10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 1

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to               

Commission File Number: 001-36026

ATHLON ENERGY INC.

(Exact name of registrant as specified in its charter)

Delaware	46-2549833
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

420 Throckmorton Street, Suite 1200, Fort Worth, Texas	76102
(Address of principal executive offices)	(Zip Code)

(817) 984-8200

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes o   No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes x   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer x (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o   No x

As of August 13, 2013, we had 82,129,089 outstanding shares of common stock, $0.01 par value, excluding Athlon Holdings LP units exchangeable for 1,855,563 shares of our common stock.

EXPLANATORY NOTE

This Amendment No. 1 (the “Amendment”) to Athlon Energy Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, originally filed with the Securities and Exchange Commission on August 14, 2013 (the “Original Form 10-Q”), is being filed solely to furnish the exhibits listed in the Exhibit Index hereto, which provide certain items from the Original Form 10-Q formatted in eXtensible Business Reporting Language (“XBRL”).  The Amendment is being filed within the 30-day grace period provided by Rule 405(a)(2) of Regulation S-T.

No other changes have been made to the Original Form 10-Q except for the furnishing of the exhibits described above.  The Amendment does not reflect subsequent events occurring after the filing date of the Original Form 10-Q or modify or update any disclosures set forth in the Original Form 10-Q.

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SIGNATURES

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

	ATHLON ENERGY INC.
	/s/ William B. D. Butler
	William B. D. Butler
	Vice President—Chief Financial Officer and
	Principal Financial Officer
	/s/ John C. Souders
	John C. Souders
	Vice President—Controller and
	Principal Accounting Officer
Date: September 13, 2013

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EXHIBIT INDEX

Exhibit No.	Description
3.1*	Amended and Restated Certificate of Incorporation of Athlon Energy Inc.
3.2*	Amended and Restated Bylaws of Athlon Energy Inc.
31.1*	Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer).
31.2*	Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer).
32.1*	Section 1350 Certification (Principal Executive Officer).
32.2*	Section 1350 Certification (Principal Financial Officer).
101.INS**	XBRL Instance Document.
101.SCH**	XBRL Taxonomy Extension Schema Document.
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document.

*Previously filed with the Original Form 10-Q.

**Furnished herewith.  Pursuant to Rule 406T of Regulation S-T, these XBRL files are being furnished herewith and are not deemed filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are not deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections.

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Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions

Related Party Transactions

Note 11. Related Party Transactions

Transaction Fee Agreement

Holdings is a party to a Transaction Fee Agreement, dated August 23, 2010, which requires 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.  Since Holdings’ inception through June 30, 2013, it has incurred transaction fees under the Transaction Fee Agreement of approximately $7.5 million in total.  Upon the consummation of Athlon’s IPO, Holdings terminated the Transaction Fee Agreement.

Services Agreement

Holdings is a party to a Services Agreement, dated August 23, 2010, which requires 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 provides for reimbursement to Apollo for any reasonable out-of-pocket expenses incurred while performing services under the Services Agreement.  During the three months ended June 30, 2013 and 2012, Holdings incurred approximately $95,000 and $280,000, respectively, of Advisory Fees.  During the six months ended June 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.

The Services Agreement provides that Apollo will provide advisory services until the earliest of (i) August 23, 2020, (ii) such time as Apollo owns in the aggregate less than 5% of the beneficial economic interest of Holdings, and (iii) such date as is mutually agreed upon by Holdings and Apollo.  Upon the consummation of Athlon’s IPO, Holdings terminated the Services Agreement and, in connection with the termination, Apollo received $2.5 million (plus $132,000 of unreimbursed fees) from Holdings.  Such payment corresponds 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 Athlon’s IPO, it 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.  If the tax receivable agreement had been terminated immediately after the closing of the IPO, Athlon estimates it would have been required to make an early termination payment of approximately $5.3 million to the holders of the New Holdings Units.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenues:
Oil	$ 54,609	$ 29,617	$ 100,268	$ 57,050
Natural gas	4,363	1,492	7,730	2,940
Natural gas liquids	6,193	4,682	11,913	9,033
Total revenues	65,165	35,791	119,911	69,023
Production:
Lease operating	7,775	5,942	15,012	10,641
Production, severance, and ad valorem taxes	4,247	2,461	7,941	4,811
Depletion, depreciation, and amortization	20,358	13,065	38,411	22,679
General and administrative	3,659	2,481	6,998	5,078
Derivative fair value gain	(12,555)	(46,569)	(5,706)	(23,858)
Other operating	227	116	421	246
Total expenses	23,711	(22,504)	63,077	19,597
Operating income	41,454	58,295	56,834	49,426
Interest expense	12,082	1,705	16,556	3,200
Income before income taxes	29,372	56,590	40,278	46,226
Income tax provision	4,844	1,986	4,871	1,622
Consolidated net income	24,528	54,604	35,407	44,604
Less: net income attributable to noncontrolling interest	831		831
Net income attributable to stockholders	$ 23,697	$ 54,604	$ 34,576	$ 44,604
Net income per common share:
Basic (in dollars per share)	$ 0.36	$ 0.82	$ 0.52	$ 0.67
Diluted (in dollars per share)	$ 0.36	$ 0.80	$ 0.52	$ 0.65
Weighted average common shares outstanding:
Basic (in shares)	66,340	66,340	66,340	66,340
Diluted (in shares)	68,196	68,196	68,196	68,196

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Fair Value Measurements

6 Months Ended

Jun. 30, 2013

Fair Value Measurements

Fair Value Measurements

Note 4.  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.  The book value of the credit agreement approximates fair value as the interest rate is variable.  Athlon considers debt with variable interest rates to have a fair value equal to its carrying value (“Level 1” input).  Commodity derivative contracts are marked-to-market each quarter and are thus stated at fair value in the accompanying Consolidated Balance Sheets.  As of June 30, 2013, the fair value of the senior notes was approximately $497.6 million using open market quotes (“Level 1” input).

Derivative Policy

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 the Holdings Credit Agreement.

