Athlon Energy Closes $873M Acquisitions - Analyst Blog

Upstream energy operator, Athlon Energy Inc. ( ATHL ) reported the closure of all the previously declared acquisitions of producing and undeveloped resources spread over roughly 23,500 net acres in the Northern Midland Basin. Out of the total transaction value of $873.0 million, the company already completed acquisitions worth $200.0 million by the first half of May. Athlon Energy financed the purchases with the proceeds from the offerings of senior unsecured notes and shares.

Presently, the total estimated net production from the acquired properties − in the Martin, Upton, Andrews, and Glasscock counties - is 4,800 barrels of oil equivalent per day. The net proved reserve of the assets is roughly 31 million barrels of oil equivalent (MMBOE), while the resources' net reserve potential is more than 250 MMBOE.

Management believes that these acquisitions would generate considerable cash flows for its shareholders by increasing its total production significantly.

Holding around 100,000 net acres in the eastern portion of the Permian Basin and with approximately 30 years of vertical drilling inventory, Athlon Energy's asset portfolio is primed for high production growth and peer-leading returns. Athlon Energy also focuses on lowering its drilling and completion expenses. By employing the latest technology, the company is constantly trying to reduce its drilling cost.

As a result, Fort Worth, TX-based Athlon Energy currently retains a Zacks Rank #1 (Strong Buy), implying that it is expected to significantly outperform the broader U.S. equity market over the next one to three months.

One can also look at other Zacks Ranked #1 players in the same industry. These include Encana Corp. ( ECA ), RSP Permian Inc. ( RSPP ) and Ultra Petroleum Corp. ( UPL ).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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