participation rights of unvested RSUs in undistributed earnings | ' | -6 | ' | -6 | ' | ' | ' | ' |
Effect of conversion of New Holdings Units to shares of Athlon's common stock | ' | -215 | ' | 616 | ' | ' | ' | ' |
Diluted undistributed net income (loss) attributable to stockholders | ' | $2,261 | ($2,096) | $37,668 | $42,508 | $53,014 | ($1,129) | ' |
Denominator: | ' | ' | ' | ' | ' | ' | ' | ' |
Basic weighted average shares outstanding | ' | 76,637,000 | 66,340,000 | 69,810,000 | 66,340,000 | 66,340,000 | 66,340,000 | ' |
Effect of conversion of New Holdings Units to shares of Athlon's common stock | ' | 1,856,000 | ' | 1,856,000 | 1,856,000 | 1,856,000 | ' | ' |
Diluted weighted average shares outstanding | ' | 78,493,000 | 66,340,000 | 71,666,000 | 68,196,000 | 68,196,000 | 66,340,000 | ' |
Diluted EPS attributable to stockholders (in dollars per share) | ' | $0.03 | ($0.03) | $0.53 | $0.62 | $0.78 | ($0.02) | ' |
Antidilutive New Holdings Units excluded from EPS calculations (in shares) | ' | ' | 1,855,563 | ' | ' | ' | 1,855,563 | ' |
Incentive_Stock_Plans_Details
Incentive Stock Plans (Details) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Aug. 07, 2013 | |
RSUs | 2013 Incentive Award Plan | 2013 Incentive Award Plan | Maximum | Maximum | Class B limited partners | Class B limited partners | Class B limited partners | Class B limited partners | Class B limited partners | Class B limited partners | Holdings | |||||
RSUs | 2013 Incentive Award Plan | 2013 Incentive Award Plan | Maximum | Minimum | ||||||||||||
Non-employee directors | ||||||||||||||||
Incentive stock plans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate shares of common stock available for issuance under the 2013 stock incentive plan | ' | ' | ' | ' | ' | 8,400,000 | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' |
Aggregate shares of common stock available for issuance under the 2013 stock incentive plan at January 1, 2014 under first condition | ' | ' | ' | ' | ' | ' | ' | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage increase to shares of common stock available for issuance under the 2013 stock incentive plan at January 1, 2014 under second condition | ' | ' | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Grant date fair value of awards | ' | ' | ' | ' | ' | ' | ' | ' | $700,000 | ' | ' | ' | ' | ' | ' | ' |
Remaining shares available for grant | ' | ' | ' | ' | ' | 7,776,087 | ' | ' | ' | ' | ' | 6,200 | ' | ' | ' | ' |
Non-cash equity-based compensation expense | 1,799,000 | 118,000 | 152,000 | 106,000 | ' | 492,000 | ' | ' | ' | 1,300,000 | 186,000 | 152,000 | 106,000 | ' | ' | 1,500,000 |
Capitalized non-cash equity-based compensation expense | ' | ' | 93,000 | ' | ' | 37,000 | ' | ' | ' | 421,000 | 68,000 | ' | ' | ' | ' | ' |
Vesting period of RSU's | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | '5 years | '4 years | ' |
Unvested RSUs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at beginning of period | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,212 | 68,662 | 68,662 | 82,153 | ' | ' | ' |
Granted (in shares) | ' | ' | ' | ' | ' | ' | 623,913 | ' | ' | ' | ' | 2,195 | 9,050 | ' | ' | ' |
Outstanding at ending of period | ' | ' | ' | ' | ' | ' | 623,913 | ' | ' | ' | ' | 50,212 | 68,662 | ' | ' | ' |
Weighted - Average Grant Date Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at beginning of period | ' | ' | ' | ' | ' | ' | ' | ' | ' | $22.07 | $15.93 | $15.93 | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | ' | ' | ' | ' | $32.21 | ' | ' | ' | ' | $128.94 | $134.84 | ' | ' | ' |
Outstanding at the end of the period | ' | ' | ' | ' | ' | ' | $32.21 | ' | ' | ' | ' | $22.07 | $15.93 | ' | ' | ' |
Additional disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unvested RSUs granted, vesting of which is dependent on passage of specified time and continued employment condition (in shares) | ' | ' | ' | ' | ' | ' | 396,413 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unvested RSUs granted, vesting of which is dependent on passage of specified time and continued employment and also on performance condition (in shares) | ' | ' | ' | ' | ' | ' | 227,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unvested RSUs subject to variable accounting (in shares) | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation cost related to unvested RSU's | ' | ' | ' | ' | ' | ' | $17,900,000 | ' | ' | ' | ' | $1,000,000 | ' | ' | ' | ' |
Weighted-average period for recognition of unrecognized compensation cost | ' | ' | ' | ' | ' | ' | '2 years 9 months 18 days | ' | ' | ' | ' | '3 years 8 months 12 days | ' | ' | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 26 Months Ended | 28 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 35 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Aug. 07, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Apollo | Apollo | Apollo | Apollo | Apollo Global Securities, LLC | Apollo Global Securities, LLC | Holdings | Holdings | Holdings | Holdings | Holdings | Holdings | |||
Apollo | Apollo | Apollo | Apollo funds | Other Class A limited partners | ||||||||||
Related party transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction fee as a percentage of total equity contributed | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' |
Transaction fee payable | ' | ' | ' | ' | ' | ' | ' | $800,000 | ' | ' | ' | $7,500,000 | ' | ' |
Consulting and advisory fee as percentage of EBITDAX under first condition | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | 1.00% | ' | ' | ' | ' |
Advisory fee per quarter under second condition | ' | ' | ' | ' | ' | 62,500 | ' | ' | ' | 62,500 | ' | ' | ' | ' |
Maximum advisory fee per calendar year | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | 500,000 | ' | ' | ' | ' |
Advisory fee | ' | ' | 493,000 | 411,000 | ' | ' | ' | ' | ' | 500,000 | 493,000 | ' | ' | ' |
Termination charges | 2,408,000 | 2,408,000 | ' | ' | ' | ' | ' | ' | ' | 2,400,000 | ' | ' | ' | ' |
Unreimbursed fee on termination of the service agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | 132,000 | ' | ' | ' | ' |
Proceeds from gross spread | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' |
Payment of discounts and commissions to underwriters in IPO | ' | ' | ' | ' | ' | ' | 900,000 | ' | ' | ' | ' | ' | ' | ' |
Distribution payment to Class A limited partners | ' | $75,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $73,000,000 | $2,000,000 |
Number of common stock exchangeable against each unit | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' |
Percentage of income tax benefits distributable to holders of New Holdings Units | ' | ' | ' | ' | ' | ' | ' | ' | 85.00% | ' | ' | ' | ' | ' |
Subsequent_Events_Details
Subsequent Events (Details) (Credit agreement, USD $) | Dec. 31, 2012 | Sep. 05, 2012 | Sep. 30, 2013 | 31-May-13 | Apr. 30, 2013 | Jan. 31, 2013 | Nov. 30, 2013 | Nov. 14, 2013 |
In Millions, unless otherwise specified | Holdings | Holdings | Holdings | Subsequent events | Subsequent events | Subsequent events | ||
Holdings | Holdings | |||||||
Subsequent events | ' | ' | ' | ' | ' | ' | ' | ' |
Current borrowing base | $275 | $245 | $320 | $320 | $267.50 | $295 | $525 | ' |
Outstanding letters of credit | $237 | ' | $0 | ' | ' | ' | ' | $0 |
CONSOLIDATED_BALANCE_SHEETS1
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Current assets: | ' | ' | ' |
Cash and cash equivalents | $196,888 | $8,871 | $32,030 |
Accounts receivable | 45,851 | 24,501 | 17,181 |
Derivatives | ' | 2,246 | ' |
Inventory | 972 | 1,022 | 751 |
Other | 1,205 | 2,486 | 1,574 |
Total current assets | 244,916 | 39,126 | 51,536 |
Properties and equipment, at cost - full cost method: | ' | ' | ' |
Proved properties, including wells and related equipment | 1,084,881 | 788,571 | 399,205 |
Unproved properties | 110,095 | 89,860 | 125,036 |
Accumulated depletion, depreciation, and amortization | -135,689 | -73,824 | -19,589 |
Properties and equipment, net | 1,059,287 | 804,607 | 504,652 |
Derivatives | 1,211 | 2,854 | 2,503 |
Debt issuance costs | 14,603 | 4,418 | 2,264 |
Other | 1,400 | 1,293 | 868 |
Total assets | 1,321,417 | 852,298 | 561,823 |
Accounts payable: | ' | ' | ' |
Trade | 2,338 | 3,170 | 3,214 |
Affiliate | 2 | 935 | 4,581 |
Accrued liabilities: | ' | ' | ' |
Lease operating | 5,391 | 3,858 | 2,568 |
Production, severance, and ad valorem taxes | 5,362 | 1,307 | 2,592 |
Development capital | 60,092 | 39,483 | 30,863 |
Derivatives | 10,185 | 592 | 5,908 |
Revenue payable | 19,550 | 9,330 | 5,710 |
Other | 2,021 | 2,700 | 2,036 |
Total current liabilities | 136,272 | 61,375 | 57,472 |
Derivatives | 992 | 519 | 2,554 |
Asset retirement obligations, net of current portion | 6,439 | 5,049 | 3,704 |
Long-term debt | 500,000 | 362,000 | 170,000 |
Other | 109 | 2,478 | 641 |
Total liabilities | 711,690 | 431,421 | 234,371 |
Commitments and contingencies | ' | ' | ' |
Equity | ' | 420,877 | 327,452 |
Total liabilities and equity | $1,321,417 | $852,298 | $561,823 |
CONSOLIDATED_STATEMENTS_OF_OPE1
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues: | ' | ' |
Oil | $128,081 | $51,193 |
Natural gas | 8,415 | 3,521 |
Natural gas liquids | 20,615 | 10,967 |
Total revenues | 157,111 | 65,681 |
Production: | ' | ' |
Lease operating | 25,503 | 13,328 |
Production, severance, and ad valorem taxes | 10,438 | 4,727 |
Depletion, depreciation, and amortization | 54,456 | 19,747 |
General and administrative | 9,678 | 7,724 |
Acquisition costs | 876 | 9,519 |
Derivative fair value loss (gain) | -9,293 | 7,959 |
Other operating | 562 | 404 |
Total expenses | 92,220 | 63,408 |
Operating income | 64,891 | 2,273 |
Interest expense | 9,949 | 2,932 |
Income (loss) before income taxes | 54,942 | -659 |
Income tax provision (benefit) | 1,928 | 470 |
Net income (loss) attributable to stockholders | $53,014 | ($1,129) |
Net income (loss) per common share: | ' | ' |
Basic (in dollars per share) | $0.80 | ($0.02) |
Diluted (in dollars per share) | $0.78 | ($0.02) |
Weighted average common shares outstanding: | ' | ' |
Basic (in shares) | 66,340 | 66,340 |
Diluted (in shares) | 68,196 | 66,340 |
CONSOLIDATED_STATEMENT_OF_CHAN1
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY. | ' | ' |
Balance | $327,452 | $24,999 |
Capital contributions from partners | 40,166 | 303,976 |
Equity-based compensation | 245 | 106 |
Undistributed net income (loss) attributable to stockholders | 53,014 | -1,129 |
Balance | $420,877 | $327,452 |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' |
Undistributed net income (loss) attributable to stockholders | $53,014 | ($1,129) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' |
Depletion, depreciation, and amortization | 54,456 | 19,747 |
Deferred taxes | 1,928 | 470 |
Non-cash derivative loss (gain) | -9,947 | 7,509 |
Equity-based compensation | 152 | 106 |
Other | 1,758 | 963 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ' | ' |
Accounts receivable | -7,320 | -16,963 |
Other current assets | -337 | -1,691 |
Other assets | ' | -16 |
Accounts payable | -2,140 | 537 |
Revenue payable | 3,620 | 5,710 |
Derivatives | ' | -1,950 |
Other current liabilities | 118 | 5,579 |
Net cash provided by operating activities | 95,302 | 18,872 |
Cash flows from investing activities: | ' | ' |
Acquisitions of oil and natural gas properties | -80,602 | -414,759 |
Development of oil and natural gas properties | -266,235 | -57,457 |
Monetization of put options | ' | 7,625 |
Other | -422 | -884 |
Net cash used in investing activities | -347,259 | -465,475 |
Cash flows from financing activities: | ' | ' |
Proceeds from long-term debt, net of issuance costs | 519,672 | 198,651 |
Payments on long-term debt | -331,000 | -31,000 |
Capital contributions from partners | 40,166 | 303,976 |
Other | -40 | ' |
Net cash provided by financing activities | 228,798 | 471,627 |
Increase (decrease) in cash and cash equivalents | -23,159 | 25,024 |
Cash and cash equivalents, beginning of period | 32,030 | 7,006 |
Cash and cash equivalents, end of period | $8,871 | $32,030 |
Formation_of_the_Company_and_D2
Formation of the Company and Description of Business | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Formation of the Company and Description of Business | ' | ' |
Formation of the Company and Description of Business | ' | ' |
Note 1. Formation of the Company and Description of Business | ||
Note 1. Formation of the Company and Description of Business | ||
Athlon Energy Inc. (together with its subsidiaries, “Athlon”), a Delaware corporation, was formed on April 1, 2013 and is an independent exploration and production company focused on the acquisition, development, and exploitation of unconventional oil and liquids-rich natural gas reserves in the Permian Basin. | ||
Athlon Energy Inc. (together with its subsidiaries, "Athlon"), a Delaware corporation, was formed on April 1, 2013 and is an independent exploration and production company focused on the acquisition, development, and exploitation of unconventional oil and liquids-rich natural gas reserves in the Permian Basin. | ||
On April 26, 2013, Athlon Holdings LP (together with its subsidiaries, “Holdings”), a Delaware limited partnership, underwent a corporate reorganization and as a result, Holdings became a majority-owned subsidiary of Athlon. Holdings is considered Athlon’s accounting predecessor. Athlon operates and controls all of the business and affairs of Holdings and consolidates its financial results. Holdings is not subject to federal income taxes. On the date of the corporate reorganization, a corresponding “first day” net deferred tax liability of approximately $73.2 million was recorded for differences between the tax and book basis of Athlon’s assets and liabilities. The offset of the deferred tax liability was recorded to additional paid-in capital. | ||
On April 26, 2013, Athlon Holdings LP (together with its subsidiaries, "Holdings"), a Delaware limited partnership, underwent a corporate reorganization and as a result, Holdings became a majority-owned subsidiary of Athlon. Holdings is considered Athlon's accounting predecessor. Athlon operates and controls all of the business and affairs of Holdings and consolidates its financial results. These Consolidated Financial Statements represent the financial position, results of operations, and cash flows of Holdings. | ||
Prior to the corporate reorganization, Holdings was a party to a limited partnership agreement with its management group and Apollo Athlon Holdings, LP (“Apollo”), which is an affiliate of Apollo Global Management, LLC. Prior to the corporate reorganization, Apollo Investment Fund VII, L.P. and its parallel funds (the “Apollo Funds”), members of Holdings’ management team, and certain employees owned all of the Class A limited partner interests in Holdings and members of Holdings’ management team and certain employees owned all of the Class B limited partner interests in Holdings. | ||
Prior to the corporate reorganization, Holdings was a party to a limited partnership agreement with its management group and Apollo Athlon Holdings, LP ("Apollo"), which is an affiliate of Apollo Global Management, LLC. Prior to the corporate reorganization, Apollo Investment Fund VII, L.P. and its parallel funds (the "Apollo Funds"), members of Holdings' management team, and certain employees owned all of the Class A limited partner interests in Holdings and members of Holdings' management team and certain employees owned all of the Class B limited partner interests in Holdings. | ||
In the corporate reorganization, the Apollo Funds entered into a number of distribution and contribution transactions pursuant to which the Apollo Funds exchanged their Class A limited partner interests in Holdings for common stock of Athlon. The remaining holders of Class A limited partner interests in Holdings have not exchanged their interests in the reorganization transactions. In addition, the holders of the Class B limited partner interests in Holdings exchanged their interests for common stock of Athlon subject to the same conditions and vesting terms. | ||
In the corporate reorganization, the Apollo Funds entered into a number of distribution and contribution transactions pursuant to which the Apollo Funds exchanged their Class A limited partner interests in Holdings for common stock of Athlon. The remaining holders of Class A limited partner interests in Holdings did not exchange their interests in the reorganization transactions. In addition, the holders of the Class B limited partner interests in Holdings exchanged their interests for common stock of Athlon subject to the same conditions and vesting terms. | ||
Initial Public Offering | ||
Holdings was formed on July 22, 2011, and is the holding company for Athlon Energy LP (together with its operating subsidiary, Athlon Energy Operating LLC, "Athlon SG"), a Delaware limited partnership, which was formed on August 5, 2010, and Athlon FE Energy LP (together with its operating subsidiary, Athlon FE Operating LLC, "Athlon FE"), a Delaware limited partnership, which was formed on July 22, 2011. Athlon Holdings LLC serves as the general partner to Holdings with no obligations to make capital contributions and no rights to distributions. Holdings owns all of Athlon SG's and Athlon FE's general partner and limited partner units. | ||
On August 7, 2013, Athlon completed its initial public offering (“IPO”) of 15,789,474 shares of its common stock at $20.00 per share and received net proceeds of approximately $295.6 million, after deducting underwriting discounts and commissions and offering expenses. Upon closing of the IPO, the limited partnership agreement of Holdings was amended and restated to, among other things, modify Holdings’ capital structure by replacing its different classes of interests with a single new class of units, the “New Holdings Units”. The members of Holdings’ management team and certain employees that held Class A limited partner interests now own 1,855,563 New Holdings Units and entered into an exchange agreement under which (subject to the terms of the exchange agreement) they have the right to exchange their New Holdings Units for shares of common stock of Athlon on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. All other New Holdings Units are held by Athlon. Athlon used the net proceeds from the IPO to purchase New Holdings Units from Holdings. Holdings used the proceeds it received as a result of Athlon’s purchase of New Holdings Units (i) to reduce outstanding borrowings under its credit agreement, (ii) to provide additional liquidity for use in its drilling program, and (iii) for general corporate purposes, including potential acquisitions. | ||
On August 23, 2010, Athlon SG entered into a limited partnership agreement with its management group and Apollo. Apollo has a controlling influence over Holdings. On July 22, 2011, the partnership agreement was amended and restated resulting in the formation of Holdings and Athlon FE. Upon formation, Holdings became the holding company of Athlon SG and Athlon FE. The amended and restated partnership agreement required all of Athlon SG's equity contributions to be contributed to Holdings. The holders of all Class A and Class B limited partner units in Athlon SG contributed these units to Holdings in exchange for equivalent units of Holdings. As the amendment of the partnership agreement constituted a reorganization of entities under common control, the operations of Athlon SG are presented as if Holdings existed and owned Athlon SG prior to July 22, 2011 and the assets and liabilities of Athlon SG are reflected at their carrying amounts. Please read "Note 7. Equity" and "Note 8. Employee Benefit Plans" for additional discussion. | ||
Initial Public Offering | ||
On August 7, 2013, Athlon completed its initial public offering ("IPO") of 15,789,474 shares of its common stock at $20.00 per share and received net proceeds of approximately $295.6 million, after deducting underwriting discounts and commissions and offering expenses. Upon closing of the IPO, the limited partnership agreement of Holdings was amended and restated to, among other things, modify Holdings' capital structure by replacing its different classes of interests with a single new class of units, the "New Holdings Units". The members of Holdings' management team and certain employees that held Class A limited partner interests now own 1,855,563 New Holdings Units and entered into an exchange agreement under which (subject to the terms of the exchange agreement) they have the right to exchange their New Holdings Units for shares of common stock of Athlon on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. All other New Holdings Units are held by Athlon. | ||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Basis of Presentation | ' | ' | ||||||||||||||||||||
Summary of Significant Accounting Policies | ' | ' | ||||||||||||||||||||
Note 2. Basis of Presentation | ||||||||||||||||||||||
Note 2. Summary of Significant Accounting Policies | ||||||||||||||||||||||
Athlon’s consolidated financial statements include the accounts of its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | ||||||||||||||||||||||
Principles of Consolidation | ||||||||||||||||||||||
In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly, in all material respects, Athlon’s financial position as of September 30, 2013, results of operations for the three and nine months ended September 30, 2013 and 2012, and cash flows for the nine months ended September 30, 2013 and 2012. All adjustments are of a normal recurring nature. These interim results are not necessarily indicative of results for an entire year. | ||||||||||||||||||||||
Athlon's consolidated financial statements include the accounts of its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | ||||||||||||||||||||||
Certain amounts and disclosures have been condensed and omitted from the unaudited consolidated financial statements pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Therefore, these unaudited consolidated financial statements should be read in conjunction with Holdings’ audited consolidated financial statements and related notes thereto included in Athlon’s final prospectus dated August 1, 2013 and filed with the SEC pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended, on August 5, 2013. | ||||||||||||||||||||||
Use of Estimates | ||||||||||||||||||||||
Income Taxes | ||||||||||||||||||||||
Preparing financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities in the consolidated financial statements. Although management believes these estimates are reasonable, actual results could differ materially from those estimates. | ||||||||||||||||||||||
Athlon accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. | ||||||||||||||||||||||
Estimates made in preparing these consolidated financial statements include, among other things, estimates of the proved oil and natural gas reserve volumes used in calculating depletion, depreciation, and amortization ("DD&A") expense; operating costs accrued; volumes and prices for revenues accrued; valuation of derivative instruments; and the timing and amount of future abandonment costs used in calculating asset retirement obligations. Changes in the assumptions used could have a significant impact on results in future periods. | ||||||||||||||||||||||
Athlon periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets, including net operating losses. In making this determination, Athlon considers all available positive and negative evidence and makes certain assumptions. Athlon considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years. Athlon believes it is more likely than not that certain net operating losses can be carried forward and utilized. | ||||||||||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||||||||
In April 2013, Athlon had a corporate reorganization to effectuate its IPO. Holdings, Athlon’s accounting predecessor, is a partnership not subject to federal income tax. Pursuant to the steps of the corporate reorganization, certain Class A limited partners and the Class B limited partners of Holdings exchanged their interests for shares of Athlon’s common stock. Athlon’s operations are now subject to federal income tax. The tax implications of the corporate reorganization and the tax impact of the conversion to operating as a taxable entity have been reflected in the accompanying consolidated financial statements. | ||||||||||||||||||||||
Cash and cash equivalents include demand deposits and funds invested in highly liquid instruments with original maturities of three months or less and typically exceed federally insured limits. | ||||||||||||||||||||||
Noncontrolling Interest | ||||||||||||||||||||||
The following table sets forth supplemental disclosures of cash flow information for the periods indicated: | ||||||||||||||||||||||
As of September 30, 2013, management and employees owned approximately 2.2% of Holdings. Athlon owns 100% of Athlon Holdings GP LLC, which is Holdings’ general partner. Considering the presumption of control, Athlon has fully consolidated the financial position, results of operations, and cash flows of Holdings. | ||||||||||||||||||||||
As presented in the accompanying Consolidated Balance Sheets, “Noncontrolling interest” as of September 30, 2013 of approximately $10.0 million represents management and employees’ 1,855,563 New Holdings Units that are exchangeable for shares of Athlon’s common stock on a one-for-one basis. As presented in the accompanying Consolidated Statements of Operations, “Net income (loss) attributable to noncontrolling interest” for the three and nine months ended September 30, 2013 of approximately $(0.2) million and $0.6 million, respectively, represents the net income of Holdings attributable to management and employees since April 26, 2013. | Year ended | |||||||||||||||||||||
December 31, | ||||||||||||||||||||||
The following table summarizes the effects of changes in Athlon’s partnership interest in Holdings on Athlon’s equity for the periods indicated: | 2012 | 2011 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Three | Nine months | Cash paid during the period for: | ||||||||||||||||||||
months | ended | Interest | $ | 8,326 | $ | 2,395 | ||||||||||||||||
ended | September | Income taxes | — | — | ||||||||||||||||||
September | 30, 2013 | |||||||||||||||||||||