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 gain” in the accompanying Consolidated Statements of Operations.

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

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, puts, 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.

The following table summarizes Athlon’s open commodity derivative contracts as of June 30, 2013:

	Average	Weighted -		Average	Weighted -		Average		Weighted -		Asset
	Daily	Average		Daily	Average		Daily		Average		(Liability)
	Floor	Floor		Cap	Cap		Swap		Swap		Fair Market
Period	Volume	Price		Volume	Price		Volume		Price		Value
	(Bbl)	(per Bbl)		(Bbl)	(per Bbl)		(Bbl)		(per Bbl)		(in thousands)
July - Dec. 2013	150	$	75.00	150	$	105.95	6,750	(a)	$	94.93	$	(208	)
2014	—	—		—	—		7,950		92.67		7,711
2015	—	—		—	—		1,300		93.18		3,536
											$	11,039

(a) Includes 6,500 Bbls/D at $94.85 per Bbl for the third quarter of 2013 and 7,000 Bbls/D at $95.01 per Bbl for the fourth quarter of 2013.

Athlon is also a party to Midland-Cushing basis differential swaps for 5,000 Bbls/D at $1.20/Bbl for July through December 2013.  At June 30, 2013, the fair value of these contracts was a liability of approximately $0.9 million.

Counterparty Risk.  At June 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:

	Fair Market Value of
	Oil Derivative
	Contracts
Counterparty	Committed
	(in thousands)
BNP Paribas	$	3,825
Wells Fargo	2,318
Scotiabank	1,474
Barclays PLC	1,350
Royal Bank of Canada	1,192

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 one 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.

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:

	Oil			Commodity			Total
Balance Sheet	Commodity			Derivatives			Commodity
Location	Derivatives			Netting (a)			Derivatives
As of June 30, 2013
Assets
Derivatives - current	$	5,335		$	(2,313	)	$	3,022
Derivatives - noncurrent	7,392			—			7,392
Total assets	12,727			(2,313		)	10,414
Liabilities
Derivatives - current	(2,612		)	2,313			(299		)
Derivatives - noncurrent	—			—			—
Total liabilities	(2,612		)	2,313			(299		)
Net assets	$	10,115		$	—		$	10,115
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.

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 Gain Recognized in Income
	Location of Gain	Three months ended June 30,				Six months ended June 30,
Derivatives Not Designated as Hedges	Recognized in Income	2013		2012		2013		2012
Commodity derivative contracts	Derivative fair value gain	$	12,555	$	46,569	$	5,706	$	23,858

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.  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 — Inputs, other than quoted prices within Level 1, that are either directly or indirectly observable.

·      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:

·      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 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.

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 asset of approximately $111,000 as of June 30, 2013 and an increase in the net commodity derivative asset of approximately $125,000 as of December 31, 2012.

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:

				Fair Value Measurements at Reporting Date Using
				Quoted Prices in
				Active Markets for		Significant Other			Significant
				Identical Assets		Observable Inputs			Unobservable Inputs
Description	Asset (liability), net			(Level 1)		(Level 2)			(Level 3)
	(in thousands)
As of June 30, 2013
Oil derivative contracts - swaps	$	11,049		$	—	$	11,049		$	—
Oil derivative contracts - basis differential swaps	(924		)	—		(924		)	—
Oil derivative contracts - collars	(10		)	—		(10		)	—
Total	$	10,115		$	—	$	10,115		$	—
As of December 31, 2012
Oil derivative contracts - swaps	$	4,069		$	—	$	4,069		$	—
Oil derivative contracts - collars	(80		)	—		(80		)	—
Total	$	3,989		$	—	$	3,989		$	—

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share

Schedule of allocation of net income to common stockholders and earnings per share (EPS) computations

	Three months ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
	(in thousands, except per share amounts)
Basic EPS
Numerator:
Basic net income attributable to stockholders	$	23,697	$	54,604	$	34,576	$	44,604
Denominator:
Basic weighted average shares outstanding	66,340		66,340		66,340		66,340
Basic EPS attributable to stockholders	$	0.36	$	0.82	$	0.52	$	0.67
Diluted EPS
Numerator:
Basic net income attributable to stockholders	$	23,697	$	54,604	$	34,576	$	44,604
Effect of conversion of New Holdings Units to shares of Athlon’s common stock	831		—		831		—
Diluted net income attributable to stockholders	$	24,528	$	54,604	$	35,407	$	44,604
Denominator:
Basic weighted average shares outstanding	66,340		66,340		66,340		66,340
Effect of conversion of New Holdings Units to shares of Athlon’s common stock	1,856		1,856		1,856		1,856
Diluted weighted average shares outstanding	68,196		68,196		68,196		68,196
Diluted EPS attributable to stockholders	$	0.36	$	0.80	$	0.52	$	0.65

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Subsequent Events

6 Months Ended

Jun. 30, 2013

Subsequent Events

Subsequent Events

Note 12. Subsequent Events

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 $293.4 million, after deducting underwriting discounts and commissions and estimated 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.

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Aug. 07, 2013	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)					$ 20.00
Stock split ratio			65.266
Outstanding common stock shares prior to closing of IPO	66,339,615		66,339,615
Numerator:
Basic net income attributable to stockholders	$ 23,697	$ 54,604	$ 34,576	$ 44,604
Denominator:
Basic weighted average shares outstanding	66,340,000	66,340,000	66,340,000	66,340,000
Basic EPS attributable to stockholders (in dollars per share)	$ 0.36	$ 0.82	$ 0.52	$ 0.67
Numerator:
Basic net income attributable to stockholders	23,697	54,604	34,576	44,604
Effect of conversion of New Holdings Units to shares of Athlon's common stock	831		831
Diluted net income attributable to stockholders	$ 24,528	$ 54,604	$ 35,407	$ 44,604
Denominator:
Basic weighted average shares outstanding	66,340,000	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	68,196,000	68,196,000	68,196,000	68,196,000
Diluted EPS attributable to stockholders (in dollars per share)	$ 0.36	$ 0.80	$ 0.52	$ 0.65

