Athlon has put together 86 million BOE of proved Permian Basin reserves in less than three years.
Bob Reeves and fellow former Encore Acquisition Co. executives plan to IPO their Permian-focused Athlon Energy Inc. that was formed in August 2010 with a $200-million initial-funding commitment from Apollo Global Management LLC.
The Fort Worth-based Athlon team has amassed an estimated 86 million barrels of oil equivalent (BOE) of proved reserves (58% oil; 22% natural gas liquids or NGLs) to date—entirely in the Midland Basin from vertical wells targeting Spraberry, Wolfcamp, Cline and other formations, according to its S-1 filing with the SEC. This year, its drilling plans are for some horizontal Wolfcamp wells in addition to 151 net vertical Wolfberry wells.
Athlon anticipates raising $345 million in the offering toward paying debt and funding further drilling. Citigroup Global Markets Inc. is the underwriter. Reeves, Athlon’s president and chief executive officer, was chief financial officer for oil-focused Encore, which was bought by Denbury Resources Inc. for $4.5 billion in stock and cash in March 2010.
Athlon’s IPO is among several planned by energy-focused companies this year. Here are a few more:
--Jonny Jones and the team at Anadarko- and Arkoma-focused Jones Energy Inc. seek to raise $250 million. Jones, who is CEO, founded the Austin, Texas-based company in 1988. It currently has some 85 million BOE of proved reserves—roughly 55% oil and NGLs—and 720 gross wells producing 15,800 net BOE a day from Cleveland, Granite Wash, Tonkawa, Marmaton and Woodford. Lead underwriters of the offering are Barclays Capital Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC. Proceeds are to pay debt and fund further asset development.
--Houston-based oilfield-service firm Frank’s International NV seeks to raise some $500 million. The 75-year-old tubulars and services provider was founded in Lafayette, Louisiana, by Frank Mosing as Frank’s Casing Crew & Rental Tools. It currently operates in 60 countries, led by Keith Mosing, chairman and CEO. Recent annual revenue was $1.06 billion; net income, $351 million. Lead underwriters are Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Simmons & Co. International. Proceeds are to pay debt.
--Chuck Stanley and the QEP Resources Inc. team expect to IPO the E&P company’s midstream assets as a master limited partnership, QEP Midstream Partners LP. Existing assets are two pipelines and four gathering systems with average daily, gross input in 2012 of 1.8 trillion Btu of gas and 18,224 barrels of oil in Wyoming, Colorado, eastern Utah and in the Williston Basin in North Dakota. Recent-year net income was $67.8 million from $161.4 million of revenue.
Expected proceeds of some $400 million will be used to pay the QEP parent for the assets and to pay debt. Stanley, who is chairman, president and CEO, has led QEP Resources since its spin-out from Salt Lake City-based Questar Corp., where he was chief operating officer. The lead underwriter of the midstream IPO is Wells Fargo Securities LLC.
Editor’s note: For more on Athlon, see “Three Start-Ups,” Oil and Gas Investor, April 2011. For more on Jones Energy, see “Granite Wash Zone Shift,” October 2012, and “Jones’ Cleveland,” October 2010. For more on QEP Resources, see “QEP Unleashed,” November 2010.
-Nissa Darbonne, Editor-at-Large, Oil and Gas Investor, OilandGasInvestor.com, Oil and Gas Investor This Week, A&D Watch, A-Dcenter.com, UGcenter.com. Contact Nissa at email@example.com.
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