30, 2013 | Accounts Receivable | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Net income attributable to stockholders | $ | 2,482 | $ | 37,058 | Accounts receivable, which are primarily from the sale of oil, natural gas, and natural gas liquids ("NGLs"), is accrued based on estimates of the sales and prices Athlon believes it will receive. Athlon routinely reviews outstanding balances, assesses the financial strength of its customers, and records a reserve for amounts not expected to be fully recovered. Actual balances are not applied against the reserve until substantially all collection efforts have been exhausted. At December 31, 2012 and 2011, Athlon had no allowance for doubtful accounts. | |||||||||||||||||
Transfer from noncontrolling interest: | ||||||||||||||||||||||
Increase in Athlon’s paid-in capital for corporate reorganization | — | 290,950 | Inventory | |||||||||||||||||||
Increase in Athlon’s paid-in capital for issuance of 15,789,474 shares of common stock in initial public offering | 295,473 | 295,473 | ||||||||||||||||||||
Net transfer from noncontrolling interest | 295,473 | 586,423 | Inventory includes materials and supplies that Athlon intends to deploy to various development activities and oil in tanks at the lease, both of which are stated at the lower of cost (determined on an average basis) or market. Oil in tanks at the lease is carried at an amount equal to its costs to produce. Inventory consisted of the following as of the dates indicated: | |||||||||||||||||||
Change from net income attributable to stockholders and transfers from (to) noncontrolling interest | $ | 297,955 | $ | 623,481 | ||||||||||||||||||
New Accounting Pronouncements | December 31, | |||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||
In December 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2011-11, “Disclosures about Offsetting Assets and Liabilities” and in January 2013 issued ASU 2013-01, “Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities”. These ASUs created new disclosure requirements regarding the nature of an entity’s rights of setoff and related arrangements associated with its derivative instruments, repurchase agreements, and securities lending transactions. Certain disclosures of the amounts of certain instruments subject to enforceable master netting arrangements are required, irrespective of whether the entity has elected to offset those instruments in the statement of financial position. These ASUs were effective retrospectively for annual reporting periods beginning on or after January 1, 2013. The adoption of these ASUs did not impact Athlon’s financial position, results of operations, or liquidity. | (in thousands) | |||||||||||||||||||||
Materials and supplies | $ | 670 | $ | 371 | ||||||||||||||||||
No other new accounting pronouncements issued or effective from January 1, 2013 through the date of this Report, had or are expected to have a material impact on Athlon’s unaudited consolidated financial statements. | Oil inventory | 352 | 380 | |||||||||||||||||||
Total inventory | $ | 1,022 | $ | 751 | ||||||||||||||||||
Oil and Natural Gas Properties | ||||||||||||||||||||||
Athlon applies the provisions of the "Extractive Activities—Oil and Gas" topic of the Financial Accounting Standards Board's (the "FASB") Accounting Standards Codification (the "ASC"). Athlon uses the full cost method of accounting for its oil and natural gas properties. Under this method, costs directly associated with the acquisition, exploration, and development of reserves are capitalized into a full cost pool. Capitalized costs are amortized using a unit-of-production method. Under this method, the provision for DD&A is computed at the end of each period by multiplying total production for the period by a depletion rate. The depletion rate is determined by dividing the total unamortized cost base plus future development costs by net equivalent proved reserves at the beginning of the period. | ||||||||||||||||||||||
Costs associated with unproved properties are excluded from the amortizable cost base until a determination has been made as to the existence of proved reserves. Unproved properties are reviewed at the end of each quarter to determine whether the costs incurred should be reclassified to the full cost pool and, thereby, subjected to amortization. The costs associated with unproved properties primarily consist of acquisition and leasehold costs as well as development costs for wells in progress for which a determination of the existence of proved reserves has not been made. These costs are transferred to the amortization base once a determination is made whether or not proved reserves can be assigned to the property, upon impairment of a lease, or immediately upon determination that the well is unsuccessful. Costs of seismic data that cannot be directly associated to specific unproved properties are included in the full cost pool as incurred, otherwise, they are allocated to various unproved leaseholds and transferred to the amortization base with the associated leasehold costs on a specific project basis. | ||||||||||||||||||||||
Unevaluated properties are assessed periodically, at least annually, for possible impairment. Properties are assessed on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of various factors, including, but not limited to: intent to drill, remaining lease term, geological and geophysical evaluations, drilling results, and economic viability of development if proved reserves are assigned. During any period in which these factors indicate impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and become subject to amortization. | ||||||||||||||||||||||
Under the full cost method of accounting, total capitalized costs of oil and natural gas properties, net of accumulated depletion, less related deferred income taxes may not exceed an amount equal to the present value of future net revenues from proved reserves, discounted at 10% per annum, plus the lower of cost or fair value of unevaluated properties, plus estimated salvage value, less the related tax effects (the "ceiling limitation"). A ceiling limitation is calculated at the end of each quarter. If total capitalized costs, net of accumulated DD&A, less related deferred income taxes are greater than the ceiling limitation, a write-down or impairment of the full cost pool is required. A write-down of the carrying value of the full cost pool is a non-cash charge that reduces earnings and impacts partners' equity in the period of occurrence and typically results in lower DD&A expense in future periods. Once incurred, a write-down cannot be reversed at a later date. | ||||||||||||||||||||||
The ceiling limitation calculation is prepared using the 12-month first-day-of-the-month oil and natural gas average prices, as adjusted for basis or location differentials, held constant over the life of the reserves ("net wellhead prices"). If applicable, these net wellhead prices would be further adjusted to include the effects of any fixed price arrangements for the sale of oil and natural gas. Athlon uses commodity derivative contracts to mitigate the risk against the volatility of oil and natural gas prices. Commodity derivative contracts that qualify and are designated as cash flow hedges are included in estimated future cash flows. Athlon has not designated any of its commodity derivative contracts as cash flow hedges and has therefore not included its commodity derivative contracts in estimating future cash flows. The future cash outflows associated with future development or abandonment of wells are included in the computation of the discounted present value of future net revenues for purposes of the ceiling limitation calculation. | ||||||||||||||||||||||
Sales and abandonments of oil and natural gas properties being amortized are accounted for as adjustments to the full cost pool, with no gain or loss recognized, unless the adjustments would significantly alter the relationship between capitalized costs and proved reserves. A significant alteration would not ordinarily be expected to occur upon the sale of reserves involving less than 25% of the reserve quantities of a cost center. | ||||||||||||||||||||||
Natural gas volumes are converted to barrels of oil equivalent ("BOE") at the rate of six thousand cubic feet ("Mcf") of natural gas to one barrel ("Bbl") of oil. This convention is not an equivalent price basis and there may be a large difference in value between an equivalent volume of oil versus an equivalent volume of natural gas. | ||||||||||||||||||||||
Independent petroleum engineers estimate Athlon's proved reserves annually on December 31. This results in a new DD&A rate which Athlon uses for the preceding fourth quarter after adjusting for fourth quarter production. Athlon internally estimates reserve additions and reclassifications of reserves from unproved to proved at the end of the first, second, and third quarters for use in determining a DD&A rate for the respective quarter. | ||||||||||||||||||||||
Athlon capitalizes interest on expenditures made in connection with exploration and development projects that are not subject to current amortization. Interest is capitalized only for the period that activities are in progress to bring these projects to their intended use. Capitalized interest cannot exceed gross interest expense. During 2012, Athlon capitalized approximately $0.2 million of interest expense. During 2011, Athlon did not capitalize any interest expense. | ||||||||||||||||||||||
Amounts shown in the accompanying Consolidated Balance Sheets as "Proved properties, including wells and related equipment" consisted of the following as of the date indicated: | ||||||||||||||||||||||
December 31, | ||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Proved leasehold costs | $ | 376,271 | $ | 283,302 | ||||||||||||||||||
Wells and related equipment—completed | 379,036 | 89,140 | ||||||||||||||||||||
Wells and related equipment—in process | 33,264 | 26,763 | ||||||||||||||||||||
Total proved properties | $ | 788,571 | $ | 399,205 | ||||||||||||||||||
Asset Retirement Obligations | ||||||||||||||||||||||
Athlon applies the provisions of the "Asset Retirement and Environmental Obligations" topic of the ASC. Athlon has obligations as a result of lease agreements and enacted laws to remove its equipment and restore land at the end of production operations. These asset retirement obligations are primarily associated with plugging and abandoning wells and land remediation. At the time a well is drilled or acquired, Athlon records a separate liability for the estimated fair value of its asset retirement obligations, with an offsetting increase to the related oil and natural gas asset representing asset retirement costs in the accompanying Consolidated Balance Sheets. The cost of the related oil and natural gas asset, including the asset retirement cost, is included in Athlon's full cost pool. The estimated fair value of an asset retirement obligation is the present value of the expected future cash outflows required to satisfy the asset retirement obligations discounted at Athlon's credit-adjusted, risk-free interest rate at the time the liability is incurred. Accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. | ||||||||||||||||||||||
Inherent to the present-value calculation are numerous estimates, assumptions, and judgments, including, but not limited to: the ultimate settlement amounts, inflation factors, credit-adjusted risk-free rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions affect the present value of the abandonment liability, Athlon makes corresponding adjustments to both the asset retirement obligation and the related oil and natural gas property asset balance. These revisions result in prospective changes to DD&A expense and accretion of the discounted abandonment liability. Please read "Note 5. Asset Retirement Obligations" for additional information. | ||||||||||||||||||||||
Segment Reporting | ||||||||||||||||||||||
Athlon operates in only one industry: the oil and natural gas exploration and production industry in the United States. All revenues are derived from customers located in the United States. | ||||||||||||||||||||||
Major Customers/Concentration of Credit Risk | ||||||||||||||||||||||
The following purchasers accounted for 10% or greater of the sales of production for the periods indicated and the corresponding outstanding accounts receivable balance as of the dates indicated: | ||||||||||||||||||||||
Percentage of | Outstanding | |||||||||||||||||||||
Total Revenues | Accounts | |||||||||||||||||||||
for the Year | Receivable Balance | |||||||||||||||||||||
Ended | as of December 31, | |||||||||||||||||||||
December 31, | ||||||||||||||||||||||
Purchaser | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Occidental Petroleum Corporation | 29 | % | 58 | % | $ | 4,456 | $ | 5,863 | ||||||||||||||
DCP Midstream | 12 | % | 13 | % | 2,604 | 2,716 | ||||||||||||||||
Pecos Gathering & Marketing | 43 | % | 13 | % | 9,348 | 3,756 | ||||||||||||||||
Income Taxes | ||||||||||||||||||||||
Prior to its corporate reorganization, Athlon was treated as a partnership for federal and state income tax purposes with each partner being separately taxed on their share of Athlon's taxable income. Therefore, no provision for current or deferred federal income taxes has been provided for in the accompanying Consolidated Financial Statements. However, Athlon's operations located in Texas are subject to an entity-level tax, the Texas margin tax, at a statutory rate of up to 0.7% of income that is apportioned to Texas. Deferred tax assets and liabilities are recognized for future Texas margin tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective Texas margin tax bases. | ||||||||||||||||||||||
Net income (loss) for financial statement purposes may differ significantly from taxable income reportable to partners as a result of differences between the tax bases and financial reporting bases of assets and liabilities and the taxable income allocation requirements under the partnership agreement. In addition, individual partners have different investment bases depending upon the timing and price of acquisition of their partnership units, and each partner's tax accounting, which is partially dependent upon the partner's tax position, differs from the accounting followed in the accompanying Consolidated Financial Statements. As a result, the aggregate difference in the basis of net assets for financial and tax reporting purposes cannot be readily determined as Athlon does not have access to information about each partner's tax attributes in Holdings. | ||||||||||||||||||||||
Athlon performs a periodic evaluation of tax positions to review the appropriate recognition threshold for each tax position recognized in its consolidated financial statements. As of December 31, 2012 and 2011, all of Athlon's tax positions met the "more-likely-than-not" threshold. As a result, no additional tax expense, interest, or penalties have been accrued. | ||||||||||||||||||||||
Revenue Recognition | ||||||||||||||||||||||
Revenues from the sale of oil, natural gas and NGLs are recognized when the production is sold, net of any royalty interest. Because final settlement of Athlon's hydrocarbon sales can take up to two months, the expected sales volumes and prices for those properties are estimated and accrued using information available at the time the revenue is recorded. Natural gas revenues are recorded using the sales method of accounting whereby revenue is recognized based on actual sales of natural gas rather than Athlon's proportionate share of natural gas production. If Athlon's overproduced imbalance position (i.e., Athlon has cumulatively been over-allocated production) is greater than its share of remaining reserves, a liability would be recorded for the excess at period-end prices unless a different price is specified in the contract, in which case that price is used. At December 31, 2012 and 2011, Athlon did not have any natural gas imbalances. Revenue is not recognized for oil production in tanks, but the production is recorded as a current asset based on the cost to produce and included in "Inventory" in the accompanying Consolidated Balance Sheets. Transportation expenses are included in operating expenses and are not material. | ||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||
Athlon uses various financial instruments for non-trading purposes to manage and reduce price volatility and other market risks associated with its oil production. These arrangements are structured to reduce Athlon's exposure to commodity price decreases, but they can also limit the benefit Athlon might otherwise receive from commodity price increases. Athlon's risk management activity is generally accomplished through over-the-counter commodity derivative contracts with large financial institutions, most of which are lenders underwriting Athlon's revolving credit agreement. | ||||||||||||||||||||||
Athlon applies the provisions of the "Derivatives and Hedging" topic of the ASC, which requires each derivative instrument to be recorded in the accompanying Consolidated Balance Sheets at fair value. If a derivative has not been designated as a hedge or does not otherwise qualify for hedge accounting, it must be adjusted to fair value through earnings. Athlon elected not to designate its current portfolio of commodity derivative contracts as hedges. Therefore, changes in fair value of these derivative instruments are recognized in earnings and included in "Derivative fair value loss (gain)" in the accompanying Consolidated Statements of Operations. | ||||||||||||||||||||||
Athlon enters into commodity derivative contracts for the purpose of economically hedging the price of its anticipated oil production even though Athlon does not designate the derivatives as hedges for accounting purposes. Athlon classifies cash flows related to derivative contracts based on the nature and purpose of the derivative. As the derivative cash flows are considered an integral part of Athlon's oil and natural gas operations, they are classified as cash flows from operating activities in the accompanying Consolidated Statements of Cash Flows. During 2011 and 2012, Athlon entered into commodity derivative contracts all of which were for the purpose of economically hedging its anticipated oil production. | ||||||||||||||||||||||
Cash flows relating to commodity derivative contracts that were entered into prior to Athlon commencing oil and natural gas operations in January 2011 are classified as investing activities in the accompanying Consolidated Statements of Cash Flows. | ||||||||||||||||||||||
New Accounting Pronouncements | ||||||||||||||||||||||
In May 2011, the FASB issued Accounting Standards Update ("ASU") 2011-04, "Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs". ASU 2011-04 amended ASC 820 to converge the fair value measurement guidance in GAAP and International Financial Reporting Standards. Certain of the amendments clarified the application of existing fair value measurement requirements, while other amendments changed a particular principle in ASC 820. In addition, ASU 2011-04 required additional fair value disclosures. The amendments were effective for annual periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on Athlon's financial position, results of operations, or liquidity. | ||||||||||||||||||||||
In December 2011, the FASB issued ASU 2011-11, "Disclosures about Offsetting Assets and Liabilities" and in January 2013 issued ASU 2013-01, "Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities". These ASUs create new disclosure requirements regarding the nature of an entity's rights of setoff and related arrangements associated with its derivative instruments, repurchase agreements, and securities lending transactions. Certain disclosures of the amounts of certain instruments subject to enforceable master netting arrangements would be required, irrespective of whether the entity has elected to offset those instruments in the statement of financial position. These ASUs are effective retrospectively for annual reporting periods beginning on or after January 1, 2013. The adoption of these ASUs will not impact Athlon's financial position, results of operations, or liquidity. | ||||||||||||||||||||||
No other new accounting pronouncements issued or effective during 2012, or in 2013 through the date of this report, had or are expected to have a material impact on Athlon's consolidated financial statements. | ||||||||||||||||||||||
Acquisitions
Acquisitions | 12 Months Ended | ||||
Dec. 31, 2012 | |||||
Acquisitions | ' | ||||
Acquisitions | ' | ||||
Note 3. Acquisitions | |||||
Cobra | |||||
In December 2012, Athlon FE acquired certain oil and natural gas properties and related assets in the Permian Basin in West Texas from Cobra Oil & Gas Corporation and certain of its subsidiaries and affiliates for approximately $48.3 million in cash, which was financed through a $40 million capital contribution from Apollo and borrowings under Athlon's credit agreement. The operations of these properties have been included with those of Athlon FE from the date of acquisition. | |||||
Element | |||||
On October 3, 2011, Athlon FE acquired certain oil and natural gas properties and related assets in the Permian Basin in West Texas from Element Petroleum, LP ("Element") for approximately $253.2 million in cash, which was financed through borrowings under Athlon FE's then-existing credit agreement and capital contributions from partners. The operations of these properties have been included with those of Athlon FE from the date of acquisition. Athlon FE incurred approximately $6.4 million of transaction costs related to this acquisition, which are included in "General and administrative expenses" in the accompanying Consolidated Statements of Operations. Of this amount, approximately $4.3 million was paid to Apollo. Please read "Note 10. Related Party Transactions" for additional discussion. | |||||
The allocation of the purchase price to the fair value of the assets acquired and liabilities assumed from Element was as follows (in thousands): | |||||
Proved properties, including wells and related equipment | $ | 130,527 | |||
Unproved properties | 123,107 | ||||
Other assets | 806 | ||||
Total assets acquired | 254,440 | ||||
Current liabilities | 831 | ||||
Asset retirement obligations | 393 | ||||
Total liabilities assumed | 1,224 | ||||
Fair value of net assets acquired | $ | 253,216 | |||
Pro Formas | |||||
The following unaudited pro forma condensed financial data was derived from the historical financial statements of Athlon and from the accounting records of Element to give effect to the acquisition as if it had occurred on January 1, 2011. The unaudited pro forma condensed financial information has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the Element acquisition taken place on January 1, 2011 and is not intended to be a projection of future results. | |||||
Year ended | |||||
December 31, | |||||
2011 | |||||
(in thousands) | |||||
Pro forma total revenues | $ | 89,618 | |||
Pro forma net income | $ | 9,777 | |||
SandRidge | |||||
On January 6, 2011, Athlon SG acquired certain oil and natural gas properties and related assets in the Permian Basin in West Texas from SandRidge Exploration and Production, LLC ("SandRidge") for approximately $156.0 million in cash, which was financed through borrowings under Athlon SG's then-existing credit agreement and capital contributions from partners. The operations of these properties have been included with those of Athlon SG from the date of acquisition. Athlon SG incurred $2.6 million of transaction costs related to this acquisition, which are included in "General and administrative expenses" in the accompanying Consolidated Statements of Operations. Of this amount, approximately $2.3 million was paid to Apollo. Please read "Note 10. Related Party Transactions" for additional discussion. | |||||
The allocation of the purchase price to the fair value of the assets acquired and liabilities assumed from SandRidge was as follows (in thousands): | |||||
Proved properties, including wells and related equipment | $ | 158,157 | |||
Oil inventory | 637 | ||||
Total assets acquired | 158,794 | ||||
Asset retirement obligations | 2,778 | ||||
Fair value of net assets acquired | $ | 156,016 | |||
Commitments_and_Contingencies1
Commitments and Contingencies | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||||
Commitments and Contingencies | ' | ' | ||||||||||||||||||||||
Commitments and Contingencies | ' | ' | ||||||||||||||||||||||
Note 10. Commitments and Contingencies | ||||||||||||||||||||||||
Note 4. Commitments and Contingencies | ||||||||||||||||||||||||
From time to time, Athlon is a party to ongoing legal proceedings in the ordinary course of business, including workers’ compensation claims and employment related disputes. Management does not believe the results of these proceedings, individually or in the aggregate, will have a material adverse effect on Athlon’s business, financial position, results of operations, or liquidity. | ||||||||||||||||||||||||
Leases | ||||||||||||||||||||||||
Additionally, Athlon has contractual obligations related to future plugging and abandonment expenses on oil and natural gas properties and related facilities disposal, long-term debt, commodity derivative contracts, operating leases, and development commitments. | ||||||||||||||||||||||||
Athlon leases certain office space that has non-cancelable lease terms in excess of one year. The following table summarizes by year the remaining non-cancelable future payments under these operating leases as of December 31, 2012: | ||||||||||||||||||||||||
Payments Due by Period | ||||||||||||||||||||||||
Total | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Corporate office lease | $ | 1,412 | $ | 381 | $ | 375 | $ | 375 | $ | 281 | $ | — | $ | — | ||||||||||
Midland office lease | 375 | 90 | 92 | 96 | 97 | — | — | |||||||||||||||||
Total | $ | 1,787 | $ | 471 | $ | 467 | $ | 471 | $ | 378 | $ | — | $ | — | ||||||||||
Athlon's operating lease rental expense was approximately $507 thousand and $272 thousand during 2012 and 2011, respectively. | ||||||||||||||||||||||||
Litigation | ||||||||||||||||||||||||
Athlon is a party to ongoing legal proceedings in the ordinary course of business. Management does not believe the results of these proceedings, individually or in the aggregate, will have a material adverse effect on Athlon's business, financial position, results of operations, or liquidity. | ||||||||||||||||||||||||
Asset_Retirement_Obligations1
Asset Retirement Obligations | 9 Months Ended | 12 Months Ended | |||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||
Asset Retirement Obligations | ' | ' | |||||||||||
Asset Retirement Obligations | ' | ' | |||||||||||
Note 5. Asset Retirement Obligations | |||||||||||||
Note 5. Asset Retirement Obligations | |||||||||||||