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Basis of Presentation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	6 Months Ended			0 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Jun. 30, 2013 Athlon Holdings GP LLC	Jun. 30, 2013 Holdings	Aug. 07, 2013 Holdings Subsequent events	Aug. 07, 2013 Holdings Class A limited partners Subsequent events
Noncontrolling interest
Percentage of ownership interest of management and employees				3.20%
Ownership interest in general partner of holdings			100.00%
Noncontrolling interest	$ 10,260	$ 10,260
Exchange Agreement Number of New Holdings Units						1,855,563
Number of common stock exchanged against each unit					1
Net income attributable to noncontrolling interest	$ 831	$ 831

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Formation of the Company and Description of Business (Details) (USD $)	0 Months Ended	6 Months Ended		0 Months Ended
	Apr. 26, 2013	Jun. 30, 2013	Aug. 07, 2013	Aug. 07, 2013 Subsequent events	Aug. 07, 2013 Subsequent events Holdings	Aug. 07, 2013 Subsequent events Holdings Class A limited partners
Formation of the Company and Description of Business
Tax impact of corporate reorganization	$ 73,200,000	$ 73,204,000
Initial public offering
Shares of common stock issued in IPO				15,789,474
Per share price (in dollars per share)			$ 20.00	$ 20.00
Net proceeds from IPO, after deducting underwriting discounts and commissions and estimated offering expenses (in dollars)				$ 293,400,000
Exchange Agreement Number of New Holdings Units						1,855,563
Number of common stock exchanged against each unit					1

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Fair Value Measurements (Details 6) (Commodity contracts, USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Fair Value Hierarchy
Increase (decrease) in net commodity derivative asset	$ (111,000)	$ 125,000
Total	11,039,000
Recurring | Asset (Liability), net | Oil
Fair Value Hierarchy
Total	10,115,000	3,989,000
Recurring | Asset (Liability), net | Oil | Swaps
Fair Value Hierarchy
Total	11,049,000	4,069,000
Recurring | Asset (Liability), net | Oil | Basis differential swaps
Fair Value Hierarchy
Total	(924,000)
Recurring | Asset (Liability), net | Oil | Collars
Fair Value Hierarchy
Total	(10,000)	(80,000)
Recurring | Significant Other Observable Inputs (Level 2) | Oil
Fair Value Hierarchy
Total	10,115,000	3,989,000
Recurring | Significant Other Observable Inputs (Level 2) | Oil | Swaps
Fair Value Hierarchy
Total	11,049,000	4,069,000
Recurring | Significant Other Observable Inputs (Level 2) | Oil | Basis differential swaps
Fair Value Hierarchy
Total	(924,000)
Recurring | Significant Other Observable Inputs (Level 2) | Oil | Collars
Fair Value Hierarchy
Total	$ (10,000)	$ (80,000)

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Related Party Transactions (Details) (USD $)	6 Months Ended		0 Months Ended		3 Months Ended		6 Months Ended		34 Months Ended	0 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013 Apollo Global Securities, LLC	Aug. 07, 2013 Apollo Global Securities, LLC Subsequent events	Aug. 07, 2013 Holdings Subsequent events	Jun. 30, 2013 Holdings Apollo	Jun. 30, 2012 Holdings Apollo	Jun. 30, 2013 Holdings Apollo	Jun. 30, 2012 Holdings Apollo	Jun. 30, 2013 Holdings Apollo	Aug. 07, 2013 Holdings Apollo Subsequent events	Jun. 30, 2013 Holdings Apollo funds	Jun. 30, 2013 Holdings Other Class A limited partners
Related party transactions
Transaction fee as a percentage of total equity contributed							2.00%
Transaction fees									$ 7,500,000
Consulting and advisory fee as percentage of EBITDAX under first condition							1.00%
Advisory fee per quarter under second condition							62,500
Maximum advisory fee per calendar year							500,000
Advisory fee					95,000	280,000	500,000	493,000
Maximum beneficial economic interest to stop advisory services (as a percent)							5.00%
Termination charges										2,500,000
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 exchanged against each unit				1
Percentage of income tax benefits distributed to holders of New Holdings units				85.00%
Early termination charges payable to holders of New Holdings estimated units on termination of the tax receivable agreement				$ 5,300,000

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Fair Value Measurements (Details 3) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013 item
Counterparty risk
Number of financial trades default under which by a counterparty can trigger termination rights	1
Master netting agreements | BNP Paribas
Counterparty risk
Fair Market Value of Oil Derivative Contracts Committed	$ 3,825
Master netting agreements | Wells Fargo
Counterparty risk
Fair Market Value of Oil Derivative Contracts Committed	2,318
Master netting agreements | Scotiabank
Counterparty risk
Fair Market Value of Oil Derivative Contracts Committed	1,474
Master netting agreements | Barclays PLC
Counterparty risk
Fair Market Value of Oil Derivative Contracts Committed	1,350
Master netting agreements | Royal Bank of Canada
Counterparty risk
Fair Market Value of Oil Derivative Contracts Committed	$ 1,192

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Incentive Stock Plans (Tables)

6 Months Ended

Jun. 30, 2013

Incentive Stock Plans

Schedule of assumptions in calculation of fair value of Class B interests granted using an option pricing model

	Six months ended June 30,
	2013			2012
Expected volatility	34.1		%	46.3		%
Expected dividend yield	0		%	0		%
Expected term (in years)	0.53			1.63
Risk-free interest rate	0.11		%	0.24		%
Weighted-average grant date fair value per interest	$	1.09		$	1.41

Summary of changes in unvested common stock which were formerly class B interests in Holdings

			Weighted -
			Average
	Number of		Grant Date
	Shares		Fair Value
Outstanding at January 1	5,021,200		$	0.22
Granted	652,500		1.09
Vested	(1,034,800	)	0.13
Forfeited	(41,000	)	1.18
Outstanding at June 30	4,597,900		0.36

