KNOXVILLE, TN -- (Marketwired) -- 11/21/14 -- Miller Energy Resources, Inc. (the "Company" or "Miller") (NYSE: MILL) announced the close of the sale of its Tennessee assets as well as an update on its RU-9 well.
Yesterday, Miller closed the previously-announced sale of substantially all of its Tennessee oil and gas assets for a purchase price of approximately $3.3 million in cash. The Company has also liquidated its remaining oil and gas inventory in that State, yielding approximately $0.6 million in net cash proceeds in addition to the purchase price. Miller expects the sale of its Tennessee operations will reduce costs and increase the Company's cash flow by approximately $800,000 per year.
"Tennessee is where our Company got its start, and we think our buyer will have great success there," said Carl F. Giesler, Miller's Chief Executive Officer. "At the same time, this sale was the right strategic move for us. It allows us to focus our efforts as well as the market's attention on our substantial Alaskan oil and gas resources and related infrastructure. We believe that concentrating on those assets will realize the greatest value for our shareholders."
Additionally, the Company announced that its RU-9 well entered production. Prior to experiencing a recent electrical failure, oil production from the well had ramped to approximately 100 Bopd with a continued increasing oil cut. The Company is evaluating the optimal way to return the well to production.
"While the oil cut had continued to rise moderately and the flow rate hadn't stabilized, the production to date from RU-9 has not met our expectations given earlier tests," said Mr. Giesler. "Going forward, we will re-focus our drilling program on lower-risk development opportunities at our North Fork, Redoubt and, after the closing of our Savant acquisition, Badami fields in order to grow steadily our production and cash flow."
The Company's overall production is currently approximately 4.2 Boepd net. Miller is awaiting final regulatory approvals for its acquisition of Savant Alaska, LLC. Upon closing, the Company expects this acquisition will immediately add approximately 600 Bopd net production to Miller.
About Miller Energy Resources
Miller Energy Resources, Inc. is a domestic oil and natural gas exploration and production focused on Alaska. The Company's enterprises encompass production and reserves onshore and offshore in the Cook Inlet area, approximately 62MBPD of storage and processing infrastructure, the Osprey offshore production platform and four owned drilling rigs. Miller 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.
Statements Regarding Forward-Looking Information
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Source: Miller Energy Resources
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