Asset retirement obligations relate to future plugging and abandonment expenses on oil and natural gas properties and related facilities disposal. The following table summarizes the changes in Athlon’s asset retirement obligations for the nine months ended September 30, 2013 (in thousands): | |||||||||||||
Asset retirement obligations relate to future plugging and abandonment expenses on oil and natural gas properties and related facilities disposal. The following table summarizes the changes in Athlon's asset retirement obligations for the period indicated: | |||||||||||||
Balance at January 1 | $ | 5,049 | |||||||||||
Liabilities assumed in acquisitions | 335 | ||||||||||||
Liabilities incurred from new wells | 735 | Year Ended | |||||||||||
Liabilities settled | (108 | ) | December 31, | ||||||||||
Accretion of discount | 485 | 2012 | 2011 | ||||||||||
Revisions of previous estimates | 3 | (in thousands) | |||||||||||
Balance at September 30 | 6,499 | Balance at January 1 | $ | 3,704 | $ | — | |||||||
Less: current portion | 60 | Acquisition of properties | 60 | 3,282 | |||||||||
Asset retirement obligations - long-term | $ | 6,439 | Wells drilled | 815 | 166 | ||||||||
Accretion of discount | 478 | 344 | |||||||||||
Revisions of previous estimates | (8 | ) | — | ||||||||||
Plugging and abandonment costs incurred | — | (88 | ) | ||||||||||
Balance at December 31 | $ | 5,049 | $ | 3,704 | |||||||||
LongTerm_Debt1
Long-Term Debt | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||||
Long-Term Debt | ' | ' | |||||||||||||||||||||||||||||
Long-Term Debt | ' | ' | |||||||||||||||||||||||||||||
Note 6. Long-Term Debt | |||||||||||||||||||||||||||||||
Note 6. Long-Term Debt | |||||||||||||||||||||||||||||||
Senior Notes | |||||||||||||||||||||||||||||||
Second Lien | |||||||||||||||||||||||||||||||
In April 2013, Holdings issued $500 million aggregate principal amount of 7 3/8% senior notes due 2021 (the “Notes”). The net proceeds from the Notes were used to repay a portion of the outstanding borrowings under Holdings’ credit agreement, to repay in full and terminate Holdings’ former second lien term loan, to make a $75 million distribution to Holdings’ Class A limited partners, and for general partnership purposes. On August 14, 2013, Holdings entered into a supplemental indenture pursuant to which Athlon became an unconditional guarantor of the Notes. | |||||||||||||||||||||||||||||||
Athlon is a party to a second lien term loan agreement dated September 5, 2012 (the "Second Lien"), which matures on November 21, 2017. The Second Lien provides for term loans to be made to Athlon in the aggregate amount of up to $125 million. At December 31, 2012, there were $125 million outstanding loans under the Second Lien. Athlon used the net proceeds from the Second Lien to reduce outstanding borrowings under its credit agreements. | |||||||||||||||||||||||||||||||
The indenture governing the Notes contains covenants, including, among other things, covenants that restrict Holdings’ ability to: | |||||||||||||||||||||||||||||||
Obligations under the Second Lien are secured by a second-priority security interest in substantially all of Athlon's proved reserves and in the equity interests of its operating subsidiaries. In addition, obligations under the Second Lien are fully and unconditionally guaranteed by Athlon's operating subsidiaries. | |||||||||||||||||||||||||||||||
· make distributions, investments, or other restricted payments if Holdings’ fixed charge coverage ratio is less than 2.0 to 1.0; | |||||||||||||||||||||||||||||||
· incur additional indebtedness if Holdings’ fixed charge coverage ratio would be less than 2.0 to 1.0; and | Loans under the Second Lien are subject to varying rates of interest based on whether the loan is a Eurodollar loan or a base rate loan. Eurodollar loans under the Second Lien bear interest at the Eurodollar rate plus the applicable margin indicated in the following table, and base rate loans under the Second Lien bear interest at the base rate plus the applicable margin indicated in the following table: | ||||||||||||||||||||||||||||||
· create liens, sell assets, consolidate or merge with any other person, or engage in transactions with affiliates. | |||||||||||||||||||||||||||||||
These covenants are subject to a number of important qualifications, limitations, and exceptions. In addition, the indenture contains other customary terms, including certain events of default upon the occurrence of which the senior notes may be declared immediately due and payable. | Period | Eurodollar Loans | Base Rate Loans | ||||||||||||||||||||||||||||
September 5, 2012 through December 31, 2013 | 6.5 | % | 5.5 | % | |||||||||||||||||||||||||||
Under the indenture, starting on April 15, 2016, Holdings will be able to redeem some or all of the Notes at a premium that will decrease over time, plus accrued and unpaid interest to the date of redemption. Prior to April 15, 2016, Holdings will be able, at its option, to redeem up to 35% of the aggregate principal amount of the Notes at a price of 107.375% of the principal thereof, plus accrued and unpaid interest to the date of redemption, with an amount equal to the net proceeds from certain equity offerings. In addition, at Holdings’ option, prior to April 15, 2016, Holdings may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes, plus an “applicable premium”, plus accrued and unpaid interest to the date of redemption. If a change of control occurs on or prior to July 15, 2014, Holdings may redeem all, but not less than all, of the notes at 110% of the principal amount thereof plus accrued and unpaid interest to, but not including, the redemption date. Certain asset dispositions will be triggering events that may require Holdings to repurchase all or any part of a noteholder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to but excluding the date of repurchase. Interest on the Notes is payable in cash semi-annually in arrears, commencing on October 15, 2013, through maturity. | January 1, 2014 through December 31, 2014 | 6.75 | % | 5.75 | % | ||||||||||||||||||||||||||
January 1, 2015 through December 31, 2015 | 7 | % | 6 | % | |||||||||||||||||||||||||||
As a result of the issuance of the Notes, Holdings’ former second lien term loan was paid off and retired and the borrowing base of the credit agreement was reduced resulting in a write off of unamortized debt issuance costs of approximately $2.8 million, which is included in “Interest expense” in the accompanying Consolidated Statements of Operations and “Other” in the operating activities section of the accompanying Consolidated Statements of Cash Flows for the nine months ended September 30, 2013. | January 1, 2016 and thereafter | 7.25 | % | 6.25 | % | ||||||||||||||||||||||||||
Credit Agreement | The "Eurodollar rate" for any interest period (either one, two, three, or six months, as selected by Athlon) is equal to the British Bankers Association London Interbank Offered Rate ("LIBOR") divided by 1.00 minus the rate prescribed by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirements in respect of Eurocurrency liabilities for a member of the Federal Reserve System in New York City. The "Base Rate" is calculated as the highest of: (1) the annual rate of interest announced by Wells Fargo Bank, N.A. as its "prime rate"; (2) the federal funds effective rate plus 0.5%; or (3) LIBOR plus 1.0%. | ||||||||||||||||||||||||||||||
Holdings is a party to an amended and restated credit agreement dated March 19, 2013 (the “Holdings Credit Agreement”), which matures on March 19, 2018. The Holdings Credit Agreement provides for revolving credit loans to be made to Holdings from time to time and letters of credit to be issued from time to time for the account of Holdings or any of its restricted subsidiaries. The aggregate amount of the commitments of the lenders under the Holdings Credit Agreement is $1.0 billion. Availability under the Holdings Credit Agreement is subject to a borrowing base, which is redetermined semi-annually and upon requested special redeterminations. | Borrowings under the Second Lien may be repaid from time to time without penalty, except during 2015 in which case there is a 1.0% pre-payment fee. | ||||||||||||||||||||||||||||||
In conjunction with the offering of the Notes in April 2013 as discussed above, the borrowing base under the Holdings Credit Agreement was reduced to $267.5 million. In May 2013, Holdings amended the Holdings Credit Agreement to, among other things, increase the borrowing base to $320 million. As of September 30, 2013, the borrowing base was $320 million and there were no outstanding borrowings and no outstanding letters of credit under the Holdings Credit Agreement. Please see "Note 12. Subsequent Events" for discussion of Athlon's borrowing base redetermination. | The Second Lien contains covenants including, among others, the following: | ||||||||||||||||||||||||||||||
Obligations under the Holdings Credit Agreement are secured by a first-priority security interest in substantially all of Holdings’ proved reserves and in the equity interests of its operating subsidiaries. In addition, obligations under the Holdings Credit Agreement are guaranteed by Athlon and Holdings’ operating subsidiaries. | |||||||||||||||||||||||||||||||
Loans under the Holdings Credit Agreement are subject to varying rates of interest based on (i) outstanding borrowings in relation to the borrowing base and (ii) whether the loan is a Eurodollar loan or a base rate loan. Eurodollar loans under the Holdings Credit Agreement bear interest at the Eurodollar rate plus the applicable margin indicated in the following table, and base rate loans under the Holdings Credit Agreement bear interest at the base rate plus the applicable margin indicated in the following table. Holdings also incurs a quarterly commitment fee on the unused portion of the Holdings Credit Agreement indicated in the following table: | • | ||||||||||||||||||||||||||||||
a prohibition against incurring debt, subject to permitted exceptions; | |||||||||||||||||||||||||||||||
Ratio of Outstanding Borrowings to Borrowing Base | Unused | Applicable | Applicable | ||||||||||||||||||||||||||||
Commitment Fee | Margin for | Margin for Base | • | ||||||||||||||||||||||||||||
Eurodollar Loans | Rate Loans | a restriction on creating liens on Athlon's assets and the assets of its operating subsidiaries, subject to permitted exceptions; | |||||||||||||||||||||||||||||
Less than or equal to .30 to 1 | 0.375 | % | 1.5 | % | 0.5 | % | |||||||||||||||||||||||||
Greater than .30 to 1 but less than or equal to .60 to 1 | 0.375 | % | 1.75 | % | 0.75 | % | • | ||||||||||||||||||||||||
Greater than .60 to 1 but less than or equal to .80 to 1 | 0.5 | % | 2 | % | 1 | % | restrictions on merging and selling assets outside the ordinary course of business; | ||||||||||||||||||||||||
Greater than .80 to 1 but less than or equal to .90 to 1 | 0.5 | % | 2.25 | % | 1.25 | % | |||||||||||||||||||||||||
Greater than .90 to 1 | 0.5 | % | 2.5 | % | 1.5 | % | • | ||||||||||||||||||||||||
restrictions on use of proceeds, investments, transactions with affiliates, or change of principal business; | |||||||||||||||||||||||||||||||
The “Eurodollar rate” for any interest period (either one, two, three, or nine months, as selected by Holdings) is the rate equal to the British Bankers Association London Interbank Offered Rate (“LIBOR”) for deposits in dollars for a similar interest period. The “Base Rate” is calculated as the highest of: (i) the annual rate of interest announced by Bank of America, N.A. as its “prime rate”; (ii) the federal funds effective rate plus 0.5%; or (iii) except during a “LIBOR Unavailability Period”, the Eurodollar rate (for dollar deposits for a one-month term) for such day plus 1.0%. | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
Any outstanding letters of credit reduce the availability under the Holdings Credit Agreement. Borrowings under the Holdings Credit Agreement may be repaid from time to time without penalty. | a provision limiting oil and natural gas swaps to a volume not exceeding the percentages indicated in the following table: | ||||||||||||||||||||||||||||||
The Holdings Credit Agreement contains covenants including, among others, the following: | |||||||||||||||||||||||||||||||
The Months Immediately Following Any Date of Determination | Projected Production from | Projected Production | |||||||||||||||||||||||||||||
· a prohibition against incurring debt, subject to permitted exceptions; | Proved Developed | from Proved Reserves | |||||||||||||||||||||||||||||
· a restriction on creating liens on Holdings’ assets and the assets of its operating subsidiaries, subject to permitted exceptions; | Producing Reserves | ||||||||||||||||||||||||||||||
· restrictions on merging and selling assets outside the ordinary course of business; | 1st through the 24th month | 90 | % | 65 | % | ||||||||||||||||||||||||||
· restrictions on use of proceeds, investments, transactions with affiliates, or change of principal business; | 25th through the 36th month | 85 | % | 50 | % | ||||||||||||||||||||||||||
· a requirement that Holdings maintain a ratio of consolidated total debt to EBITDAX (as defined in the Holdings Credit Agreement) of not more than 4.75 to 1.0 (which ratio changes to 4.5 to 1.0 beginning with the quarter ending June 30, 2014); and | 37th and each succeeding month | 85 | % | 0 | % | ||||||||||||||||||||||||||
· a provision limiting commodity derivative contracts to a volume not exceeding 85% of projected production from proved reserves for a period not exceeding 66 months from the date the commodity derivative contract is entered into. | |||||||||||||||||||||||||||||||
The Holdings Credit Agreement contains customary events of default, including our failure to comply with the financial ratios described above, which would permit the lenders to accelerate the debt if not cured within applicable grace periods. If an event of default occurs and is continuing, lenders with a majority of the aggregate commitments may require Bank of America, N.A. to declare all amounts outstanding under the Holdings Credit Agreement to be immediately due and payable. | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a requirement that Athlon maintain a ratio of consolidated current assets (which includes availability under Athlon's credit agreement) to consolidated current liabilities (which excludes current maturities of long-term debt, non-cash derivative assets and liabilities, and amounts due to Apollo under the Transaction Fee Agreement) of not less than 1.0 to 1.0; | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a requirement that Athlon maintain a ratio of consolidated funded debt to consolidated Adjusted EBITDA (as defined in the Second Lien) of not more than 4.5 to 1.0; and | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a requirement that Athlon maintain a ratio of the most recent present value of total proved reserves discounted at 10% to consolidated funded debt of not less than 1.5 to 1.0. | |||||||||||||||||||||||||||||||
As of December 31, 2012, Athlon was in compliance with all covenants of the Second Lien. | |||||||||||||||||||||||||||||||
The Second Lien contains customary events of default, which would permit the lenders to accelerate the debt if not cured within applicable grace periods. If an event of default occurs and is continuing, lenders with a majority of the aggregate commitments may require Wells Fargo Energy Capital, Inc. to declare all amounts outstanding under the Second Lien to be immediately due and payable. | |||||||||||||||||||||||||||||||
Credit Agreements | |||||||||||||||||||||||||||||||
Athlon SG Credit Agreement | |||||||||||||||||||||||||||||||
Athlon SG was a party to a credit agreement dated January 6, 2011 (as amended, the "SG Credit Agreement"), which was scheduled to mature on January 6, 2016. In May 2012, all outstanding borrowings under the SG Credit Agreement were repaid with borrowings under Athlon's credit agreement discussed below and the SG Credit Agreement was terminated. | |||||||||||||||||||||||||||||||
Athlon FE Credit Agreement | |||||||||||||||||||||||||||||||
Athlon FE was a party to a credit agreement dated October 3, 2011 (as amended, the "FE Credit Agreement"), which was scheduled to mature on October 3, 2016. In May 2012, all outstanding borrowings under the FE Credit Agreement were repaid with borrowings under Athlon's credit agreement discussed below and the FE Credit Agreement was terminated. | |||||||||||||||||||||||||||||||
Athlon Credit Agreement | |||||||||||||||||||||||||||||||
Athlon is a party to a credit agreement dated May 21, 2012 (as amended, the "Athlon Credit Agreement"), which matures on May 21, 2017. Upon entering into the Athlon Credit Agreement, all outstanding borrowings under each of the SG Credit Agreement and the FE Credit Agreement were repaid and the agreements were terminated. On September 5, 2012, Athlon amended the Athlon Credit Agreement to, among other things: (1) exclude amounts due to Apollo under the Transaction Fee Agreement from consolidated current liabilities in the calculation of consolidated current ratio; (2) provide for a reduction in the borrowing base of 20% of any amount incurred under the Second Lien in excess of $100 million; (3) waive the current ratio requirement for the quarter ended June 30, 2012; and (4) reaffirm the borrowing base at $245 million. | |||||||||||||||||||||||||||||||
The Athlon Credit Agreement provides for revolving credit loans to be made to Athlon from time to time and letters of credit to be issued from time to time for the account of Athlon or any of its restricted subsidiaries. The aggregate amount of the commitments of the lenders under the Athlon Credit Agreement is $700 million. Availability under the Athlon Credit Agreement is subject to a borrowing base, which is redetermined semi-annually and upon requested special redeterminations. On December 31, 2012, the borrowing base was $275 million and there were $237 million of outstanding borrowings, $38 million of borrowing capacity, and no outstanding letters of credit under the Athlon Credit Agreement. | |||||||||||||||||||||||||||||||
Athlon incurs a quarterly commitment fee at a rate of 0.5% per year on the unused portion of the Athlon Credit Agreement. | |||||||||||||||||||||||||||||||
Obligations under the Athlon Credit Agreement are secured by a first-priority security interest in substantially all of Athlon's proved reserves and in the equity interests of its operating subsidiaries. In addition, obligations under the Athlon Credit Agreement are guaranteed by Athlon's operating subsidiaries. | |||||||||||||||||||||||||||||||
Loans under the Athlon Credit Agreement are subject to varying rates of interest based on (1) outstanding borrowings in relation to the borrowing base and (2) whether the loan is a Eurodollar loan or a base rate loan. Eurodollar loans under the Athlon Credit Agreement bear interest at the Eurodollar rate plus the applicable margin indicated in the following table, and base rate loans under the Athlon Credit Agreement bear interest at the base rate plus the applicable margin indicated in the following table: | |||||||||||||||||||||||||||||||
Ratio of Outstanding Borrowings to Borrowing Base | Applicable Margin for | Applicable Margin for | |||||||||||||||||||||||||||||
Eurodollar Loans | Base Rate Loans | ||||||||||||||||||||||||||||||
Less than .50 to 1 | 2 | % | 1 | % | |||||||||||||||||||||||||||
Greater than or equal to .50 to 1 but less than .75 to 1 | 2.25 | % | 1.25 | % | |||||||||||||||||||||||||||
Greater than or equal to .75 to 1 but less than .90 to 1 | 2.5 | % | 1.5 | % | |||||||||||||||||||||||||||
Greater than or equal to .90 to 1 | 2.75 | % | 1.75 | % | |||||||||||||||||||||||||||
The "Eurodollar rate" for any interest period (either one, two, three, or six months, as selected by Athlon) is the rate equal to the LIBOR for deposits in dollars for a similar interest period. The "Base Rate" is calculated as the highest of: (1) the annual rate of interest announced by Bank of America, N.A. as its "prime rate"; (2) the federal funds effective rate plus 0.5%; or (3) except during a "LIBOR Unavailability Period," the Eurodollar rate (for dollar deposits for a one-month term) for such day plus 1.0%. | |||||||||||||||||||||||||||||||
Any outstanding letters of credit reduce the availability under the Athlon Credit Agreement. Borrowings under the Athlon Credit Agreement may be repaid from time to time without penalty. | |||||||||||||||||||||||||||||||
The Athlon Credit Agreement contains covenants including, among others, the following: | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a prohibition against incurring debt, subject to permitted exceptions; | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a restriction on creating liens on Athlon's assets and the assets of its operating subsidiaries, subject to permitted exceptions; | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
restrictions on merging and selling assets outside the ordinary course of business; | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
restrictions on use of proceeds, investments, transactions with affiliates, or change of principal business; | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a provision limiting oil and natural gas swaps to a volume not exceeding the percentages indicated in the following table: | |||||||||||||||||||||||||||||||
The Months Immediately Following Any Date of Determination | Projected Production from | Projected Production | |||||||||||||||||||||||||||||
Proved Developed Producing Reserves | from Proved Reserves | ||||||||||||||||||||||||||||||
1st through the 24th month | 90 | % | 65 | % | |||||||||||||||||||||||||||
25th through the 36th month | 85 | % | 50 | % | |||||||||||||||||||||||||||
37th and each succeeding month | 85 | % | 0 | % | |||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a requirement that Athlon maintain a ratio of consolidated current assets (which includes availability under the Athlon Credit Agreement) to consolidated current liabilities (which excludes current maturities of long-term debt, obligations to Apollo arising from the Transaction Fee Agreement, and non-cash derivative assets and liabilities) of not less than 1.0 to 1.0; and | |||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||
a requirement that Athlon maintain a ratio of consolidated funded debt to consolidated Adjusted EBITDA (as defined in the Athlon Credit Agreement) of not more than 4.0 to 1.0. | |||||||||||||||||||||||||||||||
As of December 31, 2012, Athlon was in compliance with all covenants of the Athlon Credit Agreement. | |||||||||||||||||||||||||||||||
The Athlon Credit Agreement contains customary events of default, which would permit the lenders to accelerate the debt if not cured within applicable grace periods. If an event of default occurs and is continuing, lenders with a majority of the aggregate commitments may require Bank of America, N.A. to declare all amounts outstanding under the Athlon Credit Agreement to be immediately due and payable. | |||||||||||||||||||||||||||||||
Long-Term Debt Maturities | |||||||||||||||||||||||||||||||
The following table shows Athlon's long-term debt maturities as of December 31, 2012: | |||||||||||||||||||||||||||||||
Payments Due by Period | |||||||||||||||||||||||||||||||
Total | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Athlon Credit Agreement | $ | 237,000 | $ | — | $ | — | $ | — | $ | — | $ | 237,000 | $ | — | |||||||||||||||||
Second Lien | 125,000 | — | — | — | — | 125,000 | — | ||||||||||||||||||||||||
Total | $ | 362,000 | $ | — | $ | — | $ | — | $ | — | $ | 362,000 | $ | — | |||||||||||||||||
During 2012 and 2011, the weighted-average interest rate for total indebtedness was 4.3% and 3.8%, respectively. | |||||||||||||||||||||||||||||||
Equity
Equity | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||
Stockholders' Equity | ' | ' | ||||||
Equity | ' | ' | ||||||
Note 7. Stockholders’ Equity | ||||||||
Note 7. Equity | ||||||||
In connection with Athlon’s incorporation on April 1, 2013 under the laws of the State of Delaware, it issued 1,000 shares of its common stock to Athlon Holdings GP LLC for an aggregate purchase price of $10.00. On April 26, 2013, in connection with Athlon’s reorganization transactions, certain holders of limited partner interests in Holdings exchanged their Class A interests and Class B interests for an aggregate of 960,907 shares of Athlon’s common stock. In connection with the effectiveness of Athlon’s IPO, these shares were subject to an adjustment based on Athlon’s IPO price of $20.00 per share and an actual 65.266-for-1 stock split resulting in 66,339,615 shares of Athlon’s common stock to be outstanding prior to the closing of the IPO. | ||||||||
On August 23, 2010, Athlon SG entered into a limited partnership agreement with its management group and Apollo. On July 22, 2011, the partnership agreement was amended and restated resulting in the formation of Holdings. The amended and restated partnership agreement required all of Athlon SG's equity contributions to be contributed to Holdings. The holders of all Class A and Class B limited partner units in Athlon SG contributed these units to Holdings in exchange for equivalent units of Holdings. Apollo and Holdings' management group are Class A limited partners. The following table shows the partnership interest in Holdings as of December 31, 2012: | ||||||||
As discussed in “Note 1. Formation of the Company and Description of Business”, on August 7, 2013, Athlon completed its IPO of 15,789,474 shares of its common stock at $20.00 per share and received net proceeds of approximately $295.6 million, after deducting underwriting discounts and commissions and offering expenses. Athlon used the net proceeds from the IPO to purchase New Holdings Units from Holdings. Holdings used the proceeds it received as a result of Athlon’s purchase of New Holdings Units (i) to reduce outstanding borrowings under the Holdings Credit Agreement, (ii) to provide additional liquidity for use in its drilling program, and (iii) for general corporate purposes, including potential acquisitions. Upon consummation of the IPO, Athlon’s ownership percentage of Holdings increased, resulting in a decrease in the noncontrolling interest from approximately 3.2% to approximately 2.2%. | ||||||||