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Consolidated net income	$ 35,407	$ 44,604
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depletion, depreciation, and amortization	38,411	22,679
Deferred taxes	4,871	1,622
Non-cash derivative gain	(6,127)	(26,424)
Equity-based compensation	113	91
Other	3,979	550
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	(12,623)	(3,012)
Other current assets	424	(348)
Accounts payable	(2,503)	1,714
Revenue payable	5,723	1,251
Other current liabilities	11,549	(552)
Net cash provided by operating activities	79,224	42,175
Cash flows from investing activities:
Acquisitions of oil and natural gas properties	(16,482)	(3,142)
Development of oil and natural gas properties	(161,514)	(121,968)
Other	(336)	(189)
Net cash used in investing activities	(178,332)	(125,299)
Cash flows from financing activities:
Proceeds from long-term debt, net of issuance costs	594,647	275,944
Payments on long-term debt	(427,426)	(220,000)
Distributions to Athlon Holdings LP Class A limited partners	(75,000)
Other	563	166
Net cash provided by financing activities	92,784	56,110
Decrease in cash and cash equivalents	(6,324)	(27,014)
Cash and cash equivalents, beginning of period	8,871	32,030
Cash and cash equivalents, end of period	$ 2,547	$ 5,016

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Basis of Presentation

6 Months Ended

Jun. 30, 2013

Basis of Presentation

Basis of Presentation

Note 2.   Basis of Presentation

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 June 30, 2013, results of operations for the three and six months ended June 30, 2013 and 2012, and cash flows for the six months ended June 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 on August 5, 2013.

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.

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.

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.

Noncontrolling Interest

As of June 30, 2013, management and employees owned approximately 3.2% 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 June 30, 2013 of approximately $10.3 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 attributable to noncontrolling interest” for each of the three and six months ended June 30, 2013 of approximately $0.8 million represents the net income of Holdings attributable to management and employees since April 26, 2013.

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.

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.

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Asset Retirement Obligations

6 Months Ended

Jun. 30, 2013

Asset Retirement Obligations

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 six months ended June 30, 2013 (in thousands):

Balance at January 1	$	5,049
Acquisition of properties	265
Wells drilled	418
Accretion of discount	311
Revisions of previous estimates	2
Plugging and abandonment costs incurred	(66		)
Balance at June 30	$	5,979

As of June 30, 2013, $5.9 million of Athlon’s asset retirement obligations were long-term and recorded in “Asset retirement obligations, net of current portion” and $102,000 were current and included in “Other current liabilities” in the accompanying Consolidated Balance Sheets.

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Proved Properties

6 Months Ended

Jun. 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:

	June 30,		December 31,
	2013		2012
	(in thousands)
Proved leasehold costs	$	408,791	$	376,271
Wells and related equipment - Completed	532,259		379,036
Wells and related equipment - In process	30,042		33,264
Total proved properties	$	971,092	$	788,571

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Subsequent Events (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended
	Aug. 07, 2013
Subsequent events
Per share price (in dollars per share)	$ 20.00
Subsequent events
Subsequent events
Shares of common stock issued in IPO	15,789,474
Per share price (in dollars per share)	$ 20.00
Net proceeds from IPO, after deducting underwriting discounts and commissions and estimated offering expenses (in dollars)	$ 293.4

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Proved Properties (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Proved Properties
Proved leasehold costs	$ 408,791	$ 376,271
Wells and related equipment - Completed	532,259	379,036
Wells and related equipment - In process	30,042	33,264
Total proved properties	$ 971,092	$ 788,571

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Fair Value Measurements (Details 4) (Commodity contracts, USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Liabilities
Net assets	$ 11,039
Derivative instruments not designated as hedging instruments | Oil
Assets
Oil Commodity Derivatives, assets	12,727	6,651
Commodity Derivatives Netting, assets	(2,313)	(1,551)
Total Commodity Derivatives	10,414	5,100
Liabilities
Oil Commodity Derivatives, liabilities	(2,612)	(2,662)
Commodity Derivatives Netting, liabilities	2,313	1,551
Total Commodity Derivatives	(299)	(1,111)
Net assets	10,115	3,989
Derivative instruments not designated as hedging instruments | Oil | Derivative assets - current
Assets
Oil Commodity Derivatives, assets	5,335	3,386
Commodity Derivatives Netting, assets	(2,313)	(1,140)
Total Commodity Derivatives	3,022	2,246
Derivative instruments not designated as hedging instruments | Oil | Derivative assets - noncurrent
Assets
Oil Commodity Derivatives, assets	7,392	3,265
Commodity Derivatives Netting, assets	0	(411)
Total Commodity Derivatives	7,392	2,854
Derivative instruments not designated as hedging instruments | Oil | Derivative liabilities - current
Liabilities
Oil Commodity Derivatives, liabilities	(2,612)	(1,732)
Commodity Derivatives Netting, liabilities	2,313	1,140
Total Commodity Derivatives	(299)	(592)
Derivative instruments not designated as hedging instruments | Oil | Derivative liabilities - noncurrent
Liabilities
Oil Commodity Derivatives, liabilities	0	(930)
Commodity Derivatives Netting, liabilities	0	411
Total Commodity Derivatives	$ 0	$ (519)

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Stockholders' Equity (Details) (USD $)	0 Months Ended		6 Months Ended
	Apr. 26, 2013	Apr. 02, 2013	Jun. 30, 2013	Aug. 07, 2013
Stockholders' Equity
Common stock issued at incorporation (in shares)		1,000
Aggregate purchase price of common stock issued at incorporation (in dollars)		$ 10.00
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)				$ 20.00
Stock split ratio			65.266
Outstanding common stock shares prior to closing of IPO			66,339,615

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 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	66,339,615
Common stock, shares outstanding	66,339,615

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Earnings Per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share

Earnings Per Share

Note 8. 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.

