HOUSTON, TX -- (Marketwired) -- 03/03/15 -- Miller Energy Resources, Inc.(NYSE: MILL) ("Miller Energy" or "the Company") announced that it has successfully drilled and completed the Company's first two new gas wells at its North Fork Unit and brought both onto production.
Both new wells are online and in the clean-up process and are continuing to increase in measured daily production volumes, currently at over 2,000 Mcfd combined. The first productive zone flowed in the first well, NF 24-26, is currently producing at rate of approximately 1,650 Mcfd. Once the production rate from that first zone stabilizes, the Company plans to open and sequentially flow-test two additional zones in that well. The second well, NF 42-35, is currently producing at a current rate of approximately 350 Mcfd and also continues to increase as drilling fluids diminish.
"The drilling and completion of our first new wells at North Fork Field has been accomplished quicker than originally anticipated," said David M. Hall, Miller Energy's Chief Operating Officer. "We were able to deliver two new wells and put them online within a few weeks' time from our original expected date to deliver just one well. Additionally, we have been able to come in under budget for both, averaging well-below the $9 million per well in expected gross cost."
"While we have waited to report results due to clean-up time, we are encouraged by the results so far, particularly at NF 24-26," stated Carl F. Giesler, the Company's Chief Executive Officer. "Even without additional production from the zones yet to be tested, NF 24-26 will provide greater than 20% IRR at current flow rates given our contracted sales prices of more than $6.50 per Mcf. As both wells are showing increasing production during clean-up, we look forward to providing a further update on our upcoming quarterly earnings and operations call."
"We will continue to exercise capex discipline by incorporating the field and well data we have gathered here together with that from the incumbent North Fork wells before taking next steps in this field," added Mr. Giesler. "We believe focusing on lower-cost and lower-risk gas drilling at North Fork is a viable and the most capital-responsible path forward for Miller Energy in this current oil price environment. Given what we have learned, we are confident we will continue to deploy capital at North Fork on an increasingly efficient and productive basis."
The Company also announced receipt in early February of approximately $21.2 million in cash tax credit payments from the State of Alaska. Miller Energy expects an additional cash tax credit payment of $20.6 million later this month. Both payments relate to the Company's operational activities performed in calendar 2014.
About Miller Energy Resources
Miller Energy Resources, Inc. is an oil and natural gas production company focused on Alaska. The Company has a substantial acreage, reserve, and resource position in the State, significant midstream and rig infrastructure to support production, and 100% working interest in and operatorship of most of its assets. Miller Energy has two over-arching objectives: first, to be a long-term partner of the State in responsibly developing Alaska's oil and gas resources; second, as the only public pure-play Alaska E&P, to be a straightforward vehicle for investors to participate in that development. Miller Energy manages its operations from Anchorage with additional administrative offices in the lower 48. The Company's common stock is listed on the NYSE under the symbol MILL. More information on Miller Energy can be found at www.millerenergyresources.com.
Statements Regarding Forward-Looking Information
Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Forward-looking statements are not guarantees of future activities and are subject to many risks and uncertainties. Due to such risks and uncertainties, actual events may differ materially from those reflected or contemplated in such forward-looking statements. Forward-looking statements can be identified by the use of the future tense or other forward-looking words such as "believe," "expect," "anticipate," "intend," "plan," "should," "may," "will," believes," "continue," "strategy," "position," "opportunity" or the negative of those terms or other variations of them or by comparable terminology. A discussion of these risk factors is included in the Company's periodic reports filed with the SEC.
Source: Miller Energy Resources, Inc.