During the third quarter of 2013, Athlon recorded a reclassification of approximately $12.5 million from “Retained earnings” to “Additional paid-in capital” on the accompanying Consolidated Statement of Changes in Equity related to derivative activity that occurred prior to Athlon’s corporate reorganization on April 26, 2013. This resulted in a decrease in “Net income attributable to noncontrolling interest” on the accompanying Consolidated Statements of Operations of approximately $0.4 million during the third quarter of 2013. | Partnership | |||||||
Interest | ||||||||
Athlon Holdings LLC | General Partner | 0 | % | |||||
Apollo Athlon Holdings LLC | Class A Partner | 97.2 | % | |||||
Management group | Class A Partner | 2.8 | % | |||||
As of December 31, 2012, Athlon had remaining capital commitments of approximately $38.1 million from Apollo and none from management. | ||||||||
Employee_Benefit_Plans
Employee Benefit Plans | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||
Incentive Stock Plans | ' | ' | |||||||||||||||||||||||||
Employment Benefit Plans | ' | ' | |||||||||||||||||||||||||
Note 9. Incentive Stock Plans | |||||||||||||||||||||||||||
Note 8. Employee Benefit Plans | |||||||||||||||||||||||||||
In August 2013, Athlon adopted the Athlon Energy Inc. 2013 Incentive Award Plan (the “Plan”). The principal purpose of the Plan will be to attract, retain and engage selected employees, consultants, and directors through the granting of equity and equity-based compensation awards. Employees, consultants, and directors of Athlon and its subsidiaries are eligible to receive awards under the Plan. The Compensation Committee will administer the Plan unless our Board of Directors assumes direct authority for administration. The Plan provides for the grant of stock options (including non-qualified stock options and incentive stock options), restricted stock, dividend equivalents, stock payments, restricted stock units (“RSUs”), performance awards, stock appreciation rights, and other equity-based and cash-based awards, or any combination thereof. | |||||||||||||||||||||||||||
401(k) Plan | |||||||||||||||||||||||||||
Initially, the aggregate number of our shares of common stock available for issuance pursuant to awards granted under the Plan will be the sum of 8,400,000 shares, subject to adjustment as described below plus an annual increase on the first day of each calendar year beginning January 1, 2014 and ending on and including the last January 1 prior to the expiration date of the Plan, equal to the least of (i) 12,000,000 shares, (ii) 4% of the shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year, and (iii) such smaller number of shares as determined by the Board of Directors. This number will also be adjusted due to the following shares becoming eligible to be used again for grants under the Plan: | |||||||||||||||||||||||||||
Athlon made contributions to its 401(k) plan, which is a voluntary and contributory plan for eligible employees based on a percentage of employee contributions, of approximately $454 thousand and $219 thousand during 2012 and 2011, respectively. Athlon's 401(k) plan does not allow employees to invest in securities of Athlon. | |||||||||||||||||||||||||||
· shares subject to awards or portions of awards granted under the Plan which are forfeited, expire, or lapse for any reason, or are settled for cash without the delivery of shares, to the extent of such forfeiture, expiration, lapse or cash settlement; and | |||||||||||||||||||||||||||
· shares that Athlon repurchases prior to vesting so that such shares are returned to Athlon. | Class B Limited Partner Interests | ||||||||||||||||||||||||||
The Plan does not provide for individual limits on awards that may be granted to any individual participant under the Plan. Rather, the amount of awards to be granted to individual participants are determined by the Board of Directors or the Compensation Committee from time to time, as part of their compensation decision-making processes, provided, however, that the Plan does not permit awards having a grant date fair value in excess of $700,000 to be granted to Athlon’s non-employee directors in any year. | Holdings' limited partnership agreement provides for the issuance of Class B limited partner interests. The Class B interests entitle the holder to participate in the net profits of Holdings, but are subject to various performance criteria. Class A interest holders are entitled to a return of their initial investment plus interest compounded at 8% annually (the "Class A Preference Amount"). Upon the occurrence of a liquidity event and after the Class A Preference Amount has been satisfied, 80% and 20% of the remaining net profits will be distributed to holders of Class A interests and Class B interests, respectively. The Class B interests vest over four or five years or upon certain performance thresholds being met by Holdings. Class B interests can also vest on the occurrence of certain events such as a change in control or in some cases upon termination of employment with Holdings. The total number of Class B interests that may be issued pursuant to the partnership agreement is 100,000. As of December 31, 2012, there were 6,200 Class B interests available for issuance under the partnership agreement. Class B interests that are forfeited will again become available for issuance under the partnership agreement. | ||||||||||||||||||||||||||
As of September 30, 2013, there were 7,776,087 shares available for issuance under the Plan. During the nine months ended September 30, 2013, Athlon recorded non-cash stock-based compensation expense related to the Plan of $492,000, which was allocated to lease operating expense and general and administrative expense in the accompanying Consolidated Statements of Operations based on the allocation of the respective employees’ compensation. During the nine months ended September 30, 2013, Athlon capitalized $37,000 of non-cash stock-based compensation expense related to the Plan as a component of “Proved properties, including wells and related equipment” in the accompanying Consolidated Balance Sheets. | Management evaluated the terms of the Class B interests granted during 2010, in particular the potential impact of the performance criteria on the potential value of the Class B interests, and concluded that any compensation expense related to those grants would have been nominal. Management had independent valuations of its Class B interests granted during 2012 and 2011 and recorded approximately $152 thousand and $106 thousand, respectively, of non-cash equity-based compensation expense, which was allocated to LOE and general and administrative expenses in the accompanying Consolidated Statements of Operations based on the allocation of the respective employees' cash compensation. During 2012, Athlon also capitalized approximately $93 thousand of non-cash stock-based compensation expense as a component of "Proved properties, including wells and related equipment" in the accompanying Consolidated Balance Sheets. | ||||||||||||||||||||||||||
RSUs vest over three years, subject to performance criteria for certain members of management. The following table summarizes the changes in Athlon’s unvested RSUs for the nine months ended September 30, 2013: | The fair value of Class B interests granted was estimated on the grant date using an option pricing model based on the following assumptions for the periods indicated: | ||||||||||||||||||||||||||
Weighted - | |||||||||||||||||||||||||||
Average | Year Ended December 31, | ||||||||||||||||||||||||||
Number of | Grant Date | 2012 | 2011 | ||||||||||||||||||||||||
Shares | Fair Value | Expected volatility | 47 | % | 44 | % | |||||||||||||||||||||
Outstanding at January 1 | — | $ | — | Expected dividend yield | 0 | % | 0 | % | |||||||||||||||||||
Granted | 623,913 | 32.21 | Expected term (in years) | 1.52 | 1.65 | ||||||||||||||||||||||
Vested | — | — | Risk-free interest rate | 0.23 | % | 0.35 | % | ||||||||||||||||||||
Forfeited | — | — | Weighted-average grant date fair value per interest | $ | 128.94 | $ | 134.84 | ||||||||||||||||||||
Outstanding at September 30 | 623,913 | 32.21 | |||||||||||||||||||||||||
The expected volatility was calculated based on the average historical volatility of each company in Athlon's peer group based on historical stock price data. The expected term of the Class B interests was based on expectations about future behavior. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the grant date for a period of time commensurate with the expected term of the Class B interests. | |||||||||||||||||||||||||||
As of September 30, 2013, there were 396,413 unvested RSUs, all of which were granted during September 2013, in which the vesting is dependent only on the passage of time and continued employment. Additionally, as of September 30, 2013, there were 227,500 unvested RSUs, all of which were granted during September 2013, in which the vesting is dependent not only on the passage of time and continued employment, but also on the achievement of certain performance criteria. | The following table summarizes the changes in Holdings' Class B interests for the periods indicated: | ||||||||||||||||||||||||||
None of Athlon’s unvested RSUs are subject to variable accounting. As of September 30, 2013, Athlon had approximately $17.9 million of total unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately 2.8 years. | |||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||
Class B Interests | 2012 | 2011 | |||||||||||||||||||||||||
Number of | Weighted- | Number of | Weighted- | ||||||||||||||||||||||||
Holdings’ limited partnership agreement provided for the issuance of Class B limited partner interests. As discussed in “Note 1. Formation of the Company and Description of Business”, in connection with Holdings’ corporate reorganization, the holders of the Class B limited partner interests in Holdings exchanged their interests for common stock of Athlon subject to the same conditions and vesting terms. Upon the consummation of Athlon’s IPO on August 1, 2013, the remaining unvested common stock awards, which were formerly Class B interests in Holdings, vested and Athlon recognized non-cash equity-based compensation expense of approximately $1.5 million. | Class B | Average | Class B | Average | |||||||||||||||||||||||
Interests | Grant Date | Interests | Grant Date | ||||||||||||||||||||||||
During the nine months ended September 30, 2013 and 2012, Athlon recorded approximately $1.3 million and $186,000, respectively, of non-cash equity-based compensation expense related to Class B interests, which was allocated to lease operating expense and general and administrative expenses in the accompanying Consolidated Statements of Operations based on the allocation of the respective employees’ compensation. During the nine months ended September 30, 2013 and 2012, Athlon capitalized approximately $421,000 and $68,000, respectively, of non-cash stock-based compensation expense related to Class B interests as a component of “Proved properties, including wells and related equipment” in the accompanying Consolidated Balance Sheets. | Fair Value | Fair Value | |||||||||||||||||||||||||
Outstanding at beginning of period | 68,662 | $ | 15.93 | 82,153 | $ | — | |||||||||||||||||||||
Granted | 2,195 | 128.94 | 9,050 | 134.84 | |||||||||||||||||||||||
Vested | (20,375 | ) | 11.32 | (19,046 | ) | 3.11 | |||||||||||||||||||||
Forfeited | (270 | ) | 140.72 | (3,495 | ) | 19.13 | |||||||||||||||||||||
Outstanding at end of year | 50,212 | 22.07 | 68,662 | 15.93 | |||||||||||||||||||||||
The following table provides information regarding the expected vesting of Holdings' outstanding Class B interests at December 31, 2012: | |||||||||||||||||||||||||||
Year of Vesting | |||||||||||||||||||||||||||
Year of Grant | 2013 | 2014 | 2015 | 2016 | 2017 | Total | |||||||||||||||||||||
2010 | 18,664 | 14,497 | 8,664 | — | — | 41,825 | |||||||||||||||||||||
2011 | 1,711 | 1,711 | 1,711 | 1,329 | — | 6,462 | |||||||||||||||||||||
2012 | 385 | 385 | 385 | 385 | 385 | 1,925 | |||||||||||||||||||||
Total | 20,760 | 16,593 | 10,760 | 1,714 | 385 | 50,212 | |||||||||||||||||||||
As of December 31, 2012, Athlon had approximately $1.0 million of total unrecognized compensation cost related to unvested Class B interests, which is expected to be recognized over a weighted-average period of approximately 3.7 years. During 2012 and 2011, there were 20,375 and 19,046, respectively, Class B interests that vested, the total fair value of which was approximately $231 thousand and $59 thousand, respectively. | |||||||||||||||||||||||||||
Fair_Value_Measurements1
Fair Value Measurements | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Note 4. Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||
Note 9. Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||
The book values of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. Commodity derivative contracts are marked-to-market each quarter and are thus stated at fair value in the accompanying Consolidated Balance Sheets. As of September 30, 2013, the fair value of the senior notes was approximately $515.6 million using open market quotes (“Level 1” input). | |||||||||||||||||||||||||||||||||||||||||||
The book values of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. The book values of the Athlon Credit Agreement and the Second Lien approximate fair value as the interest rates are variable. Commodity derivative contracts are marked-to-market each quarter and are thus stated at fair value in the accompanying Consolidated Balance Sheets. | |||||||||||||||||||||||||||||||||||||||||||
Derivative Policy | |||||||||||||||||||||||||||||||||||||||||||
Commodity Derivative Contracts | |||||||||||||||||||||||||||||||||||||||||||
Athlon uses various financial instruments for non-trading purposes to manage and reduce price volatility and other market risks associated with its oil production. These arrangements are structured to reduce Athlon’s exposure to commodity price decreases, but they can also limit the benefit Athlon might otherwise receive from commodity price increases. Athlon’s risk management activity is generally accomplished through over-the-counter commodity derivative contracts with large financial institutions, most of which are lenders underwriting Holdings’ credit agreement. | |||||||||||||||||||||||||||||||||||||||||||
Commodity prices are often subject to significant volatility due to many factors that are beyond Athlon's control, including but not limited to: prevailing economic conditions, supply and demand of hydrocarbons in the marketplace, actions by speculators, and geopolitical events such as wars or natural disasters. Athlon's objective is to manage its exposure to oil price risk with swaps, puts, and collars. Swaps provide a fixed price for a notional amount of sales volumes. Puts provide a fixed floor price on a notional amount of sales volumes while allowing full price participation if the relevant index price closes above the floor price. Collars provide a floor price on a notional amount of sales volumes while allowing some additional price participation if the relevant index price closes above the floor price. This participation is limited by a ceiling price specified in the contract. | |||||||||||||||||||||||||||||||||||||||||||
Athlon applies the provisions of the “Derivatives and Hedging” topic of the Accounting Standards Codification, which requires each derivative instrument to be recorded in the accompanying Consolidated Balance Sheets at fair value. If a derivative has not been designated as a hedge or does not otherwise qualify for hedge accounting, it must be adjusted to fair value through earnings. Athlon elected not to designate its current portfolio of commodity derivative contracts as hedges for accounting purposes. Therefore, changes in fair value of these derivative instruments are recognized in earnings and included in “Derivative fair value loss (gain)” in the accompanying Consolidated Statements of Operations. | |||||||||||||||||||||||||||||||||||||||||||
The following table summarizes open commodity derivative contracts as of December 31, 2012: | |||||||||||||||||||||||||||||||||||||||||||
Athlon enters into commodity derivative contracts for the purpose of economically fixing the price of its anticipated oil production even though Athlon does not designate the derivatives as hedges for accounting purposes. Athlon classifies cash flows related to derivative contracts based on the nature and purpose of the derivative. As the derivative cash flows are considered an integral part of Athlon’s oil and natural gas operations, they are classified as cash flows from operating activities in the accompanying Consolidated Statements of Cash Flows. | |||||||||||||||||||||||||||||||||||||||||||
Commodity Derivative Contracts | Period | Average | Weighted- | Average | Weighted- | Average | Weighted- | Asset | |||||||||||||||||||||||||||||||||||
Daily | Average | Daily | Average | Daily | Average | Fair Market | |||||||||||||||||||||||||||||||||||||
Commodity prices are often subject to significant volatility due to many factors that are beyond Athlon’s control, including but not limited to: prevailing economic conditions, supply and demand of hydrocarbons in the marketplace, actions by speculators, and geopolitical events such as wars or natural disasters. Athlon manages oil price risk with swaps and collars. Swaps provide a fixed price for a notional amount of sales volumes. Collars provide a floor price on a notional amount of sales volumes while allowing some additional price participation if the relevant index price closes above the floor price. This participation is limited by a ceiling price specified in the contract. | Floor | Floor | Cap | Cap | Swap | Swap | Value | ||||||||||||||||||||||||||||||||||||
Volume | Price | Volume | Price | Volume | Price | ||||||||||||||||||||||||||||||||||||||
The following table summarizes Athlon’s open commodity derivative contracts as of September 30, 2013: | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (in thousands) | ||||||||||||||||||||||||||||||||||||
2013 | 150 | $ | 75 | 150 | $ | 105.95 | 5,000 | $ | 94.15 | $ | 1,654 | ||||||||||||||||||||||||||||||||
Average | Weighted - | Average | Weighted - | Average | Weighted - | Asset | 2014 | — | — | — | — | 4,950 | 92.65 | 956 | |||||||||||||||||||||||||||||
Daily | Average | Daily | Average | Daily | Average | (Liability) | 2015 | — | — | — | — | 800 | 94.86 | 1,379 | |||||||||||||||||||||||||||||
Floor | Floor | Cap | Cap | Swap | Swap | Fair Market | |||||||||||||||||||||||||||||||||||||
Period | Volume | Price | Volume | Price | Volume | Price | Value | $ | 3,989 | ||||||||||||||||||||||||||||||||||
(Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (in thousands) | |||||||||||||||||||||||||||||||||||||
Oct. - Dec. 2013 | 150 | $ | 75 | 150 | $ | 105.95 | 7,000 | $ | 95.01 | $ | (4,205 | ) | |||||||||||||||||||||||||||||||
2014 | — | — | — | — | 7,950 | 92.67 | (7,532 | ) | In January 2011, Athlon terminated certain oil puts that were in place at December 31, 2010 and received net proceeds of approximately $7.6 million, which is reflected as "Monetization of put options" in the "Investing activities" section of the accompanying Consolidated Statements of Cash Flows. In July and August 2011, Athlon entered into additional oil puts that included deferred premiums. These deferred premiums increased Athlon's interest expense by approximately $0.2 million during 2011. In October 2011, Athlon terminated the oil puts and entered into oil swaps that required the initial payment of premiums of approximately $2.0 million. | ||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | 1,300 | 93.18 | 2,101 | ||||||||||||||||||||||||||||||||||||
$ | (9,636 | ) | Counterparty Risk. At December 31, 2012, Athlon had committed 10% or greater (in terms of fair market value) of its oil derivative contracts in asset positions from the following counterparties: | ||||||||||||||||||||||||||||||||||||||||
Athlon is also a party to Midland-Cushing basis differential swaps for 5,000 Bbls/D at $1.20/Bbl for the fourth quarter of 2013. At September 30, 2013, the fair value of these contracts was a liability of approximately $0.3 million. | Counterparty | Fair Market Value of | |||||||||||||||||||||||||||||||||||||||||
Oil Derivative | |||||||||||||||||||||||||||||||||||||||||||
Counterparty Risk. At September 30, 2013, Athlon had committed 10% or greater (in terms of fair market value) of its oil derivative contracts in asset positions from the following counterparties, or their affiliates: | Contracts | ||||||||||||||||||||||||||||||||||||||||||
Committed | |||||||||||||||||||||||||||||||||||||||||||
Fair Market Value of | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||
Oil Derivative | BNP Paribas | $ | 3,660 | ||||||||||||||||||||||||||||||||||||||||
Contracts | Royal Bank of Canada | 711 | |||||||||||||||||||||||||||||||||||||||||
Counterparty | Committed | Scotiabank | 617 | ||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
BNP Paribas | $ | 458 | Athlon does not require collateral from its counterparties for entering into financial instruments, so in order to mitigate the credit risk associated with financial instruments, Athlon enters into master netting agreements with certain counterparties. The master netting agreement is a standardized, bilateral contract between a given counterparty and Athlon. Instead of treating each financial transaction between the counterparty and Athlon separately, the master netting agreement enables the counterparty and Athlon to aggregate all financial trades and treat them as a single agreement. This arrangement is intended to benefit Athlon in two ways: (1) default by a counterparty under one financial trade can trigger rights to terminate all financial trades with such counterparty; and (2) netting of settlement amounts reduces Athlon's credit exposure to a given counterparty in the event of close-out. Athlon's accounting policy is to not offset fair value amounts between different counterparties for derivative instruments in the accompanying Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||||||||||||
Tabular Disclosures of Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||
Athlon does not require collateral from its counterparties for entering into financial instruments, so in order to mitigate the credit risk associated with financial instruments, Athlon enters into master netting agreements with its counterparties. The master netting agreement is a standardized, bilateral contract between a given counterparty and Athlon. Instead of treating each financial transaction between the counterparty and Athlon separately, the master netting agreement enables the counterparty and Athlon to aggregate all financial trades and treat them as a single agreement. This arrangement is intended to benefit Athlon in two ways: (i) default by a counterparty under a single financial trade can trigger rights to terminate all financial trades with such counterparty; and (ii) netting of settlement amounts reduces Athlon’s credit exposure to a given counterparty in the event of close-out. Athlon’s accounting policy is to not offset fair value amounts between different counterparties for derivative instruments in the accompanying Consolidated Balance Sheets. | |||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the fair value of Athlon's derivative instruments as of the dates indicated (in thousands): | |||||||||||||||||||||||||||||||||||||||||||
Tabular Disclosures of Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the fair value of Athlon’s derivative instruments not designated as hedging instruments as of the dates indicated: | Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
Oil | Commodity | Total | Balance Sheet | December 31, | December 31, | Balance Sheet | December 31, | December 31, | |||||||||||||||||||||||||||||||||||
Balance Sheet | Commodity | Derivatives | Commodity | Location | 2012 | 2011 | Location | 2012 | 2011 | ||||||||||||||||||||||||||||||||||
Location | Derivatives | Netting (a) | Derivatives | Derivatives not designated as hedges | |||||||||||||||||||||||||||||||||||||||
(in thousands) | Commodity derivative contracts | Derivatives—current | $ | 2,246 | $ | — | Derivatives—current | $ | 592 | $ | 5,908 | ||||||||||||||||||||||||||||||||
As of September 30, 2013 | Commodity derivative contracts | Derivatives—noncurrent | 2,854 | 2,503 | Derivatives—noncurrent | 519 | 2,554 | ||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||
Derivatives - current | $ | 162 | $ | (162 | ) | $ | — | Total derivatives not designated as hedges | $ | 5,100 | $ | 2,503 | $ | 1,111 | $ | 8,462 | |||||||||||||||||||||||||||
Derivatives - noncurrent | 2,149 | (938 | ) | 1,211 | |||||||||||||||||||||||||||||||||||||||
Total assets | 2,311 | (1,100 | ) | 1,211 | |||||||||||||||||||||||||||||||||||||||
Liabilities | The following table summarizes the effect of derivative instruments not designated as hedges on the accompanying Consolidated Statements of Operations for the periods indicated (in thousands): | ||||||||||||||||||||||||||||||||||||||||||
Derivatives - current | (10,347 | ) | 162 | (10,185 | ) | ||||||||||||||||||||||||||||||||||||||
Derivatives - noncurrent | (1,930 | ) | 938 | (992 | ) | ||||||||||||||||||||||||||||||||||||||
Total liabilities | (12,277 | ) | 1,100 | (11,177 | ) | Amount of Loss | |||||||||||||||||||||||||||||||||||||
Net liabilities | $ | (9,966 | ) | $ | — | $ | (9,966 | ) | (Gain) Recognized | ||||||||||||||||||||||||||||||||||
in Income | |||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2012 | Year ended | ||||||||||||||||||||||||||||||||||||||||||
Assets | Location of Loss (Gain) | December 31, | |||||||||||||||||||||||||||||||||||||||||
Derivatives - current | $ | 3,386 | $ | (1,140 | ) | $ | 2,246 | Derivatives Not Designated as Hedges | Recognized in Income | 2012 | 2011 | ||||||||||||||||||||||||||||||||
Derivatives - noncurrent | 3,265 | (411 | ) | 2,854 | Commodity derivative contracts | Derivative fair value loss (gain) | $ | (9,293 | ) | $ | 7,959 | ||||||||||||||||||||||||||||||||
Total assets | 6,651 | (1,551 | ) | 5,100 | |||||||||||||||||||||||||||||||||||||||
Liabilities | Fair Value Hierarchy | ||||||||||||||||||||||||||||||||||||||||||
Derivatives - current | (1,732 | ) | 1,140 | (592 | ) | ||||||||||||||||||||||||||||||||||||||
Derivatives - noncurrent | (930 | ) | 411 | (519 | ) | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are defined as follows: | |||||||||||||||||||||||||||||||||||||
Total liabilities | (2,662 | ) | 1,551 | (1,111 | ) | ||||||||||||||||||||||||||||||||||||||
Net assets | $ | 3,989 | $ | — | $ | 3,989 | |||||||||||||||||||||||||||||||||||||