The following table reflects the allocation of net income to common stockholders and EPS computations for the periods indicated:

	Three months ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
	(in thousands, except per share amounts)
Basic EPS
Numerator:
Basic net income attributable to stockholders	$	23,697	$	54,604	$	34,576	$	44,604
Denominator:
Basic weighted average shares outstanding	66,340		66,340		66,340		66,340
Basic EPS attributable to stockholders	$	0.36	$	0.82	$	0.52	$	0.67
Diluted EPS
Numerator:
Basic net income attributable to stockholders	$	23,697	$	54,604	$	34,576	$	44,604
Effect of conversion of New Holdings Units to shares of Athlon’s common stock	831		—		831		—
Diluted net income attributable to stockholders	$	24,528	$	54,604	$	35,407	$	44,604
Denominator:
Basic weighted average shares outstanding	66,340		66,340		66,340		66,340
Effect of conversion of New Holdings Units to shares of Athlon’s common stock	1,856		1,856		1,856		1,856
Diluted weighted average shares outstanding	68,196		68,196		68,196		68,196
Diluted EPS attributable to stockholders	$	0.36	$	0.80	$	0.52	$	0.65

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total	Total Stockholders Equity	Partners' Equity	Common Stock	Additional Paid-in Capital	Retained Earnings	Noncontrolling Interest
Balances at Dec. 31, 2012			$ 420,877
Balances at Dec. 31, 2012	420,877
Increase (Decrease) in Equity
Capital contributions	1,500		1,500
Equity-based compensation prior to corporate reorganization	89		89
Net income prior to corporate reorganization	14,214		14,214
Distributions to Athlon Holdings LP Class A limited partners	(75,000)		(75,000)
Common stock issued in corporate reorganization		352,251	(361,680)	663	351,588		9,429
Common stock issued in corporate reorganization (in shares)				66,340,000
Tax impact of corporate reorganization	(73,204)	(73,204)			(73,204)
Equity-based compensation subsequent to corporate reorganization	66	66			66
Consolidated net income subsequent to corporate reorganization	21,193	20,362				20,362	831
Balances at Jun. 30, 2013	$ 309,735	$ 299,475		$ 663	$ 278,450	$ 20,362	$ 10,260
Balances (in shares) at Jun. 30, 2013	66,339,615			66,340,000

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 2,547	$ 8,871
Accounts receivable	37,124	24,501
Derivatives	3,022	2,246
Inventory	999	1,022
Other	600	2,486
Total current assets	44,292	39,126
Properties and equipment, at cost - full cost method:
Proved properties, including wells and related equipment	971,092	788,571
Unproved properties	95,523	89,860
Accumulated depletion, depreciation, and amortization	(112,131)	(73,824)
Properties and equipment, net	954,484	804,607
Derivatives	7,392	2,854
Debt issuance costs	15,148	4,418
Other	2,837	1,293
Total assets	1,024,153	852,298
Accounts payable:
Trade	369	3,170
Affiliate	214	935
Accrued liabilities:
Lease operating	4,761	3,858
Production, severance, and ad valorem taxes	3,762	1,307
Development capital	49,345	39,483
Interest	7,732	834
Derivatives	299	592
Revenue payable	15,555	9,330
Deferred taxes	2,777	58
Other	2,412	1,808
Total current liabilities	87,226	61,375
Derivatives		519
Asset retirement obligations, net of current portion	5,877	5,049
Long-term debt	543,500	362,000
Deferred taxes	77,696	2,340
Other	119	138
Total liabilities	714,418	431,421
Commitments and contingencies
Equity:
Preferred stock, $.01 par value, 50,000,000 shares authorized, none issued and outstanding
Common stock, $.01 par value, 500,000,000 shares authorized, 66,339,615 and none issued and outstanding, respectively	663
Additional paid-in capital	278,450
Retained earnings	20,362
Total stockholders' equity	299,475
Noncontrolling interest	10,260
Total equity	309,735	420,877
Total liabilities and equity	$ 1,024,153	$ 852,298

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Fair Value Measurements (Details) (Level 1 input, USD $) In Millions, unless otherwise specified	Jun. 30, 2013
Level 1 input
Fair value measurements
Senior notes	$ 497.6

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Long-Term Debt (Tables)

6 Months Ended

Jun. 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 Commitment Fee		Applicable Margin for Eurodollar Loans		Applicable Margin for Base Rate Loans
Less than or equal to .30 to 1	0.375	%	1.50	%	0.50	%
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	0.50	%	2.00	%	1.00	%
Greater than .80 to 1 but less than or equal to .90 to 1	0.50	%	2.25	%	1.25	%
Greater than .90 to 1	0.50	%	2.50	%	1.50	%

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Incentive Stock Plans (Details) (USD $)	3 Months Ended		6 Months Ended		0 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Aug. 07, 2013 Holdings	Jun. 30, 2013 Holdings Minimum	Jun. 30, 2013 Holdings Maximum	Jun. 30, 2013 Holdings Class A limited partners	Jun. 30, 2013 Holdings Class B limited partners
Incentive stock plans
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%	20.00%
Vesting period of Class B interest						4 years	5 years
Non-cash equity-based compensation expense	$ 65,000	$ 32,000	$ 113,000	$ 91,000	$ 1,600,000
Capitalized non-cash equity-based compensation expense	17,000	43,000	42,000	43,000
Fair Value Assumptions of Class B interest granted
Expected volatility (as a percent)			34.10%	46.30%
Expected dividend yield (as a percent)			0.00%	0.00%
Expected term (in years)			6 months 11 days	1 year 7 months 17 days
Risk-free interest rate (as a percent)			0.11%	0.24%
Unvested common stock
Outstanding at beginning of period			5,021,200
Granted (in shares)			652,500
Vested (in shares)			(1,034,800)	(1,015,500)
Forfeited (in shares)			(41,000)
Outstanding at ending of period	4,597,900		4,597,900
Weighted - Average Grant Date Fair Value
Outstanding at beginning of period			$ 0.22
Granted (in dollars per share)			$ 1.09	$ 1.41
Vested (in dollars per share)			$ 0.13
Forfeited (in dollars per share)			$ 1.18
Outstanding at ending of period	$ 0.36		$ 0.36
Additional disclosure
Total unrecognized compensation cost related to unvested common stock which were formerly Class B interests in Holdings	1,600,000		1,600,000
Weighted-average period for recognition of unrecognized compensation cost			3 years 3 months 18 days
Total grant date fair value			$ 136,000	$ 111,000

