Independent oil & gas exploration & production company Athlon Energy Inc. (NYSE: ATHL) sold approximately 15.8 million shares this morning at $20 a share in an initial public offering (IPO) that raised net proceeds of about $280 million. The firm offered about 19.2% of its shares in the IPO.

Apollo Global Management LLC (NYSE: APO) remains the largest shareholder in the company, with a stake of nearly 69%. Apollo also controls three of the five seats on the company’s board of directors.

Athlon Energy holds leases on nearly 125,000 gross acres in the Permian Basin of west Texas, and the company claims proved reserves of 88 million barrels of oil equivalent. As of June, Athlon was producing 12,000 barrels of oil equivalent daily. All production at this point comes from vertically-drilled wells although the company says it has identified 931 net horizontal drilling locations. Net vertical drilling locations total 3,857.

Because vertical wells are typically less expensive to drill and the Permian Basin already contains a mature infrastructure of gathering systems and pipelines, Athlon has been able to lower its lifting cost by 28% per barrel of oil equivalent and cut its drilling cost in one of its three locations to $1.8 million per well. If the company can maintain this level of cost, it stands to do very well indeed.

Shares are up about 34.4% at noon today, to $26.80 after peaking at $27.25 earlier.

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