(a) Represents counterparty netting under master netting agreements, which allow for netting of commodity derivative contracts. These derivative instruments are reflected net on the accompanying Consolidated Balance Sheets. | • | ||||||||||||||||||||||||||||||||||||||||||
Level 1—Inputs such as unadjusted, quoted prices that are available in active markets for identical assets or liabilities. | |||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the effect of derivative instruments not designated as hedges on the accompanying Consolidated Statements of Operations for the periods indicated (in thousands): | |||||||||||||||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||||||||||||||
Amount of Loss (Gain) Recognized in Income | Level 2—Inputs, other than quoted prices within Level 1, that are either directly or indirectly observable. | ||||||||||||||||||||||||||||||||||||||||||
Location of Loss (Gain) | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||||||
Derivatives Not Designated as Hedges | Recognized in Income | 2013 | 2012 | 2013 | 2012 | • | |||||||||||||||||||||||||||||||||||||
Commodity derivative contracts | Derivative fair value loss (gain) | $ | 27,037 | $ | 14,268 | $ | 21,331 | $ | (9,590 | ) | Level 3—Inputs that are unobservable for use when little or no market data exists requiring the use of valuation methodologies that result in management's best estimate of fair value. | ||||||||||||||||||||||||||||||||
As required by GAAP, Athlon utilizes the most observable inputs available for the valuation technique used. The financial assets and liabilities are classified in their entirety based on the lowest level of input that is of significance to the fair value measurement. Athlon's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the financial assets and liabilities and their placement within the fair value hierarchy levels. The following methods and assumptions were used to estimate the fair values of Athlon's assets and liabilities that are accounted for at fair value on a recurring basis: | |||||||||||||||||||||||||||||||||||||||||||
Fair Value Hierarchy | |||||||||||||||||||||||||||||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting principles generally accepted in the United States (“GAAP”) establishes a three-tier fair value hierarchy, which prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are defined as follows: | |||||||||||||||||||||||||||||||||||||||||||
• | |||||||||||||||||||||||||||||||||||||||||||
· Level 1 — Inputs such as unadjusted, quoted prices that are available in active markets for identical assets or liabilities. | Level 2—Fair values of swaps were estimated using a combined income-based and market-based valuation methodology based upon forward commodity price curves obtained from independent pricing services. Athlon's collars and puts are average value options. Settlement is determined by the average underlying price over a predetermined period of time. Athlon uses observable inputs in an option pricing valuation model to determine fair value such as: (1) current market and contractual prices for the underlying instruments; (2) quoted forward prices for oil and natural gas; (3) interest rates, such as a LIBOR curve for a term similar to the commodity derivative contract; and (4) appropriate volatilities. | ||||||||||||||||||||||||||||||||||||||||||
· Level 2 — Inputs, other than quoted prices within Level 1, that are either directly or indirectly observable, such as quoted prices for similar assets and liabilities or quoted prices in inactive markets. | |||||||||||||||||||||||||||||||||||||||||||
Athlon adjusts the valuations from the valuation model for nonperformance risk. For commodity derivative contracts which are in an asset position, Athlon uses the counterparty's credit default swap rating. For commodity derivative contracts which are in a liability position, Athlon uses the average credit default swap rating of its peer companies as Athlon does not have its own credit default swap rating. All fair values have been adjusted for nonperformance risk resulting in an increase in the net commodity derivative asset of approximately $0.1 million as of December 31, 2012 and a decrease of the net commodity derivative liability of approximately $0.5 million as of December 31, 2011. | |||||||||||||||||||||||||||||||||||||||||||
· Level 3 — Inputs that are unobservable for use when little or no market data exists requiring the use of valuation methodologies that result in management’s best estimate of fair value. | |||||||||||||||||||||||||||||||||||||||||||
The following table sets forth Athlon's assets and liabilities that were accounted for at fair value on a recurring basis as of the dates indicated: | |||||||||||||||||||||||||||||||||||||||||||
As required by GAAP, Athlon utilizes the most observable inputs available for the valuation technique used. The financial assets and liabilities are classified in their entirety based on the lowest level of input that is of significance to the fair value measurement. Athlon’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the financial assets and liabilities and their placement within the fair value hierarchy levels. The following methods and assumptions were used to estimate the fair values of Athlon’s assets and liabilities that are accounted for at fair value on a recurring basis: | |||||||||||||||||||||||||||||||||||||||||||
· Level 2 — Fair values of swaps are estimated using a combined income-based and market-based valuation methodology based upon forward commodity price curves obtained from independent pricing services. Athlon’s collars are average value options. Settlement is determined by the average underlying price over a predetermined period of time. Athlon uses observable inputs in an option pricing valuation model to determine fair value such as: (i) current market and contractual prices for the underlying instruments; (ii) quoted forward prices for oil and natural gas; (iii) interest rates, such as a LIBOR curve for a term similar to the commodity derivative contract; and (iv) appropriate volatilities. | Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||||||||||||||||||||||||
Description | Asset (liability), net | Quoted Prices in | Significant Other | Significant | |||||||||||||||||||||||||||||||||||||||
Athlon adjusts the valuations from the valuation model for nonperformance risk. For commodity derivative contracts which are in an asset position, Athlon adds the counterparty’s credit default swap spread to the risk-free rate. If a counterparty does not have a credit default swap spread, Athlon uses other companies with similar credit ratings to determine the applicable spread. For commodity derivative contracts which are in a liability position, Athlon uses the yield on its senior notes less the risk-free rate. All fair values have been adjusted for nonperformance risk resulting in a decrease in the net commodity derivative liability of approximately $136,000 as of September 30, 2013 and an increase in the net commodity derivative asset of approximately $125,000 as of December 31, 2012. | Active Markets for | Observable Inputs | Unobservable Inputs | ||||||||||||||||||||||||||||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||||||||||||||||||||||||||||
The following table sets forth Athlon’s assets and liabilities that were accounted for at fair value on a recurring basis as of the dates indicated: | (Level 1) | ||||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at Reporting Date Using | As of December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
Quoted Prices in | Oil derivative contracts—swaps | $ | 4,069 | $ | — | $ | 4,069 | $ | — | ||||||||||||||||||||||||||||||||||
Active Markets for | Significant Other | Significant | Oil derivative contracts—collars and puts | (80 | ) | — | (80 | ) | — | ||||||||||||||||||||||||||||||||||
Identical Assets | Observable Inputs | Unobservable Inputs | |||||||||||||||||||||||||||||||||||||||||
Description | Asset (liability), net | (Level 1) | (Level 2) | (Level 3) | Total | $ | 3,989 | $ | — | $ | 3,989 | $ | — | ||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
As of September 30, 2013 | As of December 31, 2011 | ||||||||||||||||||||||||||||||||||||||||||
Oil derivative contracts - swaps | $ | (9,622 | ) | $ | — | $ | (9,622 | ) | $ | — | Oil derivative contracts—swaps | $ | (5,392 | ) | $ | — | $ | (5,392 | ) | $ | — | ||||||||||||||||||||||
Oil derivative contracts - basis differential swaps | (330 | ) | — | (330 | ) | — | Oil derivative contracts—collars and puts | (567 | ) | — | — | (567 | ) | ||||||||||||||||||||||||||||||
Oil derivative contracts - collars | (14 | ) | — | (14 | ) | — | |||||||||||||||||||||||||||||||||||||
Total | $ | (9,966 | ) | $ | — | $ | (9,966 | ) | $ | — | Total | $ | (5,959 | ) | $ | — | $ | (5,392 | ) | $ | (567 | ) | |||||||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||||||||||||||||||||||||
Oil derivative contracts - swaps | $ | 4,069 | $ | — | $ | 4,069 | $ | — | Athlon's oil collars were classified as Level 3 in the fair value hierarchy as of December 31, 2011. Beginning in 2012, these contracts were classified as Level 2 in the fair value hierarchy as a result of Athlon's ability to obtain appropriate volatilities. The following table summarizes the changes in the fair value of Athlon's Level 3 assets and liabilities that were previously classified as Level 3 for the periods indicated: | ||||||||||||||||||||||||||||||||||
Oil derivative contracts - collars | (80 | ) | — | (80 | ) | — | |||||||||||||||||||||||||||||||||||||
Total | $ | 3,989 | $ | — | $ | 3,989 | $ | — | |||||||||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||
Using Significant | |||||||||||||||||||||||||||||||||||||||||||
Unobservable Inputs (Level 3) | |||||||||||||||||||||||||||||||||||||||||||
Oil Derivative | |||||||||||||||||||||||||||||||||||||||||||
Contracts— | |||||||||||||||||||||||||||||||||||||||||||
Collars and Puts | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2011 | $ | 7,475 | |||||||||||||||||||||||||||||||||||||||||
Total gains (losses): | |||||||||||||||||||||||||||||||||||||||||||
Included in earnings | (461 | ) | |||||||||||||||||||||||||||||||||||||||||
Monetization of put options | (7,625 | ) | |||||||||||||||||||||||||||||||||||||||||
Purchases (premiums paid) | 44 | ||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2011 | (567 | ) | |||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 | 567 | ||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2012 | $ | — | |||||||||||||||||||||||||||||||||||||||||
Since Athlon does not use hedge accounting for its commodity derivative contracts, all gains and losses on its Level 3 assets and liabilities are included in "Derivative fair value loss (gain)" in the accompanying Consolidated Statements of Operations. | |||||||||||||||||||||||||||||||||||||||||||
Related_Party_Transactions1
Related Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Related Party Transactions | ' | ' |
Related Party Transactions | ' | ' |
Note 11. Related Party Transactions | ||
Note 10. Related Party Transactions | ||
Transaction Fee Agreement | ||
Transaction Fee Agreement | ||
Holdings was a party to a Transaction Fee Agreement, dated August 23, 2010, which required Holdings to pay a fee to Apollo equal to 2% of the total equity contributed to Holdings, as defined in the agreement, in exchange for consulting and advisory services provided by Apollo. In October 2012, Apollo assigned its rights and obligations under the Transaction Fee Agreement to an affiliate, Apollo Global Securities, LLC. Upon the consummation of Athlon’s IPO, Holdings terminated the Transaction Fee Agreement. Since Holdings’ inception through the termination of the Transaction Fee Agreement, it incurred transaction fees under the Transaction Fee Agreement of approximately $7.5 million in total. | ||
Athlon is a party to a Transaction Fee Agreement, dated August 23, 2010, which requires Athlon to pay a fee to Apollo equal to 2% of the total equity contributed to Athlon, as defined in the agreement, in exchange for consulting and advisory services provided by Apollo. In October 2012, Apollo assigned its rights and obligations under the Transaction Fee Agreement to Apollo Global Securities, LLC. In December 2012, Athlon incurred a transaction fee payable to Apollo Global Securities, LLC of $0.8 million related to a $40 million capital contribution received from Apollo. Upon the closing of the SandRidge acquisition in January 2011, Athlon SG incurred a transaction fee payable to Apollo of approximately $2.3 million. Upon the closing of the Element acquisition in October 2011, Athlon FE incurred a transaction fee payable to Apollo of approximately $4.3 million. All transaction fees incurred under the Transaction Fee Agreement are included in "Acquisition costs" in the accompanying Consolidated Statements of Operations during the period incurred. | ||
Services Agreement | ||
Services Agreement | ||
Holdings was a party to a Services Agreement, dated August 23, 2010, which required Holdings to compensate Apollo for consulting and advisory services equal to the higher of (i) 1% of earnings before interest, income taxes, DD&A, and exploration expense per quarter and (ii) $62,500 per quarter (the “Advisory Fee”); provided, however, that such Advisory Fee for any calendar year shall not exceed $500,000. The Services Agreement also provided for reimbursement to Apollo for any reasonable out-of-pocket expenses incurred while performing services under the Services Agreement. During the nine months ended September 30, 2013 and 2012, Holdings incurred approximately $500,000 and $493,000, respectively, of Advisory Fees. All fees incurred under the Services Agreement are included in “General and administrative expenses” in the accompanying Consolidated Statements of Operations. | ||
Athlon is also a party to a Services Agreement, dated August 23, 2010, which requires Athlon to further compensate Apollo for consulting and advisory services equal to a minimum of $62,500 per quarter or 1% of net income before interest, income taxes, and DD&A, not to exceed $500,000 in any calendar year. The Services Agreement also provides for reimbursement to Apollo for any reasonable out-of-pocket expenses incurred while performing under the Services Agreement. During 2012 and 2011, Athlon incurred approximately $493 thousand and $411 thousand, respectively, of fees under the Services Agreement, which is included in "General and administrative expenses" in the accompanying Consolidated Statements of Operations. | ||
Upon the consummation of Athlon’s IPO, Holdings terminated the Services Agreement and, in connection with the termination, Holdings paid $2.4 million (plus $132,000 of unreimbursed fees) to Apollo. Such payment corresponded to the present value as of the date of termination of the aggregate annual fees that would have been payable during the remainder of the term of the Services Agreement (assuming a term ending on August 23, 2020). Under the Services Agreement, Holdings also agreed to indemnify Apollo and its affiliates and their respective limited partners, general partners, directors, members, officers, managers, employees, agents, advisors, their directors, officers, and representatives for potential losses relating to the services contemplated under the Services Agreement. | ||
Participation of Apollo Global Securities, LLC in Senior Notes Offering and IPO | ||
Apollo Global Securities, LLC is an affiliate of the Apollo Funds and received a portion of the gross spread as an initial purchaser of the Notes of $0.5 million. Apollo Global Securities, LLC was also an underwriter in Athlon’s IPO and received a portion of the discounts and commissions paid to the underwriters in the IPO of approximately $0.9 million. | ||
Distribution | ||
Holdings used a portion of the net proceeds from the Notes to make a distribution to its Class A limited partners, including the Apollo Funds and its management team and employees. The Apollo Funds received approximately $73 million of the distribution and the remaining Class A limited partners received approximately $2 million, in the aggregate. | ||
Exchange Agreement | ||
Upon the consummation of its IPO, Athlon entered into an exchange agreement with certain members of its management team and employees who hold New Holdings Units after the closing of the IPO. Under the exchange agreement, each such holder (and certain permitted transferees thereof) may, under certain circumstances after the date of the closing of the IPO (subject to the terms of the exchange agreement), exchange their New Holdings Units for shares of Athlon’s common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. As a holder exchanges its New Holdings Units, Athlon’s interest in Holdings will be correspondingly increased. | ||
Tax Receivable Agreement | ||
Upon the consummation of its IPO, Athlon entered into a tax receivable agreement with certain members of its management team and employees who hold New Holdings Units after the closing of the IPO that provides for the payment from time to time by Athlon to such unitholders of Holdings of 85% of the amount of the benefits, if any, that Athlon is deemed to realize as a result of increases in tax basis and certain other tax benefits related to exchanges of New Holdings Units pursuant to the exchange agreement, including tax benefits attributable to payments under the tax receivable agreement. These payment obligations are obligations of Athlon and not of Holdings. For purposes of the tax receivable agreement, the benefit deemed realized by Athlon will be computed by comparing its actual income tax liability (calculated with certain assumptions) to the amount of such taxes that Athlon would have been required to pay had there been no increase to the tax basis of the assets of Holdings as a result of the exchanges and had Athlon not entered into the tax receivable agreement. | ||
The step-up in basis will depend on the fair value of the New Holdings Units at conversion. There is no intent of the holders of New Holdings Units to exchange their units for shares of Athlon’s common stock in the foreseeable future. In addition, Athlon does not expect to be in a tax paying position before 2019. Therefore, Athlon cannot presently estimate what the benefit or payments under the tax receivable agreement will be on a factually supportable basis, and accordingly not recognized as a liability. |
Earnings_Per_Share1
Earnings Per Share | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Earnings Per Share | ' | ' | ||||||||||||||||||||
Earnings Per Share | ' | ' | ||||||||||||||||||||
Note 8. Earnings Per Share | ||||||||||||||||||||||
Note 11. Earnings Per Share | ||||||||||||||||||||||
Prior to the consummation of Athlon’s IPO, Athlon had 960,907 shares of outstanding common stock. In conjunction with the closing of the IPO, certain Class A limited partners and Class B limited partners of Holdings that exchanged their interests for shares of Athlon’s common stock were subject to an adjustment based on Athlon’s IPO price of $20.00 per share and an actual 65.266-for-1 stock split. Following this adjustment and stock split, the number of outstanding shares of Athlon’s common stock increased from 960,907 shares to 66,339,615 shares. The one-to-one conversion of the Holdings interests in April 2013 to 960,907 shares of Athlon common stock that occurred in connection with the IPO is akin to a stock split and has been treated as such in Athlon’s earnings per share (“EPS”) calculations. Accordingly, Athlon assumes that 66,339,615 shares of common stock were outstanding during periods prior to Athlon’s IPO for purposes of calculating EPS. | ||||||||||||||||||||||
Prior to the consummation of Athlon's IPO, Athlon had 960,907 shares of outstanding common stock. In conjunction with the closing of the IPO, certain Class A limited partners and Class B limited partners of Holdings that exchanged their interests for shares of Athlon's common stock were subject to an adjustment based on Athlon's IPO price of $20.00 per share and an actual 65.266-for-1 stock split. Following this adjustment and stock split, the number of outstanding shares of Athlon's common stock increased from 960,907 shares to 66,339,615 shares. The one-to-one conversion of the Holdings' interests in April 2013 to 960,907 shares of Athlon common stock that occurred in connection with the IPO is akin to a stock split and has been treated as such in Athlon's earnings per share ("EPS") calculations. Accordingly, Athlon assumes that 66,339,615 shares of common stock were outstanding during periods prior to Athlon's IPO for purposes of calculating EPS. | ||||||||||||||||||||||
The following table reflects the allocation of net income (loss) to common stockholders and EPS computations for the periods indicated: | ||||||||||||||||||||||
The following table reflects the allocation of net income (loss) to common stockholders and EPS computations for the periods indicated: | ||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
(in thousands, except per share amounts) | Year ended | |||||||||||||||||||||
Basic EPS | December 31, | |||||||||||||||||||||
Numerator: | 2012 | 2011 | ||||||||||||||||||||
Undistributed net income (loss) attributable to stockholders | $ | 2,482 | $ | (2,096 | ) | $ | 37,058 | $ | 42,508 | (in thousands, except | ||||||||||||
Participation rights of unvested RSUs in undistributed earnings | (6 | ) | — | (6 | ) | — | per share amounts) | |||||||||||||||
Basic undistributed net income (loss) attributable to stockholders | $ | 2,476 | $ | (2,096 | ) | $ | 37,052 | $ | 42,508 | Basic EPS | ||||||||||||
Denominator: | Numerator: | |||||||||||||||||||||
Basic weighted average shares outstanding | 76,637 | 66,340 | 69,810 | 66,340 | Basic undistributed net income (loss) attributable to stockholders | $ | 53,014 | $ | (1,129 | ) | ||||||||||||
Basic EPS attributable to stockholders | $ | 0.03 | $ | (0.03 | ) | $ | 0.53 | $ | 0.64 | |||||||||||||
Denominator: | ||||||||||||||||||||||
Diluted EPS | Basic weighted average shares outstanding | 66,340 | 66,340 | |||||||||||||||||||
Numerator: | ||||||||||||||||||||||
Undistributed net income (loss) attributable to stockholders | $ | 2,482 | $ | (2,096 | ) | $ | 37,058 | $ | 42,508 | Basic EPS attributable to stockholders | $ | 0.8 | $ | (0.02 | ) | |||||||
Participation rights of unvested RSUs in undistributed earnings | (6 | ) | — | (6 | ) | — | ||||||||||||||||
Effect of conversion of New Holdings Units to shares of Athlon’s common stock | (215 | ) | — | 616 | — | Diluted EPS | ||||||||||||||||
Diluted undistributed net income (loss) attributable to stockholders | $ | 2,261 | $ | (2,096 | ) | $ | 37,668 | $ | 42,508 | Numerator: | ||||||||||||
Denominator: | Diluted undistributed net income (loss) attributable to stockholders | $ | 53,014 | $ | (1,129 | ) | ||||||||||||||||
Basic weighted average shares outstanding | 76,637 | 66,340 | 69,810 | 66,340 | ||||||||||||||||||
Effect of conversion of New Holdings Units to shares of Athlon’s common stock (a) | 1,856 | — | 1,856 | 1,856 | Denominator: | |||||||||||||||||
Diluted weighted average shares outstanding | 78,493 | 66,340 | 71,666 | 68,196 | Basic weighted average shares outstanding | 66,340 | 66,340 | |||||||||||||||
Diluted EPS attributable to stockholders | $ | 0.03 | $ | (0.03 | ) | $ | 0.53 | $ | 0.62 | Effect of conversion of New Holdings Units to shares of Athlon's common stock(a) | 1,856 | — | ||||||||||
(a) For the three months ended September 30, 2012, 1,855,563 New Holdings Units were outstanding but excluded from the EPS calculations because their effect would have been antidilutive. | Diluted weighted average shares outstanding | 68,196 | 66,340 | |||||||||||||||||||
Diluted EPS attributable to stockholders | $ | 0.78 | $ | (0.02 | ) | |||||||||||||||||
(a) | ||||||||||||||||||||||
For 2011, 1,855,563 New Holdings Units were outstanding but excluded from the EPS calculations because their effect would have been antidilutive. | ||||||||||||||||||||||
Subsequent_Events1
Subsequent Events | 9 Months Ended | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||
Subsequent Events | ' | ' | |||||||||||||||||||
Subsequent Events | ' | ' | |||||||||||||||||||
Note 12. Subsequent Events | |||||||||||||||||||||
Note 12. Subsequent Events | |||||||||||||||||||||
In November 2013, Holdings amended the Holdings Credit Agreement to, among other things, increase the borrowing base to $525 million. As of November 14, 2013, there were no of outstanding borrowings under the Holdings Credit Agreement. | |||||||||||||||||||||
In January 2013, Athlon increased the borrowing base under the Athlon Credit Agreement to $295 million. | |||||||||||||||||||||
During February 2013, Athlon entered into additional oil swaps. The following table summarizes open commodity derivative contracts as of March 8, 2013: | |||||||||||||||||||||
Period | Average | Weighted- | Average | Weighted- | Average | Weighted- | |||||||||||||||
Daily | Average | Daily | Average | Daily | Average | ||||||||||||||||
Floor | Floor | Cap | Cap | Swap | Swap | ||||||||||||||||
Volume | Price | Volume | Price | Volume | Price | ||||||||||||||||
(Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | ||||||||||||||||
2013 | 150 | $ | 75 | 150 | $ | 105.95 | 5,500 | $ | 94.5 | ||||||||||||
2014 | — | — | — | — | 5,450 | 92.83 | |||||||||||||||
2015 | — | — | — | — | 1,300 | 93.18 | |||||||||||||||
In February 2013, Athlon also entered into basis differential swaps for 5,000 Bbls/D at $1.20/Bbl for March through December 2013. | |||||||||||||||||||||
These financial statements considered subsequent events through March 8, 2013, the date the consolidated financial statements were available to be issued. | |||||||||||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||
Basis of Presentation | ' | ' | |||||||||||||
Principles of Consolidation | ' | ' | |||||||||||||
Principles of Consolidation | |||||||||||||||
Athlon’s consolidated financial statements include the accounts of its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||
Athlon's consolidated financial statements include the accounts of its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||
In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly, in all material respects, Athlon’s financial position as of September 30, 2013, results of operations for the three and nine months ended September 30, 2013 and 2012, and cash flows for the nine months ended September 30, 2013 and 2012. All adjustments are of a normal recurring nature. These interim results are not necessarily indicative of results for an entire year. | |||||||||||||||