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Asset Retirement Obligations (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Asset retirement obligations
Balance at the beginning of the period	$ 5,049,000
Acquisition of properties	265,000
Wells drilled	418,000
Accretion of discount	311,000
Revisions of previous estimates	2,000
Plugging and abandonment costs incurred	(66,000)
Balance at the end of the period	5,979,000
Asset retirement obligations, net of current portion	5,877,000	5,049,000
Current portion of asset retirement obligations	$ 102,000

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Long-Term Debt (Details) (USD $)	6 Months Ended	1 Months Ended	6 Months Ended					6 Months Ended	3 Months Ended	6 Months Ended			6 Months Ended																														1 Months Ended
	Jun. 30, 2013	Apr. 30, 2013 Holdings Senior notes	Jun. 30, 2013 Holdings Senior notes Upon assets disposition triggering events	Jun. 30, 2013 Holdings Senior notes Prior to April 15, 2016	Jun. 30, 2013 Holdings Senior notes Prior to April 15, 2016 Redemption from proceeds of certain equity offerings	Jun. 30, 2013 Holdings Senior notes On or prior to July 15, 2014 Redemption of debt instrument upon change of control	Jun. 30, 2013 Holdings Senior notes Maximum	Jun. 30, 2013 Holdings Senior notes Maximum Prior to April 15, 2016 Redemption from proceeds of certain equity offerings	Jun. 30, 2013 Holdings Credit agreement	Jun. 30, 2013 Holdings Credit agreement	May 31, 2013 Holdings Credit agreement	Apr. 30, 2013 Holdings Credit agreement	Jun. 30, 2013 Holdings Credit agreement Applicable Margin for Eurodollar Loans Eurodollar rate	Jun. 30, 2013 Holdings Credit agreement Applicable Margin for Eurodollar Loans LIBOR	Jun. 30, 2013 Holdings Credit agreement Applicable Margin for Base Rate Loans Eurodollar rate	Jun. 30, 2013 Holdings Credit agreement Applicable Margin for Base Rate Loans LIBOR	Jun. 30, 2013 Holdings Credit agreement Applicable Margin for Base Rate Loans Base Rate	Jun. 30, 2013 Holdings Credit agreement Applicable Margin for Base Rate Loans Prime rate	Jun. 30, 2013 Holdings Credit agreement Applicable Margin for Base Rate Loans Federal funds rate	Jun. 30, 2013 Holdings Credit agreement Less than or equal to .30 to 1	Jun. 30, 2013 Holdings Credit agreement Less than or equal to .30 to 1 Applicable Margin for Eurodollar Loans	Jun. 30, 2013 Holdings Credit agreement Less than or equal to .30 to 1 Applicable Margin for Base Rate Loans	Jun. 30, 2013 Holdings Credit agreement Greater than .30 to 1 but less than or equal to .60 to 1	Jun. 30, 2013 Holdings Credit agreement Greater than .30 to 1 but less than or equal to .60 to 1 Applicable Margin for Eurodollar Loans	Jun. 30, 2013 Holdings Credit agreement Greater than .30 to 1 but less than or equal to .60 to 1 Applicable Margin for Base Rate Loans	Jun. 30, 2013 Holdings Credit agreement Greater than .60 to 1 but less than or equal to .80 to 1	Jun. 30, 2013 Holdings Credit agreement Greater than .60 to 1 but less than or equal to .80 to 1 Applicable Margin for Eurodollar Loans	Jun. 30, 2013 Holdings Credit agreement Greater than .60 to 1 but less than or equal to .80 to 1 Applicable Margin for Base Rate Loans	Jun. 30, 2013 Holdings Credit agreement Greater than .80 to 1 but less than or equal to .90 to 1	Jun. 30, 2013 Holdings Credit agreement Greater than .80 to 1 but less than or equal to .90 to 1 Applicable Margin for Eurodollar Loans	Jun. 30, 2013 Holdings Credit agreement Greater than .80 to 1 but less than or equal to .90 to 1 Applicable Margin for Base Rate Loans	Jun. 30, 2013 Holdings Credit agreement Greater than .90 to 1	Jun. 30, 2013 Holdings Credit agreement Greater than .90 to 1 Applicable Margin for Eurodollar Loans	Jun. 30, 2013 Holdings Credit agreement Greater than .90 to 1 Applicable Margin for Base Rate Loans	Jun. 30, 2013 Holdings Credit agreement Maximum Less than or equal to .30 to 1	Jun. 30, 2013 Holdings Credit agreement Maximum Greater than .30 to 1 but less than or equal to .60 to 1	Jun. 30, 2013 Holdings Credit agreement Maximum Greater than .60 to 1 but less than or equal to .80 to 1	Jun. 30, 2013 Holdings Credit agreement Maximum Greater than .80 to 1 but less than or equal to .90 to 1	Jun. 30, 2013 Holdings Credit agreement Maximum Greater than .90 to 1	Jun. 30, 2013 Holdings Credit agreement Minimum Greater than .30 to 1 but less than or equal to .60 to 1	Jun. 30, 2013 Holdings Credit agreement Minimum Greater than .60 to 1 but less than or equal to .80 to 1	Jun. 30, 2013 Holdings Credit agreement Minimum Greater than .80 to 1 but less than or equal to .90 to 1	Apr. 30, 2013 Holdings Former second lien term loan
Long-term debt
Aggregate principal amount of notes issued		$ 500,000,000
Interest rate (as a percent)		7.375%
Distribution paid to Class A limited partners	75,000,000	75,000,000
Fixed charge coverage ratio							2.0
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%	107.375%	110.00%
Write off of unamortized debt issuance costs																																											2,800,000
Maximum amount committed by lender									1,000,000,000	1,000,000,000
Outstanding borrowings									43,500,000	43,500,000
Remaining borrowing base									276,500,000	276,500,000
Current borrowing base									320,000,000	320,000,000	320,000,000	267,500,000
Outstanding letters of credit									$ 0	$ 0
Ratio of Outstanding Borrowings to Borrowing Base																																			0.30	0.60	0.80	0.90	0.90	0.30	0.60	0.80
Unused Commitment Fee (as a percent)																				0.375%			0.375%			0.50%			0.50%			0.50%
Applicable Margin (as a percent)															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	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

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Stockholders' Equity

6 Months Ended

Jun. 30, 2013

Stockholders' Equity

Stockholders' Equity

Note 7. Stockholders’ 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 a 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.

