Athlon Energy (FRA:28A) Interest Coverage : 10.40 (As of Sep. 2014)

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What is Athlon Energy Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Athlon Energy's Operating Income for the three months ended in Sep. 2014 was €100.9 Mil. Athlon Energy's Interest Expense for the three months ended in Sep. 2014 was €-9.7 Mil. Athlon Energy's interest coverage for the quarter that ended in Sep. 2014 was 10.40. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Athlon Energy's Interest Coverage or its related term are showing as below:

FRA:28A' s Interest Coverage Range Over the Past 10 Years
Min: 0 Med: 3.17 Max: 6.52
Current: 5.4

FRA:28A's Interest Coverage is not ranked
in the Oil & Gas industry.
Industry Median: 6.59 vs FRA:28A: 5.40

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Athlon Energy Interest Coverage Historical Data

The historical data trend for Athlon Energy's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Athlon Energy Interest Coverage Chart

Athlon Energy Annual Data

Trend

Dec11

Dec12

Dec13

Interest Coverage

0.78

6.52

3.17

Athlon Energy Quarterly Data
	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14
Interest Coverage	Get a 7-Day Free Trial			1.42	4.48	4.27	1.95	10.40

Competitive Comparison of Athlon Energy's Interest Coverage

For the Oil & Gas E&P subindustry, Athlon Energy's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Athlon Energy's Interest Coverage Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, Athlon Energy's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Athlon Energy's Interest Coverage falls into.

Athlon Energy Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Athlon Energy's Interest Coverage for the fiscal year that ended in Dec. 2013 is calculated as

Here, for the fiscal year that ended in Dec. 2013, Athlon Energy's Interest Expense was €-26.8 Mil. Its Operating Income was €84.8 Mil. And its Long-Term Debt & Capital Lease Obligation was €365.0 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2013 )	/	Interest Expense (A: Dec. 2013 )
	=	-1	*	84.83	/	-26.768
	=	3.17

Athlon Energy's Interest Coverage for the quarter that ended in Sep. 2014 is calculated as

Here, for the three months ended in Sep. 2014, Athlon Energy's Interest Expense was €-9.7 Mil. Its Operating Income was €100.9 Mil. And its Long-Term Debt & Capital Lease Obligation was €1,075.5 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Sep. 2014 )	/	Interest Expense (Q: Sep. 2014 )
	=	-1	*	100.9	/	-9.702
	=	10.40

The higher the ratio, the stronger the company's Financial Strength is.

Athlon Energy (FRA:28A) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Athlon Energy Interest Coverage Related Terms

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Athlon Energy (FRA:28A) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.athlonenergy.com

Athlon Energy Inc was founded in August 2010 and formed on April 1, 2013 as a Delaware corporation. The Company is an independent exploration and production company engaged in the acquisition, development, and exploitation of unconventional oil and liquids-rich natural gas reserves in the Permian Basin. The Permian Basin spans portions of Texas and New Mexico and is composed of three primary sub-basins: the Delaware Basin, the Central Basin Platform, and the Midland Basin. All of the properties are located in the Midland Basin. The Company's drilling activity is primarily engaged in the low-risk vertical development of stacked pay zones, including the Clearfork, Spraberry, Wolfcamp, Cline, Strawn, Atoka, and Mississippian formations, referred to as the Wolfberry play, and horizontal development of the Wolfcamp. As of December 31, 2013, it had identified 2,232 gross vertical drilling locations on 40-acre spacing and an additional 2,616 gross vertical drilling locations on 20-acre spacing. Only 659 gross of these potential vertical drilling locations were booked as proved undeveloped reserves. As of December 31, 2013, it had also identified 1,065 gross horizontal drilling locations targeting Wolfcamp A, Wolfcamp B, Wolfcamp C, and Cline intervals, which comprise 327 gross, 362 gross, 136 gross, and 240 gross locations, respectively. Its acreage position was 127,840 gross acres at December 31, 2013. As of December 31, 2013, it had 127.3 MMBOE of proved reserves, comprised of 71.2 MMBbls of oil, 30.7 MMBbls of NGLs, and 152.2 Bcf of natural gas. The Company's facilities located at well locations include field gathering systems, storage tank batteries, saltwater disposal systems, oil/gas/water separation equipment, and pumping units. It owns 10 saltwater disposal systems with over 45,700 barrels of water per day capacity and access to over 144 fresh water supply wells throughout its acreage.

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