Certain amounts and disclosures have been condensed and omitted from the unaudited consolidated financial statements pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Therefore, these unaudited consolidated financial statements should be read in conjunction with Holdings’ audited consolidated financial statements and related notes thereto included in Athlon’s final prospectus dated August 1, 2013 and filed with the SEC pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended, on August 5, 2013. | |||||||||||||||
Use of Estimates | ' | ' | |||||||||||||
Use of Estimates | |||||||||||||||
Preparing financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities in the consolidated financial statements. Although management believes these estimates are reasonable, actual results could differ materially from those estimates. | |||||||||||||||
Estimates made in preparing these consolidated financial statements include, among other things, estimates of the proved oil and natural gas reserve volumes used in calculating depletion, depreciation, and amortization ("DD&A") expense; operating costs accrued; volumes and prices for revenues accrued; valuation of derivative instruments; and the timing and amount of future abandonment costs used in calculating asset retirement obligations. Changes in the assumptions used could have a significant impact on results in future periods. | |||||||||||||||
Cash and Cash Equivalents | ' | ' | |||||||||||||
Cash and Cash Equivalents | |||||||||||||||
Cash and cash equivalents include demand deposits and funds invested in highly liquid instruments with original maturities of three months or less and typically exceed federally insured limits. | |||||||||||||||
The following table sets forth supplemental disclosures of cash flow information for the periods indicated: | |||||||||||||||
Year ended | |||||||||||||||
December 31, | |||||||||||||||
2012 | 2011 | ||||||||||||||
(in thousands) | |||||||||||||||
Cash paid during the period for: | |||||||||||||||
Interest | $ | 8,326 | $ | 2,395 | |||||||||||
Income taxes | — | — | |||||||||||||
Accounts Receivable | ' | ' | |||||||||||||
Accounts Receivable | |||||||||||||||
Accounts receivable, which are primarily from the sale of oil, natural gas, and natural gas liquids ("NGLs"), is accrued based on estimates of the sales and prices Athlon believes it will receive. Athlon routinely reviews outstanding balances, assesses the financial strength of its customers, and records a reserve for amounts not expected to be fully recovered. Actual balances are not applied against the reserve until substantially all collection efforts have been exhausted. At December 31, 2012 and 2011, Athlon had no allowance for doubtful accounts. | |||||||||||||||
Inventory | ' | ' | |||||||||||||
Inventory | |||||||||||||||
Inventory includes materials and supplies that Athlon intends to deploy to various development activities and oil in tanks at the lease, both of which are stated at the lower of cost (determined on an average basis) or market. Oil in tanks at the lease is carried at an amount equal to its costs to produce. Inventory consisted of the following as of the dates indicated: | |||||||||||||||
December 31, | |||||||||||||||
2012 | 2011 | ||||||||||||||
(in thousands) | |||||||||||||||
Materials and supplies | $ | 670 | $ | 371 | |||||||||||
Oil inventory | 352 | 380 | |||||||||||||
Total inventory | $ | 1,022 | $ | 751 | |||||||||||
Oil and Natural Gas Properties | ' | ' | |||||||||||||
Oil and Natural Gas Properties | |||||||||||||||
Athlon applies the provisions of the "Extractive Activities—Oil and Gas" topic of the Financial Accounting Standards Board's (the "FASB") Accounting Standards Codification (the "ASC"). Athlon uses the full cost method of accounting for its oil and natural gas properties. Under this method, costs directly associated with the acquisition, exploration, and development of reserves are capitalized into a full cost pool. Capitalized costs are amortized using a unit-of-production method. Under this method, the provision for DD&A is computed at the end of each period by multiplying total production for the period by a depletion rate. The depletion rate is determined by dividing the total unamortized cost base plus future development costs by net equivalent proved reserves at the beginning of the period. | |||||||||||||||
Costs associated with unproved properties are excluded from the amortizable cost base until a determination has been made as to the existence of proved reserves. Unproved properties are reviewed at the end of each quarter to determine whether the costs incurred should be reclassified to the full cost pool and, thereby, subjected to amortization. The costs associated with unproved properties primarily consist of acquisition and leasehold costs as well as development costs for wells in progress for which a determination of the existence of proved reserves has not been made. These costs are transferred to the amortization base once a determination is made whether or not proved reserves can be assigned to the property, upon impairment of a lease, or immediately upon determination that the well is unsuccessful. Costs of seismic data that cannot be directly associated to specific unproved properties are included in the full cost pool as incurred, otherwise, they are allocated to various unproved leaseholds and transferred to the amortization base with the associated leasehold costs on a specific project basis. | |||||||||||||||
Unevaluated properties are assessed periodically, at least annually, for possible impairment. Properties are assessed on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of various factors, including, but not limited to: intent to drill, remaining lease term, geological and geophysical evaluations, drilling results, and economic viability of development if proved reserves are assigned. During any period in which these factors indicate impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and become subject to amortization. | |||||||||||||||
Under the full cost method of accounting, total capitalized costs of oil and natural gas properties, net of accumulated depletion, less related deferred income taxes may not exceed an amount equal to the present value of future net revenues from proved reserves, discounted at 10% per annum, plus the lower of cost or fair value of unevaluated properties, plus estimated salvage value, less the related tax effects (the "ceiling limitation"). A ceiling limitation is calculated at the end of each quarter. If total capitalized costs, net of accumulated DD&A, less related deferred income taxes are greater than the ceiling limitation, a write-down or impairment of the full cost pool is required. A write-down of the carrying value of the full cost pool is a non-cash charge that reduces earnings and impacts partners' equity in the period of occurrence and typically results in lower DD&A expense in future periods. Once incurred, a write-down cannot be reversed at a later date. | |||||||||||||||
The ceiling limitation calculation is prepared using the 12-month first-day-of-the-month oil and natural gas average prices, as adjusted for basis or location differentials, held constant over the life of the reserves ("net wellhead prices"). If applicable, these net wellhead prices would be further adjusted to include the effects of any fixed price arrangements for the sale of oil and natural gas. Athlon uses commodity derivative contracts to mitigate the risk against the volatility of oil and natural gas prices. Commodity derivative contracts that qualify and are designated as cash flow hedges are included in estimated future cash flows. Athlon has not designated any of its commodity derivative contracts as cash flow hedges and has therefore not included its commodity derivative contracts in estimating future cash flows. The future cash outflows associated with future development or abandonment of wells are included in the computation of the discounted present value of future net revenues for purposes of the ceiling limitation calculation. | |||||||||||||||
Sales and abandonments of oil and natural gas properties being amortized are accounted for as adjustments to the full cost pool, with no gain or loss recognized, unless the adjustments would significantly alter the relationship between capitalized costs and proved reserves. A significant alteration would not ordinarily be expected to occur upon the sale of reserves involving less than 25% of the reserve quantities of a cost center. | |||||||||||||||
Natural gas volumes are converted to barrels of oil equivalent ("BOE") at the rate of six thousand cubic feet ("Mcf") of natural gas to one barrel ("Bbl") of oil. This convention is not an equivalent price basis and there may be a large difference in value between an equivalent volume of oil versus an equivalent volume of natural gas. | |||||||||||||||
Independent petroleum engineers estimate Athlon's proved reserves annually on December 31. This results in a new DD&A rate which Athlon uses for the preceding fourth quarter after adjusting for fourth quarter production. Athlon internally estimates reserve additions and reclassifications of reserves from unproved to proved at the end of the first, second, and third quarters for use in determining a DD&A rate for the respective quarter. | |||||||||||||||
Athlon capitalizes interest on expenditures made in connection with exploration and development projects that are not subject to current amortization. Interest is capitalized only for the period that activities are in progress to bring these projects to their intended use. Capitalized interest cannot exceed gross interest expense. During 2012, Athlon capitalized approximately $0.2 million of interest expense. During 2011, Athlon did not capitalize any interest expense. | |||||||||||||||
Amounts shown in the accompanying Consolidated Balance Sheets as "Proved properties, including wells and related equipment" consisted of the following as of the date indicated: | |||||||||||||||
December 31, | |||||||||||||||
2012 | 2011 | ||||||||||||||
(in thousands) | |||||||||||||||
Proved leasehold costs | $ | 376,271 | $ | 283,302 | |||||||||||
Wells and related equipment—completed | 379,036 | 89,140 | |||||||||||||
Wells and related equipment—in process | 33,264 | 26,763 | |||||||||||||
Total proved properties | $ | 788,571 | $ | 399,205 | |||||||||||
Asset Retirement Obligations | ' | ' | |||||||||||||
Asset Retirement Obligations | |||||||||||||||
Athlon applies the provisions of the "Asset Retirement and Environmental Obligations" topic of the ASC. Athlon has obligations as a result of lease agreements and enacted laws to remove its equipment and restore land at the end of production operations. These asset retirement obligations are primarily associated with plugging and abandoning wells and land remediation. At the time a well is drilled or acquired, Athlon records a separate liability for the estimated fair value of its asset retirement obligations, with an offsetting increase to the related oil and natural gas asset representing asset retirement costs in the accompanying Consolidated Balance Sheets. The cost of the related oil and natural gas asset, including the asset retirement cost, is included in Athlon's full cost pool. The estimated fair value of an asset retirement obligation is the present value of the expected future cash outflows required to satisfy the asset retirement obligations discounted at Athlon's credit-adjusted, risk-free interest rate at the time the liability is incurred. Accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. | |||||||||||||||
Inherent to the present-value calculation are numerous estimates, assumptions, and judgments, including, but not limited to: the ultimate settlement amounts, inflation factors, credit-adjusted risk-free rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions affect the present value of the abandonment liability, Athlon makes corresponding adjustments to both the asset retirement obligation and the related oil and natural gas property asset balance. These revisions result in prospective changes to DD&A expense and accretion of the discounted abandonment liability. Please read "Note 5. Asset Retirement Obligations" for additional information. | |||||||||||||||
Segment Reporting | ' | ' | |||||||||||||
Segment Reporting | |||||||||||||||
Athlon operates in only one industry: the oil and natural gas exploration and production industry in the United States. All revenues are derived from customers located in the United States. | |||||||||||||||
Major Customers / Concentration of Credit Risk | ' | ' | |||||||||||||
Major Customers/Concentration of Credit Risk | |||||||||||||||
The following purchasers accounted for 10% or greater of the sales of production for the periods indicated and the corresponding outstanding accounts receivable balance as of the dates indicated: | |||||||||||||||
Percentage of | Outstanding | ||||||||||||||
Total Revenues | Accounts | ||||||||||||||
for the Year | Receivable Balance | ||||||||||||||
Ended | as of December 31, | ||||||||||||||
December 31, | |||||||||||||||
Purchaser | 2012 | 2011 | 2012 | 2011 | |||||||||||
(in thousands) | |||||||||||||||
Occidental Petroleum Corporation | 29 | % | 58 | % | $ | 4,456 | $ | 5,863 | |||||||
DCP Midstream | 12 | % | 13 | % | 2,604 | 2,716 | |||||||||
Pecos Gathering & Marketing | 43 | % | 13 | % | 9,348 | 3,756 | |||||||||
Income Taxes | ' | ' | |||||||||||||
Income Taxes | |||||||||||||||
Income Taxes | |||||||||||||||
Athlon accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. | |||||||||||||||
Prior to its corporate reorganization, Athlon was treated as a partnership for federal and state income tax purposes with each partner being separately taxed on their share of Athlon's taxable income. Therefore, no provision for current or deferred federal income taxes has been provided for in the accompanying Consolidated Financial Statements. However, Athlon's operations located in Texas are subject to an entity-level tax, the Texas margin tax, at a statutory rate of up to 0.7% of income that is apportioned to Texas. Deferred tax assets and liabilities are recognized for future Texas margin tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective Texas margin tax bases. | |||||||||||||||
Athlon periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets, including net operating losses. In making this determination, Athlon considers all available positive and negative evidence and makes certain assumptions. Athlon considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years. Athlon believes it is more likely than not that certain net operating losses can be carried forward and utilized. | |||||||||||||||
Net income (loss) for financial statement purposes may differ significantly from taxable income reportable to partners as a result of differences between the tax bases and financial reporting bases of assets and liabilities and the taxable income allocation requirements under the partnership agreement. In addition, individual partners have different investment bases depending upon the timing and price of acquisition of their partnership units, and each partner's tax accounting, which is partially dependent upon the partner's tax position, differs from the accounting followed in the accompanying Consolidated Financial Statements. As a result, the aggregate difference in the basis of net assets for financial and tax reporting purposes cannot be readily determined as Athlon does not have access to information about each partner's tax attributes in Holdings. | |||||||||||||||
In April 2013, Athlon had a corporate reorganization to effectuate its IPO. Holdings, Athlon’s accounting predecessor, is a partnership not subject to federal income tax. Pursuant to the steps of the corporate reorganization, certain Class A limited partners and the Class B limited partners of Holdings exchanged their interests for shares of Athlon’s common stock. Athlon’s operations are now subject to federal income tax. The tax implications of the corporate reorganization and the tax impact of the conversion to operating as a taxable entity have been reflected in the accompanying consolidated financial statements. | |||||||||||||||
Athlon performs a periodic evaluation of tax positions to review the appropriate recognition threshold for each tax position recognized in its consolidated financial statements. As of December 31, 2012 and 2011, all of Athlon's tax positions met the "more-likely-than-not" threshold. As a result, no additional tax expense, interest, or penalties have been accrued. | |||||||||||||||
Revenue Recognition | ' | ' | |||||||||||||
Revenue Recognition | |||||||||||||||
Revenues from the sale of oil, natural gas and NGLs are recognized when the production is sold, net of any royalty interest. Because final settlement of Athlon's hydrocarbon sales can take up to two months, the expected sales volumes and prices for those properties are estimated and accrued using information available at the time the revenue is recorded. Natural gas revenues are recorded using the sales method of accounting whereby revenue is recognized based on actual sales of natural gas rather than Athlon's proportionate share of natural gas production. If Athlon's overproduced imbalance position (i.e., Athlon has cumulatively been over-allocated production) is greater than its share of remaining reserves, a liability would be recorded for the excess at period-end prices unless a different price is specified in the contract, in which case that price is used. At December 31, 2012 and 2011, Athlon did not have any natural gas imbalances. Revenue is not recognized for oil production in tanks, but the production is recorded as a current asset based on the cost to produce and included in "Inventory" in the accompanying Consolidated Balance Sheets. Transportation expenses are included in operating expenses and are not material. | |||||||||||||||
Derivatives | ' | ' | |||||||||||||
Derivatives | |||||||||||||||
Athlon uses various financial instruments for non-trading purposes to manage and reduce price volatility and other market risks associated with its oil production. These arrangements are structured to reduce Athlon's exposure to commodity price decreases, but they can also limit the benefit Athlon might otherwise receive from commodity price increases. Athlon's risk management activity is generally accomplished through over-the-counter commodity derivative contracts with large financial institutions, most of which are lenders underwriting Athlon's revolving credit agreement. | |||||||||||||||
Athlon applies the provisions of the "Derivatives and Hedging" topic of the ASC, which requires each derivative instrument to be recorded in the accompanying Consolidated Balance Sheets at fair value. If a derivative has not been designated as a hedge or does not otherwise qualify for hedge accounting, it must be adjusted to fair value through earnings. Athlon elected not to designate its current portfolio of commodity derivative contracts as hedges. Therefore, changes in fair value of these derivative instruments are recognized in earnings and included in "Derivative fair value loss (gain)" in the accompanying Consolidated Statements of Operations. | |||||||||||||||
Athlon enters into commodity derivative contracts for the purpose of economically hedging the price of its anticipated oil production even though Athlon does not designate the derivatives as hedges for accounting purposes. Athlon classifies cash flows related to derivative contracts based on the nature and purpose of the derivative. As the derivative cash flows are considered an integral part of Athlon's oil and natural gas operations, they are classified as cash flows from operating activities in the accompanying Consolidated Statements of Cash Flows. During 2011 and 2012, Athlon entered into commodity derivative contracts all of which were for the purpose of economically hedging its anticipated oil production. | |||||||||||||||
Cash flows relating to commodity derivative contracts that were entered into prior to Athlon commencing oil and natural gas operations in January 2011 are classified as investing activities in the accompanying Consolidated Statements of Cash Flows. | |||||||||||||||
New Accounting Pronouncements | ' | ' | |||||||||||||
New Accounting Pronouncements | |||||||||||||||
New Accounting Pronouncements | |||||||||||||||
In December 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2011-11, “Disclosures about Offsetting Assets and Liabilities” and in January 2013 issued ASU 2013-01, “Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities”. These ASUs created new disclosure requirements regarding the nature of an entity’s rights of setoff and related arrangements associated with its derivative instruments, repurchase agreements, and securities lending transactions. Certain disclosures of the amounts of certain instruments subject to enforceable master netting arrangements are required, irrespective of whether the entity has elected to offset those instruments in the statement of financial position. These ASUs were effective retrospectively for annual reporting periods beginning on or after January 1, 2013. The adoption of these ASUs did not impact Athlon’s financial position, results of operations, or liquidity. | |||||||||||||||
In May 2011, the FASB issued Accounting Standards Update ("ASU") 2011-04, "Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs". ASU 2011-04 amended ASC 820 to converge the fair value measurement guidance in GAAP and International Financial Reporting Standards. Certain of the amendments clarified the application of existing fair value measurement requirements, while other amendments changed a particular principle in ASC 820. In addition, ASU 2011-04 required additional fair value disclosures. The amendments were effective for annual periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on Athlon's financial position, results of operations, or liquidity. | |||||||||||||||
No other new accounting pronouncements issued or effective from January 1, 2013 through the date of this Report, had or are expected to have a material impact on Athlon’s unaudited consolidated financial statements. | |||||||||||||||
In December 2011, the FASB issued ASU 2011-11, "Disclosures about Offsetting Assets and Liabilities" and in January 2013 issued ASU 2013-01, "Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities". These ASUs create new disclosure requirements regarding the nature of an entity's rights of setoff and related arrangements associated with its derivative instruments, repurchase agreements, and securities lending transactions. Certain disclosures of the amounts of certain instruments subject to enforceable master netting arrangements would be required, irrespective of whether the entity has elected to offset those instruments in the statement of financial position. These ASUs are effective retrospectively for annual reporting periods beginning on or after January 1, 2013. The adoption of these ASUs will not impact Athlon's financial position, results of operations, or liquidity. | |||||||||||||||
No other new accounting pronouncements issued or effective during 2012, or in 2013 through the date of this report, had or are expected to have a material impact on Athlon's consolidated financial statements. | |||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Basis of Presentation | ' | ' | ||||||||||||||||||||
Schedule of supplemental disclosures of cash flow information | ' | ' | ||||||||||||||||||||
Year ended | ||||||||||||||||||||||
December 31, | ||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Cash paid during the period for: | ||||||||||||||||||||||
Interest | $ | 8,326 | $ | 2,395 | ||||||||||||||||||
Income taxes | — | — | ||||||||||||||||||||
Schedule of inventory | ' | ' | ||||||||||||||||||||
December 31, | ||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Materials and supplies | $ | 670 | $ | 371 | ||||||||||||||||||
Oil inventory | 352 | 380 | ||||||||||||||||||||
Total inventory | $ | 1,022 | $ | 751 | ||||||||||||||||||
Schedule of proved properties, including wells and related equipment | ' | ' | ||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||
(in thousands) | December 31, | |||||||||||||||||||||
Proved leasehold costs | $ | 411,657 | $ | 376,271 | 2012 | 2011 | ||||||||||||||||
Wells and related equipment - Completed | 634,980 | 379,036 | (in thousands) | |||||||||||||||||||
Wells and related equipment - In process | 38,244 | 33,264 | Proved leasehold costs | $ | 376,271 | $ | 283,302 | |||||||||||||||
Total proved properties | $ | 1,084,881 | $ | 788,571 | Wells and related equipment—completed | 379,036 | 89,140 | |||||||||||||||
Wells and related equipment—in process | 33,264 | 26,763 | ||||||||||||||||||||
Total proved properties | $ | 788,571 | $ | 399,205 | ||||||||||||||||||
Schedule of major customers percentage of total revenues and outstanding accounts receivable balance | ' | ' | ||||||||||||||||||||
Percentage of | Outstanding | |||||||||||||||||||||
Total Revenues | Accounts | |||||||||||||||||||||
for the Year | Receivable Balance | |||||||||||||||||||||
Ended | as of December 31, | |||||||||||||||||||||
December 31, | ||||||||||||||||||||||
Purchaser | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Occidental Petroleum Corporation | 29 | % | 58 | % | $ | 4,456 | $ | 5,863 | ||||||||||||||
DCP Midstream | 12 | % | 13 | % | 2,604 | 2,716 | ||||||||||||||||
Pecos Gathering & Marketing | 43 | % | 13 | % | 9,348 | 3,756 |
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | ||||
Dec. 31, 2012 | |||||
Element | ' | ||||
Acquisitions | ' | ||||
Schedule of allocation of purchase price to the fair value of assets acquired and liabilities assumed | ' | ||||
The allocation of the purchase price to the fair value of the assets acquired and liabilities assumed from Element was as follows (in thousands): | |||||
Proved properties, including wells and related equipment | $ | 130,527 | |||
Unproved properties | 123,107 | ||||
Other assets | 806 | ||||
Total assets acquired | 254,440 | ||||
Current liabilities | 831 | ||||
Asset retirement obligations | 393 | ||||
Total liabilities assumed | 1,224 | ||||
Fair value of net assets acquired | $ | 253,216 | |||
Schedule of unaudited pro forma condensed financial data | ' | ||||
Year ended | |||||
December 31, | |||||
2011 | |||||
(in thousands) | |||||
Pro forma total revenues | $ | 89,618 | |||
Pro forma net income | $ | 9,777 | |||
SandRidge | ' | ||||
Acquisitions | ' | ||||
Schedule of allocation of purchase price to the fair value of assets acquired and liabilities assumed | ' | ||||