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Fair Value Measurements (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Open commodity derivative contracts
Summary of open commodity derivative contracts
Asset (Liability) Fair Market Value	$ 11,039
Open commodity derivative contracts | July - Dec. 2013
Summary of open commodity derivative contracts
Asset (Liability) Fair Market Value	(208)
Open commodity derivative contracts | 2014
Summary of open commodity derivative contracts
Asset (Liability) Fair Market Value	7,711
Open commodity derivative contracts | 2015
Summary of open commodity derivative contracts
Asset (Liability) Fair Market Value	3,536
Commodity derivative contracts with floor price | July - Dec. 2013
Summary of open commodity derivative contracts
Average Daily Volume	150
Weighted-Average Floor Price	75.00
Commodity derivative contracts with cap price | July - Dec. 2013
Summary of open commodity derivative contracts
Average Daily Volume	150
Weighted-Average Cap Price	105.95
Commodity derivative contracts with swap price | July - Dec. 2013
Summary of open commodity derivative contracts
Average Daily Volume	6,750
Weighted-Average Swap Price	94.93
Commodity derivative contracts with swap price | Third quarter of 2013
Summary of open commodity derivative contracts
Average Daily Volume	6,500
Weighted-Average Swap Price	94.85
Commodity derivative contracts with swap price | Fourth quarter of 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
Weighted-Average Swap Price	92.67
Commodity derivative contracts with swap price | 2015
Summary of open commodity derivative contracts
Average Daily Volume	1,300
Weighted-Average Swap Price	93.18
Midland-Cushing basis differential swaps | July - Dec. 2013
Summary of open commodity derivative contracts
Average Daily Volume	5,000
Weighted-Average Swap Price	1.20
Fair value of derivative liability	$ 900

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies

Commitments and Contingencies

Note 10. Commitments and Contingencies

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.

Additionally, Holdings 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.

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Long-Term Debt

6 Months Ended

Jun. 30, 2013

Long-Term Debt

Long-Term Debt

Note 6. Long-Term Debt

Senior Notes

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.  The indenture governing the Notes contains covenants, including, among other things, covenants that restrict Holdings’ ability to:

· 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

· 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.

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.

As a result of the issuance of the Notes, Athlon’s 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.

Credit Agreement

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.

As of June 30, 2013, the borrowing base was $320 million and there were $43.5 million of outstanding borrowings, $276.5 million of borrowing capacity, and no outstanding letters of credit under the Holdings Credit Agreement.  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.

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 (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 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:

Ratio of Outstanding Borrowings to Borrowing Base	Unused Commitment Fee		Applicable Margin for Eurodollar Loans		Applicable Margin for Base Rate Loans
Less than or equal to .30 to 1	0.375	%	1.50	%	0.50	%
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	0.50	%	2.00	%	1.00	%
Greater than .80 to 1 but less than or equal to .90 to 1	0.50	%	2.25	%	1.25	%
Greater than .90 to 1	0.50	%	2.50	%	1.50	%

The “Eurodollar rate” for any interest period (either one, two, three, or six 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: (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 Holdings Credit Agreement.  Borrowings under the Holdings Credit Agreement may be repaid from time to time without penalty.

The Holdings Credit Agreement contains covenants including, among others, the following:

· a prohibition against incurring debt, subject to permitted exceptions;

· a restriction on creating liens on Holdings’ 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 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 beginning with the quarter ended June 30, 2013 (which ratio changes to 4.5 to 1.0 beginning with the quarter ended June 30, 2014); and

· 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.

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Formation of the Company and Description of Business

6 Months Ended

Jun. 30, 2013

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

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 (“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” tax expense of approximately $73.2 million was recorded to establish a net deferred tax liability 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.

Prior to the corporate reorganization, Holdings was a party to a limited partnership agreement with its management group and Apollo Athlon Holdings LLC (“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.

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 $293.4 million, after deducting underwriting discounts and commissions and estimated 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.

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Fair Value Measurements (Details 5) (Derivative instruments not designated as hedges, Commodity contracts, Derivative fair value gain, USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Derivative instruments not designated as hedges | Commodity contracts | Derivative fair value gain
Fair value measurements
Amount of Gain Recognized in Income	$ 12,555	$ 46,569	$ 5,706	$ 23,858

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2013

Basis of Presentation

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 June 30, 2013, results of operations for the three and six months ended June 30, 2013 and 2012, and cash flows for the six months ended June 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 on August 5, 2013.

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.

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.

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.

Noncontrolling Interest

Noncontrolling Interest

As of June 30, 2013, management and employees owned approximately 3.2% 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 June 30, 2013 of approximately $10.3 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 attributable to noncontrolling interest” for each of the three and six months ended June 30, 2013 of approximately $0.8 million represents the net income of Holdings attributable to management and employees since April 26, 2013.

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.

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.

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Incentive Stock Plans

6 Months Ended

Jun. 30, 2013

Incentive Stock Plans

Incentive Stock Plans

Note 9.  Incentive Stock Plans

Class B Interests

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 limited partners 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.  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.