The allocation of the purchase price to the fair value of the assets acquired and liabilities assumed from SandRidge was as follows (in thousands): | |||||
Proved properties, including wells and related equipment | $ | 158,157 | |||
Oil inventory | 637 | ||||
Total assets acquired | 158,794 | ||||
Asset retirement obligations | 2,778 | ||||
Fair value of net assets acquired | $ | 156,016 | |||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2012 | |||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||
Summary of the remaining non-cancelable future payments under operating leases | ' | ||||||||||||||||||||||
Athlon leases certain office space that has non-cancelable lease terms in excess of one year. The following table summarizes by year the remaining non-cancelable future payments under these operating leases as of December 31, 2012: | |||||||||||||||||||||||
Payments Due by Period | |||||||||||||||||||||||
Total | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | |||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Corporate office lease | $ | 1,412 | $ | 381 | $ | 375 | $ | 375 | $ | 281 | $ | — | $ | — | |||||||||
Midland office lease | 375 | 90 | 92 | 96 | 97 | — | — | ||||||||||||||||
Total | $ | 1,787 | $ | 471 | $ | 467 | $ | 471 | $ | 378 | $ | — | $ | — | |||||||||
Asset_Retirement_Obligations_T1
Asset Retirement Obligations (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||
Asset Retirement Obligations | ' | ' | |||||||||||
Summary of changes in asset retirement obligations | ' | ' | |||||||||||
The following table summarizes the changes in Athlon’s asset retirement obligations for the nine months ended September 30, 2013 (in thousands): | |||||||||||||
Balance at January 1 | $ | 5,049 | |||||||||||
Liabilities assumed in acquisitions | 335 | ||||||||||||
Liabilities incurred from new wells | 735 | Year Ended | |||||||||||
Liabilities settled | (108 | ) | December 31, | ||||||||||
Accretion of discount | 485 | 2012 | 2011 | ||||||||||
Revisions of previous estimates | 3 | (in thousands) | |||||||||||
Balance at September 30 | 6,499 | Balance at January 1 | $ | 3,704 | $ | — | |||||||
Less: current portion | 60 | Acquisition of properties | 60 | 3,282 | |||||||||
Asset retirement obligations - long-term | $ | 6,439 | Wells drilled | 815 | 166 | ||||||||
Accretion of discount | 478 | 344 | |||||||||||
Revisions of previous estimates | (8 | ) | — | ||||||||||
Plugging and abandonment costs incurred | — | (88 | ) | ||||||||||
Balance at December 31 | $ | 5,049 | $ | 3,704 | |||||||||
LongTerm_Debt_Tables1
Long-Term Debt (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2012 | |||||||||||||||||||||||
Long-term debt | ' | ||||||||||||||||||||||
Schedule of long-term debt maturities | ' | ||||||||||||||||||||||
The following table shows Athlon's long-term debt maturities as of December 31, 2012: | |||||||||||||||||||||||
Payments Due by Period | |||||||||||||||||||||||
Total | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | |||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Athlon Credit Agreement | $ | 237,000 | $ | — | $ | — | $ | — | $ | — | $ | 237,000 | $ | — | |||||||||
Second Lien | 125,000 | — | — | — | — | 125,000 | — | ||||||||||||||||
Total | $ | 362,000 | $ | — | $ | — | $ | — | $ | — | $ | 362,000 | $ | — | |||||||||
Former second lien term loan | ' | ||||||||||||||||||||||
Long-term debt | ' | ||||||||||||||||||||||
Schedule of applicable margin for Eurodollar and base rate loans | ' | ||||||||||||||||||||||
Period | Eurodollar Loans | Base Rate Loans | |||||||||||||||||||||
September 5, 2012 through December 31, 2013 | 6.5 | % | 5.5 | % | |||||||||||||||||||
January 1, 2014 through December 31, 2014 | 6.75 | % | 5.75 | % | |||||||||||||||||||
January 1, 2015 through December 31, 2015 | 7 | % | 6 | % | |||||||||||||||||||
January 1, 2016 and thereafter | 7.25 | % | 6.25 | % | |||||||||||||||||||
Schedule of maximum quantity hedging of projected production from proved developed producing reserves and proved reserves | ' | ||||||||||||||||||||||
The Months Immediately Following Any Date of Determination | Projected Production from | Projected Production | |||||||||||||||||||||
Proved Developed | from Proved Reserves | ||||||||||||||||||||||
Producing Reserves | |||||||||||||||||||||||
1st through the 24th month | 90 | % | 65 | % | |||||||||||||||||||
25th through the 36th month | 85 | % | 50 | % | |||||||||||||||||||
37th and each succeeding month | 85 | % | 0 | % | |||||||||||||||||||
Athlon Credit Agreement | ' | ||||||||||||||||||||||
Long-term debt | ' | ||||||||||||||||||||||
Schedule of applicable margin for Eurodollar and base rate loans | ' | ||||||||||||||||||||||
Ratio of Outstanding Borrowings to Borrowing Base | Applicable Margin for | Applicable Margin for | |||||||||||||||||||||
Eurodollar Loans | Base Rate Loans | ||||||||||||||||||||||
Less than .50 to 1 | 2 | % | 1 | % | |||||||||||||||||||
Greater than or equal to .50 to 1 but less than .75 to 1 | 2.25 | % | 1.25 | % | |||||||||||||||||||
Greater than or equal to .75 to 1 but less than .90 to 1 | 2.5 | % | 1.5 | % | |||||||||||||||||||
Greater than or equal to .90 to 1 | 2.75 | % | 1.75 | % | |||||||||||||||||||
Schedule of maximum quantity hedging of projected production from proved developed producing reserves and proved reserves | ' | ||||||||||||||||||||||
The Months Immediately Following Any Date of Determination | Projected Production from | Projected Production | |||||||||||||||||||||
Proved Developed Producing Reserves | from Proved Reserves | ||||||||||||||||||||||
1st through the 24th month | 90 | % | 65 | % | |||||||||||||||||||
25th through the 36th month | 85 | % | 50 | % | |||||||||||||||||||
37th and each succeeding month | 85 | % | 0 | % |
Equity_Tables
Equity (Tables) | 12 Months Ended | ||||||
Dec. 31, 2012 | |||||||
Stockholders' Equity | ' | ||||||
Schedule of partnership interest | ' | ||||||
The following table shows the partnership interest in Holdings as of December 31, 2012: | |||||||
Partnership | |||||||
Interest | |||||||
Athlon Holdings LLC | General Partner | 0 | % | ||||
Apollo Athlon Holdings LLC | Class A Partner | 97.2 | % | ||||
Management group | Class A Partner | 2.8 | % |
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||
Incentive Stock Plans | ' | ' | |||||||||||||||||||||||||
Schedule of assumptions in calculation of fair value of Class B interests granted using an option pricing model | ' | ' | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||||||
Expected volatility | 47 | % | 44 | % | |||||||||||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||||||||||||||
Expected term (in years) | 1.52 | 1.65 | |||||||||||||||||||||||||
Risk-free interest rate | 0.23 | % | 0.35 | % | |||||||||||||||||||||||
Weighted-average grant date fair value per interest | $ | 128.94 | $ | 134.84 | |||||||||||||||||||||||
Summary of changes in Class B interests | ' | ' | |||||||||||||||||||||||||
Weighted - | |||||||||||||||||||||||||||
Average | |||||||||||||||||||||||||||
Number of | Grant Date | Year Ended December 31, | |||||||||||||||||||||||||
Shares | Fair Value | 2012 | 2011 | ||||||||||||||||||||||||
Outstanding at January 1 | — | $ | — | Number of | Weighted- | Number of | Weighted- | ||||||||||||||||||||
Granted | 623,913 | 32.21 | Class B | Average | Class B | Average | |||||||||||||||||||||
Vested | — | — | Interests | Grant Date | Interests | Grant Date | |||||||||||||||||||||
Forfeited | — | — | Fair Value | Fair Value | |||||||||||||||||||||||
Outstanding at September 30 | 623,913 | 32.21 | Outstanding at beginning of period | 68,662 | $ | 15.93 | 82,153 | $ | — | ||||||||||||||||||
Granted | 2,195 | 128.94 | 9,050 | 134.84 | |||||||||||||||||||||||
Vested | (20,375 | ) | 11.32 | (19,046 | ) | 3.11 | |||||||||||||||||||||
Forfeited | (270 | ) | 140.72 | (3,495 | ) | 19.13 | |||||||||||||||||||||
Outstanding at end of year | 50,212 | 22.07 | 68,662 | 15.93 | |||||||||||||||||||||||
Schedule of expected vesting of Class B interests | ' | ' | |||||||||||||||||||||||||
The following table provides information regarding the expected vesting of Holdings' outstanding Class B interests at December 31, 2012: | |||||||||||||||||||||||||||
Year of Vesting | |||||||||||||||||||||||||||
Year of Grant | 2013 | 2014 | 2015 | 2016 | 2017 | Total | |||||||||||||||||||||
2010 | 18,664 | 14,497 | 8,664 | — | — | 41,825 | |||||||||||||||||||||
2011 | 1,711 | 1,711 | 1,711 | 1,329 | — | 6,462 | |||||||||||||||||||||
2012 | 385 | 385 | 385 | 385 | 385 | 1,925 | |||||||||||||||||||||
Total | 20,760 | 16,593 | 10,760 | 1,714 | 385 | 50,212 | |||||||||||||||||||||
Fair_Value_Measurements_Tables1
Fair Value Measurements (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Summary of open commodity derivative contracts | ' | ' | |||||||||||||||||||||||||||||||||||||||||
The following table summarizes open commodity derivative contracts as of December 31, 2012: | |||||||||||||||||||||||||||||||||||||||||||
Average | Weighted - | Average | Weighted - | Average | Weighted - | Asset | |||||||||||||||||||||||||||||||||||||
Daily | Average | Daily | Average | Daily | Average | (Liability) | |||||||||||||||||||||||||||||||||||||
Floor | Floor | Cap | Cap | Swap | Swap | Fair Market | Period | Average | Weighted- | Average | Weighted- | Average | Weighted- | Asset | |||||||||||||||||||||||||||||
Period | Volume | Price | Volume | Price | Volume | Price | Value | Daily | Average | Daily | Average | Daily | Average | Fair Market | |||||||||||||||||||||||||||||
(Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (in thousands) | Floor | Floor | Cap | Cap | Swap | Swap | Value | ||||||||||||||||||||||||||||||
Oct. - Dec. 2013 | 150 | $ | 75 | 150 | $ | 105.95 | 7,000 | $ | 95.01 | $ | (4,205 | ) | Volume | Price | Volume | Price | Volume | Price | |||||||||||||||||||||||||
2014 | — | — | — | — | 7,950 | 92.67 | (7,532 | ) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (in thousands) | ||||||||||||||||||||||||||||
2015 | — | — | — | — | 1,300 | 93.18 | 2,101 | 2013 | 150 | $ | 75 | 150 | $ | 105.95 | 5,000 | $ | 94.15 | $ | 1,654 | ||||||||||||||||||||||||
$ | (9,636 | ) | 2014 | — | — | — | — | 4,950 | 92.65 | 956 | |||||||||||||||||||||||||||||||||
2015 | — | — | — | — | 800 | 94.86 | 1,379 | ||||||||||||||||||||||||||||||||||||
$ | 3,989 | ||||||||||||||||||||||||||||||||||||||||||
Schedule of committed 10% or greater (in terms of fair market value) of oil derivative contracts in asset positions from counterparties, or their affiliates | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Fair Market Value of | At December 31, 2012, Athlon had committed 10% or greater (in terms of fair market value) of its oil derivative contracts in asset positions from the following counterparties: | ||||||||||||||||||||||||||||||||||||||||||
Oil Derivative | |||||||||||||||||||||||||||||||||||||||||||
Contracts | |||||||||||||||||||||||||||||||||||||||||||
Counterparty | Committed | Counterparty | Fair Market Value of | ||||||||||||||||||||||||||||||||||||||||
(in thousands) | Oil Derivative | ||||||||||||||||||||||||||||||||||||||||||
BNP Paribas | $ | 458 | Contracts | ||||||||||||||||||||||||||||||||||||||||
Committed | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
BNP Paribas | $ | 3,660 | |||||||||||||||||||||||||||||||||||||||||
Royal Bank of Canada | 711 | ||||||||||||||||||||||||||||||||||||||||||
Scotiabank | 617 | ||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of derivative instruments not designated as hedging instruments | ' | ' | |||||||||||||||||||||||||||||||||||||||||
The following table summarizes the fair value of Athlon's derivative instruments as of the dates indicated (in thousands): | |||||||||||||||||||||||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
Balance Sheet | December 31, | December 31, | Balance Sheet | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||
Location | 2012 | 2011 | Location | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||||
Derivatives not designated as hedges | |||||||||||||||||||||||||||||||||||||||||||
Commodity derivative contracts | Derivatives—current | $ | 2,246 | $ | — | Derivatives—current | $ | 592 | $ | 5,908 | |||||||||||||||||||||||||||||||||
Commodity derivative contracts | Derivatives—noncurrent | 2,854 | 2,503 | Derivatives—noncurrent | 519 | 2,554 | |||||||||||||||||||||||||||||||||||||
Total derivatives not designated as hedges | $ | 5,100 | $ | 2,503 | $ | 1,111 | $ | 8,462 | |||||||||||||||||||||||||||||||||||
Schedule of effect of derivative instruments not designated as hedges on accompanying consolidated statements of operation | ' | ' | |||||||||||||||||||||||||||||||||||||||||
The following table summarizes the effect of derivative instruments not designated as hedges on the accompanying Consolidated Statements of Operations for the periods indicated (in thousands): | |||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the effect of derivative instruments not designated as hedges on the accompanying Consolidated Statements of Operations for the periods indicated (in thousands): | |||||||||||||||||||||||||||||||||||||||||||
Amount of Loss (Gain) Recognized in Income | |||||||||||||||||||||||||||||||||||||||||||
Location of Loss (Gain) | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||||||
Derivatives Not Designated as Hedges | Recognized in Income | 2013 | 2012 | 2013 | 2012 | Amount of Loss | |||||||||||||||||||||||||||||||||||||
Commodity derivative contracts | Derivative fair value loss (gain) | $ | 27,037 | $ | 14,268 | $ | 21,331 | $ | (9,590 | ) | (Gain) Recognized | ||||||||||||||||||||||||||||||||
in Income | |||||||||||||||||||||||||||||||||||||||||||
Year ended | |||||||||||||||||||||||||||||||||||||||||||
Location of Loss (Gain) | December 31, | ||||||||||||||||||||||||||||||||||||||||||
Derivatives Not Designated as Hedges | Recognized in Income | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||||||
Commodity derivative contracts | Derivative fair value loss (gain) | $ | (9,293 | ) | $ | 7,959 | |||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities accounted for at fair value on a recurring basis | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||||||||||||||||
Quoted Prices in | |||||||||||||||||||||||||||||||||||||||||||
Active Markets for | Significant Other | Significant | Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||||||||||||||||||||||
Identical Assets | Observable Inputs | Unobservable Inputs | Description | Asset (liability), net | Quoted Prices in | Significant Other | Significant | ||||||||||||||||||||||||||||||||||||
Description | Asset (liability), net | (Level 1) | (Level 2) | (Level 3) | Active Markets for | Observable Inputs | Unobservable Inputs | ||||||||||||||||||||||||||||||||||||
(in thousands) | Identical Assets | (Level 2) | (Level 3) | ||||||||||||||||||||||||||||||||||||||||
As of September 30, 2013 | (Level 1) | ||||||||||||||||||||||||||||||||||||||||||
Oil derivative contracts - swaps | $ | (9,622 | ) | $ | — | $ | (9,622 | ) | $ | — | (in thousands) | ||||||||||||||||||||||||||||||||
Oil derivative contracts - basis differential swaps | (330 | ) | — | (330 | ) | — | As of December 31, 2012 | ||||||||||||||||||||||||||||||||||||
Oil derivative contracts - collars | (14 | ) | — | (14 | ) | — | Oil derivative contracts—swaps | $ | 4,069 | $ | — | $ | 4,069 | $ | — | ||||||||||||||||||||||||||||
Total | $ | (9,966 | ) | $ | — | $ | (9,966 | ) | $ | — | Oil derivative contracts—collars and puts | (80 | ) | — | (80 | ) | — | ||||||||||||||||||||||||||
As of December 31, 2012 | Total | $ | 3,989 | $ | — | $ | 3,989 | $ | — | ||||||||||||||||||||||||||||||||||
Oil derivative contracts - swaps | $ | 4,069 | $ | — | $ | 4,069 | $ | — | |||||||||||||||||||||||||||||||||||
Oil derivative contracts - collars | (80 | ) | — | (80 | ) | — | As of December 31, 2011 | ||||||||||||||||||||||||||||||||||||
Total | $ | 3,989 | $ | — | $ | 3,989 | $ | — | Oil derivative contracts—swaps | $ | (5,392 | ) | $ | — | $ | (5,392 | ) | $ | — | ||||||||||||||||||||||||
Oil derivative contracts—collars and puts | (567 | ) | — | — | (567 | ) | |||||||||||||||||||||||||||||||||||||
Total | $ | (5,959 | ) | $ | — | $ | (5,392 | ) | $ | (567 | ) | ||||||||||||||||||||||||||||||||
Schedule of changes in the fair value of assets and liabilities that were previously classified as Level 3 | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||
Using Significant | |||||||||||||||||||||||||||||||||||||||||||
Unobservable Inputs (Level 3) | |||||||||||||||||||||||||||||||||||||||||||
Oil Derivative | |||||||||||||||||||||||||||||||||||||||||||
Contracts— | |||||||||||||||||||||||||||||||||||||||||||
Collars and Puts | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2011 | $ | 7,475 | |||||||||||||||||||||||||||||||||||||||||
Total gains (losses): | |||||||||||||||||||||||||||||||||||||||||||
Included in earnings | (461 | ) | |||||||||||||||||||||||||||||||||||||||||
Monetization of put options | (7,625 | ) | |||||||||||||||||||||||||||||||||||||||||
Purchases (premiums paid) | 44 | ||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2011 | (567 | ) | |||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 | 567 | ||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2012 | $ | — | |||||||||||||||||||||||||||||||||||||||||
Earnings_Per_Share_Tables1
Earnings Per Share (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Earnings Per Share | ' | ' | ||||||||||||||||||||
Schedule of allocation of net income (loss) to common stockholders and earnings per share (EPS) computations | ' | ' | ||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
(in thousands, except per share amounts) | Year ended | |||||||||||||||||||||
Basic EPS | December 31, | |||||||||||||||||||||
Numerator: | 2012 | 2011 | ||||||||||||||||||||
Undistributed net income (loss) attributable to stockholders | $ | 2,482 | $ | (2,096 | ) | $ | 37,058 | $ | 42,508 | (in thousands, except | ||||||||||||
Participation rights of unvested RSUs in undistributed earnings | (6 | ) | — | (6 | ) | — | per share amounts) | |||||||||||||||
Basic undistributed net income (loss) attributable to stockholders | $ | 2,476 | $ | (2,096 | ) | $ | 37,052 | $ | 42,508 | Basic EPS | ||||||||||||
Denominator: | Numerator: | |||||||||||||||||||||
Basic weighted average shares outstanding | 76,637 | 66,340 | 69,810 | 66,340 | Basic undistributed net income (loss) attributable to stockholders | $ | 53,014 | $ | (1,129 | ) | ||||||||||||
Basic EPS attributable to stockholders | $ | 0.03 | $ | (0.03 | ) | $ | 0.53 | $ | 0.64 | |||||||||||||
Denominator: | ||||||||||||||||||||||
Diluted EPS | Basic weighted average shares outstanding | 66,340 | 66,340 | |||||||||||||||||||
Numerator: | ||||||||||||||||||||||
Undistributed net income (loss) attributable to stockholders | $ | 2,482 | $ | (2,096 | ) | $ | 37,058 | $ | 42,508 | Basic EPS attributable to stockholders | $ | 0.8 | $ | (0.02 | ) | |||||||
Participation rights of unvested RSUs in undistributed earnings | (6 | ) | — | (6 | ) | — | ||||||||||||||||
Effect of conversion of New Holdings Units to shares of Athlon’s common stock | (215 | ) | — | 616 | — | Diluted EPS | ||||||||||||||||
Diluted undistributed net income (loss) attributable to stockholders | $ | 2,261 | $ | (2,096 | ) | $ | 37,668 | $ | 42,508 | Numerator: | ||||||||||||
Denominator: | Diluted undistributed net income (loss) attributable to stockholders | $ | 53,014 | $ | (1,129 | ) | ||||||||||||||||
Basic weighted average shares outstanding | 76,637 | 66,340 | 69,810 | 66,340 | ||||||||||||||||||
Effect of conversion of New Holdings Units to shares of Athlon’s common stock (a) | 1,856 | — | 1,856 | 1,856 | Denominator: | |||||||||||||||||
Diluted weighted average shares outstanding | 78,493 | 66,340 | 71,666 | 68,196 | Basic weighted average shares outstanding | 66,340 | 66,340 | |||||||||||||||
Diluted EPS attributable to stockholders | $ | 0.03 | $ | (0.03 | ) | $ | 0.53 | $ | 0.62 | Effect of conversion of New Holdings Units to shares of Athlon's common stock(a) | 1,856 | — | ||||||||||
(a) For the three months ended September 30, 2012, 1,855,563 New Holdings Units were outstanding but excluded from the EPS calculations because their effect would have been antidilutive. | Diluted weighted average shares outstanding | 68,196 | 66,340 | |||||||||||||||||||
Diluted EPS attributable to stockholders | $ | 0.78 | $ | (0.02 | ) | |||||||||||||||||
(a) | ||||||||||||||||||||||
For 2011, 1,855,563 New Holdings Units were outstanding but excluded from the EPS calculations because their effect would have been antidilutive. | ||||||||||||||||||||||
Subsequent_Events_Tables
Subsequent Events (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
Subsequent events | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Summary of open commodity derivative contracts | ' | ' | |||||||||||||||||||||||||||||||||||||||||
The following table summarizes open commodity derivative contracts as of December 31, 2012: | |||||||||||||||||||||||||||||||||||||||||||
Average | Weighted - | Average | Weighted - | Average | Weighted - | Asset | |||||||||||||||||||||||||||||||||||||
Daily | Average | Daily | Average | Daily | Average | (Liability) | |||||||||||||||||||||||||||||||||||||
Floor | Floor | Cap | Cap | Swap | Swap | Fair Market | Period | Average | Weighted- | Average | Weighted- | Average | Weighted- | Asset | |||||||||||||||||||||||||||||
Period | Volume | Price | Volume | Price | Volume | Price | Value | Daily | Average | Daily | Average | Daily | Average | Fair Market | |||||||||||||||||||||||||||||
(Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (in thousands) | Floor | Floor | Cap | Cap | Swap | Swap | Value | ||||||||||||||||||||||||||||||
Oct. - Dec. 2013 | 150 | $ | 75 | 150 | $ | 105.95 | 7,000 | $ | 95.01 | $ | (4,205 | ) | Volume | Price | Volume | Price | Volume | Price | |||||||||||||||||||||||||
2014 | — | — | — | — | 7,950 | 92.67 | (7,532 | ) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (in thousands) | ||||||||||||||||||||||||||||
2015 | — | — | — | — | 1,300 | 93.18 | 2,101 | 2013 | 150 | $ | 75 | 150 | $ | 105.95 | 5,000 | $ | 94.15 | $ | 1,654 | ||||||||||||||||||||||||
$ | (9,636 | ) | 2014 | — | — | — | — | 4,950 | 92.65 | 956 | |||||||||||||||||||||||||||||||||
2015 | — | — | — | — | 800 | 94.86 | 1,379 | ||||||||||||||||||||||||||||||||||||
$ | 3,989 | ||||||||||||||||||||||||||||||||||||||||||
Subsequent events | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Subsequent events | ' | ' | |||||||||||||||||||||||||||||||||||||||||
Summary of open commodity derivative contracts | ' | ' | |||||||||||||||||||||||||||||||||||||||||
The following table summarizes open commodity derivative contracts as of March 8, 2013: | |||||||||||||||||||||||||||||||||||||||||||
Period | Average | Weighted- | Average | Weighted- | Average | Weighted- | |||||||||||||||||||||||||||||||||||||
Daily | Average | Daily | Average | Daily | Average | ||||||||||||||||||||||||||||||||||||||
Floor | Floor | Cap | Cap | Swap | Swap | ||||||||||||||||||||||||||||||||||||||
Volume | Price | Volume | Price | Volume | Price | ||||||||||||||||||||||||||||||||||||||
(Bbl) | (per Bbl) | (Bbl) | (per Bbl) | (Bbl) | (per Bbl) | ||||||||||||||||||||||||||||||||||||||
2013 | 150 | $ | 75 | 150 | $ | 105.95 | 5,500 | $ | 94.5 | ||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | 5,450 | 92.83 | |||||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | 1,300 | 93.18 |
Formation_of_the_Company_and_D3
Formation of the Company and Description of Business (Details) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Aug. 07, 2013 | Sep. 30, 2013 | Apr. 30, 2013 | Aug. 07, 2013 | Aug. 07, 2013 | Aug. 07, 2013 |
Athlon Energy Inc | Athlon Energy Inc | Subsequent events | Subsequent events | |||
Athlon Energy Inc | Class A limited partners | |||||
Athlon Energy Inc | ||||||
Initial public offering | ' | ' | ' | ' | ' | ' |
Shares of common stock issued in IPO | 15,789,474 | ' | ' | ' | 15,789,474 | ' |
Per share price (in dollars per share) | $20 | ' | ' | $20 | $20 | ' |
Net proceeds from IPO, after deducting underwriting discounts and commissions and offering expenses (in dollars) | $295,600 | $296,044 | ' | ' | $295,600 | ' |
Exchange Agreement Number of New Units Exchangeable Against Limited Partner Interest | ' | ' | ' | ' | ' | 1,855,563 |
Number of common stock exchangeable against each unit | ' | ' | 1 | ' | 1 | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | |
item | |||
Cash paid during the period for: | ' | ' | ' |
Interest | $8,326,000 | $2,395,000 | ' |
Income taxes | 0 | 0 | ' |
Accounts Receivable | ' | ' | ' |
Allowance for doubtful accounts receivable | 0 | 0 | ' |
Inventory | ' | ' | ' |
Materials and supplies | 670,000 | 371,000 | ' |
Oil inventory | 352,000 | 380,000 | ' |
Total inventory | 1,022,000 | 751,000 | 972,000 |
Oil and Natural Gas Properties | ' | ' | ' |
Discount rate (as a percent) | 10.00% | ' | ' |
Period used in calculation of ceiling limitation | '12 months | ' | ' |
Gain or loss recognized on sales and abandonments of oil and natural gas properties | 0 | ' | ' |
Minimum percentage of sale of proved reserve quantities for significant alteration | 25.00% | ' | ' |
Interest expense capitalized | 200,000 | ' | ' |
Proved properties, including wells and related equipment | ' | ' | ' |
Proved leasehold costs | 376,271,000 | 283,302,000 | 411,657,000 |
Wells and related equipment - completed | 379,036,000 | 89,140,000 | 634,980,000 |
Wells and related equipment - in process | 33,264,000 | 26,763,000 | 38,244,000 |
Total proved properties | 788,571,000 | 399,205,000 | 1,084,881,000 |
Segment Reporting | ' | ' | ' |
Number of industries in which the entity operates | 1 | ' | ' |
Major Customers / Concentration of Credit Risk | ' | ' | ' |
Outstanding accounts receivable | 24,501,000 | 17,181,000 | 45,851,000 |
Revenues | Purchaser | Occidental Petroleum Corporation | ' | ' | ' |
Major Customers / Concentration of Credit Risk | ' | ' | ' |
Percentage of total revenues | 29.00% | 58.00% | ' |
Revenues | Purchaser | DCP Midstream | ' | ' | ' |
Major Customers / Concentration of Credit Risk | ' | ' | ' |
Percentage of total revenues | 12.00% | 13.00% | ' |
Revenues | Purchaser | Pecos Gathering & Marketing | ' | ' | ' |
Major Customers / Concentration of Credit Risk | ' | ' | ' |
Percentage of total revenues | 43.00% | 13.00% | ' |
Accounts Receivable | Purchaser | Occidental Petroleum Corporation | ' | ' | ' |
Major Customers / Concentration of Credit Risk | ' | ' | ' |
Outstanding accounts receivable | 4,456,000 | 5,863,000 | ' |
Accounts Receivable | Purchaser | DCP Midstream | ' | ' | ' |
Major Customers / Concentration of Credit Risk | ' | ' | ' |
Outstanding accounts receivable | 2,604,000 | 2,716,000 | ' |
Accounts Receivable | Purchaser | Pecos Gathering & Marketing | ' | ' | ' |
Major Customers / Concentration of Credit Risk | ' | ' | ' |
Outstanding accounts receivable | $9,348,000 | $3,756,000 | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Income Taxes | ' | ' |
Provision for current or deferred federal income taxes | $0 | $0 |
Accrued tax expense | 0 | 0 |
Accrued interest and penalties | $0 | $0 |
Revenue Recognition | ' | ' |
Maximum period for final settlement of hydrocarbon sales | '2 months | ' |
Texas | Maximum | ' | ' |
Income Taxes | ' | ' |
Statutory income tax rate (as a percent) | 0.70% | ' |
Acquisitions_Details
Acquisitions (Details) (USD $) | 1 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | |||||
Dec. 31, 2012 | Oct. 31, 2011 | Jan. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 03, 2011 | Oct. 03, 2011 | Jan. 06, 2011 | Jan. 06, 2011 | |
Apollo | Apollo | Apollo | Cobra | Cobra | Element | Element | Element | SandRidge | SandRidge | |
Athlon FE | Athlon SG | Athlon FE | Apollo | Athlon FE | Apollo | Athlon SG | Apollo | |||
Athlon FE | Athlon FE | Athlon SG | ||||||||
Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash paid for acquisition | ' | ' | ' | $48,300,000 | ' | ' | $253,200,000 | ' | $156,000,000 | ' |
Capital contribution | 40,000,000 | ' | ' | ' | 40,000,000 | ' | ' | ' | ' | ' |
Transaction costs incurred | ' | 4,300,000 | 2,300,000 | ' | ' | ' | 6,400,000 | 4,300,000 | 2,600,000 | 2,300,000 |
Allocation of the purchase price to the fair value of the assets acquired and liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proved properties, including wells and related equipment | ' | ' | ' | ' | ' | ' | 130,527,000 | ' | 158,157,000 | ' |
Unproved properties | ' | ' | ' | ' | ' | ' | 123,107,000 | ' | ' | ' |
Other assets | ' | ' | ' | ' | ' | ' | 806,000 | ' | ' | ' |
Oil inventory | ' | ' | ' | ' | ' | ' | ' | ' | 637,000 | ' |
Total assets acquired | ' | ' | ' | ' | ' | ' | 254,440,000 | ' | 158,794,000 | ' |
Current liabilities | ' | ' | ' | ' | ' | ' | 831,000 | ' | ' | ' |
Asset retirement obligations | ' | ' | ' | ' | ' | ' | 393,000 | ' | 2,778,000 | ' |
Total liabilities assumed | ' | ' | ' | ' | ' | ' | 1,224,000 | ' | ' | ' |
Fair value of net assets acquired | ' | ' | ' | ' | ' | ' | 253,216,000 | ' | 156,016,000 | ' |
Pro Formas | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pro forma total revenues | ' | ' | ' | ' | ' | 89,618,000 | ' | ' | ' | ' |
Pro forma net income | ' | ' | ' | ' | ' | $9,777,000 | ' | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Operating leases, payments due by period | ' | ' |
Total | $1,787,000 | ' |
2013 | 471,000 | ' |
2014 | 467,000 | ' |
2015 | 471,000 | ' |
2016 | 378,000 | ' |
Operating lease rental expense | 507,000 | 272,000 |
Minimum | ' | ' |
Leases | ' | ' |
Non-cancelable lease terms | '1 year | ' |
Corporate office lease | ' | ' |
Operating leases, payments due by period | ' | ' |
Total | 1,412,000 | ' |
2013 | 381,000 | ' |
2014 | 375,000 | ' |
2015 | 375,000 | ' |
2016 | 281,000 | ' |
Midland office lease | ' | ' |
Operating leases, payments due by period | ' | ' |
Total | 375,000 | ' |
2013 | 90,000 | ' |
2014 | 92,000 | ' |
2015 | 96,000 | ' |
2016 | $97,000 | ' |
Asset_Retirement_Obligations_D1
Asset Retirement Obligations (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Asset retirement obligations | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | $5,049 | $3,704 | $3,704 | ' |
Acquisition of properties | ' | ' | 335 | ' | 60 | 3,282 |
Wells drilled | ' | ' | 735 | ' | 815 | 166 |
Accretion of discount | 174 | 123 | 485 | 343 | 478 | 344 |
Revisions of previous estimates | ' | ' | 3 | ' | -8 | ' |
Plugging and abandonment costs incurred | ' | ' | -108 | ' | ' | -88 |
Balance at the end of the period | $6,439 | ' | $6,439 | ' | $5,049 | $3,704 |
LongTerm_Debt_Details1
Long-Term Debt (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 05, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | |
Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Former second lien term loan | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | Athlon Credit Agreement | |||
Maximum | Minimum | 1st through the 24th month | 25th through the 36th month | 37th and each succeeding month | Applicable Margin for Eurodollar Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | September 5, 2012 through December 31, 2013 | September 5, 2012 through December 31, 2013 | January 1, 2014 through December 31, 2014 | January 1, 2014 through December 31, 2014 | January 1, 2015 through December 31, 2015 | January 1, 2015 through December 31, 2015 | January 1, 2015 through December 31, 2015 | January 1, 2016 and thereafter | January 1, 2016 and thereafter | Maximum | Minimum | Less than .50 to 1 | Greater than or equal to .50 to 1 but less than .75 to 1 | Greater than or equal to .50 to 1 but less than .75 to 1 | Greater than or equal to .75 to 1 but less than .90 to 1 | Greater than or equal to .75 to 1 but less than .90 to 1 | Greater than or equal to .90 to 1 | 1st through the 24th month | 25th through the 36th month | 37th and each succeeding month | Applicable Margin for Eurodollar Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Base Rate Loans | ||||||
Eurodollar rate | LIBOR | Base Rate | Prime rate | Federal funds rate | LIBOR | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans | Maximum | Maximum | Minimum | Maximum | Minimum | Minimum | Eurodollar rate | Base Rate | LIBOR | Less than .50 to 1 | Greater than or equal to .50 to 1 but less than .75 to 1 | Greater than or equal to .75 to 1 but less than .90 to 1 | Greater than or equal to .90 to 1 | Prime rate | Federal funds rate | One-month Eurodollar rate | LIBOR | Less than .50 to 1 | Greater than or equal to .50 to 1 but less than .75 to 1 | Greater than or equal to .75 to 1 but less than .90 to 1 | Greater than or equal to .90 to 1 | |||||||||||||||||
Long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate amount of term loans | ' | ' | ' | $125,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding loans | 362,000,000 | ' | 125,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 237,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reduction in borrowing base (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threshold borrowings under the Second Lien considered for determination of reduction in the borrowing base | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum amount committed by lender | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 700,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current borrowing base | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 275,000,000 | 245,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 237,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining borrowing base | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 38,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding letters of credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment Fee (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ratio of Outstanding Borrowings to Borrowing Base | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.5 | 0.75 | 0.5 | 0.9 | 0.75 | 0.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Applicable Margin (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | 1.00% | 6.50% | 5.50% | 6.75% | 5.75% | ' | 7.00% | 6.00% | 7.25% | 6.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | 2.25% | 2.50% | 2.75% | ' | 0.50% | 1.00% | ' | 1.00% | 1.25% | 1.50% | 1.75% |
Variable interest rate base | ' | ' | ' | ' | ' | ' | ' | ' | 'Eurodollar rate | 'LIBOR | 'Base Rate | 'prime rate | 'Federal fund | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Eurodollar rate | 'Base Rate | 'LIBOR | ' | ' | ' | ' | 'prime rate | 'Federal fund | 'Eurodollar rate | 'LIBOR | ' | ' | ' | ' |
Constant rate used in denominator calculation of Eurodollar rate | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pre-payment fee percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Projected Production from Proved Developed Producing Reserves (as a percent) | ' | ' | ' | ' | ' | 90.00% | 85.00% | 85.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90.00% | 85.00% | 85.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Projected Production from Proved Reserves (as a percent) | ' | ' | ' | ' | ' | 65.00% | 50.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 65.00% | 50.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current ratio | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated funded debt to consolidated Adjusted EBITDA ratio | ' | ' | ' | 4.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ratio of present value of total proved reserves discounted at 10% to consolidated funded debt | ' | ' | ' | ' | 1.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate (as a percent) | 10.00% | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-Term Debt Maturities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | 362,000,000 | ' | 125,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 237,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | $362,000,000 | ' | $125,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $237,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average interest rate (as a percent) | 4.30% | 3.80% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity_Details
Equity (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2012 |
Apollo Athlon Holdings LLC | ' |
Equity | ' |
Remaining capital commitments | 38,100 |
Management group | ' |
Equity | ' |
Remaining capital commitments | 0 |
Athlon Holdings LLC | ' |
Equity | ' |
General partner ownership interest (as a percent) | 0.00% |
Class A Partner | Apollo Athlon Holdings LLC | ' |
Equity | ' |
Class A Partner ownership interest (as a percent) | 97.20% |
Class A Partner | Management group | ' |
Equity | ' |
Class A Partner ownership interest (as a percent) | 2.80% |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 9 Months Ended | 12 Months Ended | 36 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | |
401(k) Plan | ' | ' | ' | ' | ' | ' |
Employers contributions | ' | ' | $454,000 | $219,000 | ' | ' |
Class B Limited Partner Interests | ' | ' | ' | ' | ' | ' |
Non-cash equity-based compensation expense | 1,799,000 | 118,000 | 152,000 | 106,000 | ' | ' |
Capitalized non-cash equity-based compensation expense | ' | ' | 93,000 | ' | ' | ' |
Class A limited partners | ' | ' | ' | ' | ' | ' |
Class B Limited Partner Interests | ' | ' | ' | ' | ' | ' |
Compounded interest entitled by limited partners (as a percent) | ' | ' | 8.00% | ' | ' | ' |
Share in remainder of net profit after distributing Class A preference amount (as a percent) | ' | ' | 80.00% | ' | ' | ' |
Class B limited partners | ' | ' | ' | ' | ' | ' |
Class B Limited Partner Interests | ' | ' | ' | ' | ' | ' |
Share in remainder of net profit after distributing Class A preference amount (as a percent) | ' | ' | 20.00% | ' | ' | ' |
Total number of Class B interests that may be issued pursuant to the partnership agreement (in shares) | ' | ' | 100,000 | ' | ' | 100,000 |
Class B interests available for issuance (in shares) | ' | ' | 6,200 | ' | ' | 6,200 |
Non-cash equity-based compensation expense | 1,300,000 | 186,000 | 152,000 | 106,000 | ' | ' |
Capitalized non-cash equity-based compensation expense | 421,000 | 68,000 | ' | ' | ' | ' |
Fair value assumptions of Class B interest granted | ' | ' | ' | ' | ' | ' |
Expected volatility (as a percent) | ' | ' | 47.00% | 44.00% | ' | ' |
Expected dividend yield (as a percent) | ' | ' | 0.00% | 0.00% | ' | ' |
Expected term (in years) | ' | ' | '1 year 6 months 7 days | '1 year 7 months 24 days | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | 0.23% | 0.35% | ' | ' |
Weighted-average grant date fair value per interest (in dollars per share) | ' | ' | $128.94 | $134.84 | ' | ' |
Number of Class B Interests | ' | ' | ' | ' | ' | ' |
Outstanding at beginning of period | 50,212 | 68,662 | 68,662 | 82,153 | ' | ' |
Granted (in shares) | ' | ' | 2,195 | 9,050 | ' | ' |
Vested (in shares) | ' | ' | -20,375 | -19,046 | ' | ' |
Forfeited (in shares) | ' | ' | -270 | -3,495 | ' | ' |
Outstanding at ending of period | ' | ' | 50,212 | 68,662 | 82,153 | 50,212 |
Weighted - Average Grant Date Fair Value | ' | ' | ' | ' | ' | ' |
Outstanding at beginning of period | $22.07 | $15.93 | $15.93 | ' | ' | ' |
Granted (in dollars per share) | ' | ' | $128.94 | $134.84 | ' | ' |
Vested (in dollars per share) | ' | ' | $11.32 | $3.11 | ' | ' |
Forfeited (in dollars per share) | ' | ' | $140.72 | $19.13 | ' | ' |
Outstanding at the end of the period | ' | ' | $22.07 | $15.93 | ' | $22.07 |
Expected vesting of awards | ' | ' | ' | ' | ' | ' |
Vesting of awards in 2013 (in shares) | ' | ' | 385 | 1,711 | 18,664 | 20,760 |
Vesting of awards in 2014 (in shares) | ' | ' | 385 | 1,711 | 14,497 | 16,593 |
Vesting of awards in 2015 (in shares) | ' | ' | 385 | 1,711 | 8,664 | 10,760 |
Vesting of awards in 2016 (in shares) | ' | ' | 385 | 1,329 | ' | 1,714 |
Vesting of awards in 2017 (in shares) | ' | ' | 385 | ' | ' | 385 |
Total vesting of awards (in shares) | ' | ' | 1,925 | 6,462 | 41,825 | 50,212 |
Additional disclosure | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation cost related to unvested RSUs | ' | ' | 1,000,000 | ' | ' | 1,000,000 |
Weighted-average period for recognition of unrecognized compensation cost | ' | ' | '3 years 8 months 12 days | ' | ' | ' |
Awards vested | ' | ' | 20,375 | 19,046 | ' | ' |
Total fair value of awards vested | ' | ' | $231,000 | $59,000 | ' | ' |
Class B limited partners | Minimum | ' | ' | ' | ' | ' | ' |
Class B Limited Partner Interests | ' | ' | ' | ' | ' | ' |
Vesting period of Class B interest | ' | ' | '4 years | ' | ' | ' |
Class B limited partners | Maximum | ' | ' | ' | ' | ' | ' |
Class B Limited Partner Interests | ' | ' | ' | ' | ' | ' |
Vesting period of Class B interest | ' | ' | '5 years | ' | ' | ' |
Fair_Value_Measurements_Detail6
Fair Value Measurements (Details) (USD $) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2011 | Jan. 31, 2011 | Aug. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Summary of open commodity derivative contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from monetization of put options | ' | $7,600,000 | ' | ' | ' | ' | ' | ' | $7,625,000 |
Interest expense | ' | ' | 200,000 | 10,039,000 | 2,602,000 | 26,595,000 | 5,804,000 | 9,949,000 | 2,932,000 |
Initial payment of premiums | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Open commodity derivative contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of open commodity derivative contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset Fair Market Value | ' | ' | ' | ' | ' | ' | ' | 3,989,000 | ' |
Open commodity derivative contracts | 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of open commodity derivative contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset Fair Market Value | ' | ' | ' | ' | ' | ' | ' | 1,654,000 | ' |
Open commodity derivative contracts | 2014 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of open commodity derivative contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset Fair Market Value | ' | ' | ' | ' | ' | ' | ' | 956,000 | ' |
Open commodity derivative contracts | 2015 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of open commodity derivative contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset Fair Market Value | ' | ' | ' | ' | ' | ' | ' | $1,379,000 | ' |
Commodity derivative contracts with floor price | 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of open commodity derivative contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average Daily Volume | ' | ' | ' | ' | ' | ' | ' | 150 | ' |
Weighted-Average Floor Price | ' | ' | ' | ' | ' | ' | ' | 75 | ' |
Commodity derivative contracts with cap price | 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of open commodity derivative contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average Daily Volume | ' | ' | ' | ' | ' | ' | ' | 150 | ' |
Weighted-Average Cap Price | ' | ' | ' | ' | ' | ' | ' | 105.95 | ' |
Commodity derivative contracts with swap price | 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of open commodity derivative contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average Daily Volume | ' | ' | ' | ' | ' | ' | ' | 5,000 | ' |
Weighted-Average Swap Price | ' | ' | ' | ' | ' | ' | ' | 94.15 | ' |
Commodity derivative contracts with swap price | 2014 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of open commodity derivative contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average Daily Volume | ' | ' | ' | 7,950 | ' | 7,950 | ' | 4,950 | ' |
Weighted-Average Swap Price | ' | ' | ' | 92.67 | ' | 92.67 | ' | 92.65 | ' |
Commodity derivative contracts with swap price | 2015 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of open commodity derivative contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average Daily Volume | ' | ' | ' | 1,300 | ' | 1,300 | ' | 800 | ' |
Weighted-Average Swap Price | ' | ' | ' | 93.18 | ' | 93.18 | ' | 94.86 | ' |
Fair_Value_Measurements_Detail7
Fair Value Measurements (Details 2) (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 |
item | Master netting agreements | Master netting agreements | Master netting agreements | Master netting agreements | |
BNP Paribas | BNP Paribas | Royal Bank of Canada | Scotiabank | ||
Counterparty risk | ' | ' | ' | ' | ' |
Fair Market Value of Oil Derivative Contracts Committed | ' | $458 | $3,660 | $711 | $617 |
Number of defaults on financial trades by a counterparty that can trigger termination rights on all financial trades with such counterparty | 1 | ' | ' | ' | ' |
Fair_Value_Measurements_Detail8
Fair Value Measurements (Details 3) (Commodity contracts, USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Assets | ' | ' | ' |
Fair Market Value of Oil Derivative Contracts Committed | ' | $3,989 | ' |
Derivative instruments not designated as hedging instruments | Oil | ' | ' | ' |
Assets | ' | ' | ' |
Fair Market Value of Oil Derivative Contracts Committed | 1,211 | 5,100 | 2,503 |
Liabilities | ' | ' | ' |
Fair Value, Liability Derivatives | 11,177 | 1,111 | 8,462 |
Derivative instruments not designated as hedging instruments | Oil | Derivative assets - current | ' | ' | ' |
Assets | ' | ' | ' |
Fair Market Value of Oil Derivative Contracts Committed | ' | 2,246 | ' |
Derivative instruments not designated as hedging instruments | Oil | Derivative assets - noncurrent | ' | ' | ' |
Assets | ' | ' | ' |
Fair Market Value of Oil Derivative Contracts Committed | 1,211 | 2,854 | 2,503 |
Derivative instruments not designated as hedging instruments | Oil | Derivative liabilities - current | ' | ' | ' |
Liabilities | ' | ' | ' |
Fair Value, Liability Derivatives | 10,185 | 592 | 5,908 |
Derivative instruments not designated as hedging instruments | Oil | Derivative liabilities - noncurrent | ' | ' | ' |
Liabilities | ' | ' | ' |
Fair Value, Liability Derivatives | $992 | $519 | $2,554 |
Fair_Value_Measurements_Detail9
Fair Value Measurements (Details 4) (Derivative instruments not designated as hedges, Commodity contracts, Derivative fair value loss (gain), USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivative instruments not designated as hedges | Commodity contracts | Derivative fair value loss (gain) | ' | ' | ' | ' | ' | ' |
Fair value measurements | ' | ' | ' | ' | ' | ' |
Amount of Loss (Gain) Recognized in Income | $27,037 | $14,268 | $21,331 | ($9,590) | ($9,293) | $7,959 |
Recovered_Sheet1
Fair Value Measurements (Details 5) (Commodity contracts, USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Fair Value Hierarchy | ' | ' | ' |
Increase (decrease) in net commodity derivative assets (liabilities) | ($136,000) | $100,000 | ($500,000) |
Recurring | Asset (Liability), net | Oil | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | -9,966,000 | 3,989,000 | -5,959,000 |
Recurring | Asset (Liability), net | Oil | Swaps | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | -9,622,000 | 4,069,000 | -5,392,000 |
Recurring | Asset (Liability), net | Oil | Collars and puts | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | ' | -80,000 | -567,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Oil | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | -9,966,000 | 3,989,000 | -5,392,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Oil | Swaps | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | -9,622,000 | 4,069,000 | -5,392,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Oil | Collars and puts | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | ' | -80,000 | ' |
Recurring | Significant Unobservable Inputs (Level 3) | Oil | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | ' | ' | -567,000 |
Recurring | Significant Unobservable Inputs (Level 3) | Oil | Collars and puts | ' | ' | ' |
Fair Value Hierarchy | ' | ' | ' |
Total | ' | ' | ($567,000) |
Recovered_Sheet2
Fair Value Measurements (Details 6) (Significant Unobservable Inputs (Level 3), Commodity contracts, Oil, Collars and puts, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Significant Unobservable Inputs (Level 3) | Commodity contracts | Oil | Collars and puts | ' | ' |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ' | ' |
Balance at the beginning of the period | ($567) | $7,475 |
Total gains (losses): | ' | ' |
Included in earnings | ' | -461 |
Monetization of put options | ' | -7,625 |
Purchases (premiums paid) | ' | 44 |
Transfers out of Level 3 | 567 | ' |
Balance at the end of the period | ' | ($567) |
Related_Party_Transactions_Det1
Related Party Transactions (Details) (USD $) | 1 Months Ended | 12 Months Ended | 26 Months Ended | 28 Months Ended | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Oct. 31, 2011 | Jan. 31, 2011 | |
Apollo | Apollo | Apollo | Apollo | Apollo | Apollo Global Securities, LLC | Athlon FE | Athlon SG | |
Apollo | Apollo | |||||||
Related party transactions | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction fee as a percentage of total equity contributed | ' | ' | ' | 2.00% | ' | ' | ' | ' |
Transaction fee payable | ' | ' | ' | ' | ' | $800,000 | $4,300,000 | $2,300,000 |
Capital contribution | 40,000,000 | ' | ' | ' | ' | ' | ' | ' |
Advisory fee per quarter under second condition | ' | ' | ' | ' | 62,500 | ' | ' | ' |
Consulting and advisory fee as percentage of EBITDAX under first condition | ' | ' | ' | ' | 1.00% | ' | ' | ' |
Maximum advisory fee per calendar year | ' | ' | ' | ' | 500,000 | ' | ' | ' |
Advisory fee | ' | $493,000 | $411,000 | ' | ' | ' | ' | ' |
Earnings_Per_Share_Details1
Earnings Per Share (Details) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | ||
Aug. 07, 2013 | Sep. 30, 2013 | Apr. 30, 2013 | Aug. 07, 2013 | Apr. 30, 2013 | |
Athlon Energy Inc | Athlon Energy Inc | ||||
Earnings Per Share | ' | ' | ' | ' | ' |
Outstanding common stock prior to consummation of IPO (in shares) | ' | ' | 960,907 | ' | 960,907 |
Issue price of IPO (in dollars per share) | $20 | ' | ' | $20 | ' |
Stock split ratio | 65.266 | 65.266 | ' | 65.266 | ' |
Outstanding common stock shares prior to closing of IPO | 66,339,615 | ' | ' | 66,339,615 | ' |
Conversion of units into common stock | ' | ' | ' | ' | 1 |
Earnings_Per_Share_Details_2
Earnings Per Share (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Numerator: | ' | ' | ' | ' | ' | ' |
Basic net income (loss) attributable to stockholders | $2,476 | ($2,096) | $37,052 | $42,508 | $53,014 | ($1,129) |
Denominator: | ' | ' | ' | ' | ' | ' |
Basic weighted average shares outstanding | 76,637,000 | 66,340,000 | 69,810,000 | 66,340,000 | 66,340,000 | 66,340,000 |
Basic EPS attributable to stockholders (in dollars per share) | $0.03 | ($0.03) | $0.53 | $0.64 | $0.80 | ($0.02) |
Numerator: | ' | ' | ' | ' | ' | ' |
Diluted undistributed net income (loss) attributable to stockholders | $2,261 | ($2,096) | $37,668 | $42,508 | $53,014 | ($1,129) |
Denominator: | ' | ' | ' | ' | ' | ' |
Basic weighted average shares outstanding | 76,637,000 | 66,340,000 | 69,810,000 | 66,340,000 | 66,340,000 | 66,340,000 |
Effect of conversion of New Holdings Units to shares of Athlon's common stock | 1,856,000 | ' | 1,856,000 | 1,856,000 | 1,856,000 | ' |
Diluted weighted average shares outstanding | 78,493,000 | 66,340,000 | 71,666,000 | 68,196,000 | 68,196,000 | 66,340,000 |
Diluted EPS attributable to stockholders (in dollars per share) | $0.03 | ($0.03) | $0.53 | $0.62 | $0.78 | ($0.02) |
Antidilutive New Holdings Units excluded from EPS calculations (in shares) | ' | 1,855,563 | ' | ' | ' | 1,855,563 |
Subsequent_Events_Details1
Subsequent Events (Details) (USD $) | Dec. 31, 2012 | Sep. 05, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Jan. 31, 2013 | Mar. 08, 2013 | Mar. 08, 2013 | Mar. 08, 2013 | Mar. 08, 2013 | Mar. 08, 2013 | Feb. 28, 2013 |
In Millions, unless otherwise specified | Athlon Credit Agreement | Athlon Credit Agreement | Commodity derivative contracts with floor price | Commodity derivative contracts with cap price | Commodity derivative contracts with swap price | Commodity derivative contracts with swap price | Commodity derivative contracts with swap price | Commodity derivative contracts with swap price | Commodity derivative contracts with swap price | Subsequent events | Subsequent events | Subsequent events | Subsequent events | Subsequent events | Subsequent events | Subsequent events |
2013 | 2013 | 2013 | 2014 | 2014 | 2015 | 2015 | Athlon Credit Agreement | Commodity derivative contracts with floor price | Commodity derivative contracts with cap price | Commodity derivative contracts with swap price | Commodity derivative contracts with swap price | Commodity derivative contracts with swap price | Basis differential swaps | |||
bbl | bbl | bbl | bbl | bbl | bbl | bbl | 2013 | 2013 | 2013 | 2014 | 2015 | March through December 2013 | ||||
bbl | bbl | bbl | bbl | bbl | bbl | |||||||||||
Subsequent events | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current borrowing base | $275 | $245 | ' | ' | ' | ' | ' | ' | ' | $295 | ' | ' | ' | ' | ' | ' |
Average Daily Volume | ' | ' | 150 | 150 | 5,000 | 7,950 | 4,950 | 1,300 | 800 | ' | 150 | 150 | 5,500 | 5,450 | 1,300 | 5,000 |
Weighted-Average Floor Price | ' | ' | 75 | ' | ' | ' | ' | ' | ' | ' | 75 | ' | ' | ' | ' | ' |
Weighted-Average Cap Price | ' | ' | ' | 105.95 | ' | ' | ' | ' | ' | ' | ' | 105.95 | ' | ' | ' | ' |
Weighted-Average Swap Price | ' | ' | ' | ' | 94.15 | 92.67 | 92.65 | 93.18 | 94.86 | ' | ' | ' | 94.5 | 92.83 | 93.18 | 1.2 |