Management had independent valuations prepared for its grants of Class B limited partner interests.  During the three months ended June 30, 2013 and 2012, Athlon recorded approximately $65,000 and $32,000, respectively, of non-cash equity-based compensation expense.  During the six months ended June 30, 2013 and 2012, Athlon recorded approximately $113,000 and $91,000, respectively, of non-cash equity-based compensation expense.  Non-cash equity-based compensation expense is 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 three and six months ended June 30, 2013, Athlon capitalized approximately $17,000 and $42,000, respectively, of non-cash stock-based compensation expense.  During each of the three and six months ended June 30, 2012, Athlon capitalized approximately $43,000 of non-cash stock-based compensation expense.  Capitalized non-cash stock-based compensation expense is included as a component of “Proved properties, including wells and related equipment” in the accompanying Consolidated Balance Sheets.

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:

	Six months ended June 30,
	2013			2012
Expected volatility	34.1		%	46.3		%
Expected dividend yield	0		%	0		%
Expected term (in years)	0.53			1.63
Risk-free interest rate	0.11		%	0.24		%
Weighted-average grant date fair value per interest	$	1.09		$	1.41

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 expected payout date from a triggering event.  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.

The following table summarizes the changes in Athlon’s unvested common stock awards which were formerly Class B interests in Holdings for the six months ended June 30, 2013:

			Weighted -
			Average
	Number of		Grant Date
	Shares		Fair Value
Outstanding at January 1	5,021,200		$	0.22
Granted	652,500		1.09
Vested	(1,034,800	)	0.13
Forfeited	(41,000	)	1.18
Outstanding at June 30	4,597,900		0.36

As of June 30, 2013, Athlon had approximately $1.6 million of total unrecognized compensation cost related to unvested common stock awards which were formerly Class B interests in Holdings, which is expected to be recognized over a weighted-average period of approximately 3.3 years.  During the six months ended June 30, 2013 and 2012, there were 1,034,800 and 1,015,500, respectively, Class B interests that vested, the total grant date fair value of which was approximately $136,000 and $111,000, respectively.

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 $1.6 million.

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Asset Retirement Obligations (Tables)

6 Months Ended

Jun. 30, 2013

Asset Retirement Obligations

Summary of changes in 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 six months ended June 30, 2013 (in thousands):

Balance at January 1	$	5,049
Acquisition of properties	265
Wells drilled	418
Accretion of discount	311
Revisions of previous estimates	2
Plugging and abandonment costs incurred	(66		)
Balance at June 30	$	5,979

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Proved Properties (Tables)

6 Months Ended

Jun. 30, 2013

Proved Properties

Schedule of proved properties including wells and related equipment

	June 30,		December 31,
	2013		2012
	(in thousands)
Proved leasehold costs	$	408,791	$	376,271
Wells and related equipment - Completed	532,259		379,036
Wells and related equipment - In process	30,042		33,264
Total proved properties	$	971,092	$	788,571

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 13, 2013
Document and Entity Information
Entity Registrant Name	Athlon Energy Inc.
Entity Central Index Key	0001574648
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		82,129,089
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Measurements

Summary of open commodity derivative contracts

The following table summarizes Athlon’s open commodity derivative contracts as of June 30, 2013:

	Average	Weighted -		Average	Weighted -		Average		Weighted -		Asset
	Daily	Average		Daily	Average		Daily		Average		(Liability)
	Floor	Floor		Cap	Cap		Swap		Swap		Fair Market
Period	Volume	Price		Volume	Price		Volume		Price		Value
	(Bbl)	(per Bbl)		(Bbl)	(per Bbl)		(Bbl)		(per Bbl)		(in thousands)
July - Dec. 2013	150	$	75.00	150	$	105.95	6,750	(a)	$	94.93	$	(208	)
2014	—	—		—	—		7,950		92.67		7,711
2015	—	—		—	—		1,300		93.18		3,536
											$	11,039

(a) Includes 6,500 Bbls/D at $94.85 per Bbl for the third quarter of 2013 and 7,000 Bbls/D at $95.01 per Bbl for the fourth quarter of 2013.

Schedule of committed 10% or greater (in terms of fair market value) of oil derivative contracts in asset positions from counterparties, or their affiliates

At June 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:

	Fair Market Value of
	Oil Derivative
	Contracts
Counterparty	Committed
	(in thousands)
BNP Paribas	$	3,825
Wells Fargo	2,318
Scotiabank	1,474
Barclays PLC	1,350
Royal Bank of Canada	1,192

Schedule of fair value of derivative instruments not designated as hedging instruments

The following table summarizes the fair value of Athlon’s derivative instruments not designated as hedging instruments as of the dates indicated:

	Oil			Commodity			Total
Balance Sheet	Commodity			Derivatives			Commodity
Location	Derivatives			Netting (a)			Derivatives
As of June 30, 2013
Assets
Derivatives - current	$	5,335		$	(2,313	)	$	3,022
Derivatives - noncurrent	7,392			—			7,392
Total assets	12,727			(2,313		)	10,414
Liabilities
Derivatives - current	(2,612		)	2,313			(299		)
Derivatives - noncurrent	—			—			—
Total liabilities	(2,612		)	2,313			(299		)
Net assets	$	10,115		$	—		$	10,115
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):

		Amount of Gain Recognized in Income
	Location of Gain	Three months ended June 30,				Six months ended June 30,
Derivatives Not Designated as Hedges	Recognized in Income	2013		2012		2013		2012
Commodity derivative contracts	Derivative fair value gain	$	12,555	$	46,569	$	5,706	$	23,858

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
				Identical Assets		Observable Inputs			Unobservable Inputs
Description	Asset (liability), net			(Level 1)		(Level 2)			(Level 3)
	(in thousands)
As of June 30, 2013
Oil derivative contracts - swaps	$	11,049		$	—	$	11,049		$	—
Oil derivative contracts - basis differential swaps	(924		)	—		(924		)	—
Oil derivative contracts - collars	(10		)	—		(10		)	—
Total	$	10,115		$	—	$	10,115		$	—
As of December 31, 2012
Oil derivative contracts - swaps	$	4,069		$	—	$	4,069		$	—
Oil derivative contracts - collars	(80		)	—		(80		)	—
Total	$	3,989		$	—	$	3,989		$	—