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Miller secures $5M in financing Tennessee company aims to expand its oil, gas operations in Alaska’s Cook Inlet basin, restart production from idle Osprey platform Wesley Loy For Petroleum News
Miller Energy Resources announced Dec. 31 it had secured $5 million in short-term financing to expand its oil and gas operations in Alaska’s Cook Inlet basin.
One project on Miller’s list is restarting production from the idle Osprey platform.
Scott M. Boruff, Miller’s chief executive, described the $5 million line of credit as a “bridge loan” until the company can establish a larger, permanent financing arrangement in February.
Texas-based PlainsCapital Bank provided the line of credit at an interest rate of 6 percent, Miller said.
Tennessee-based Miller operates in Alaska through its subsidiary, Anchorage-based Cook Inlet Energy LLC.
“The proceeds from this financing will be utilized to fund the initial phase of Miller’s winter development program in the Cook Inlet area,” a company press release said. “The emphasis of the winter program is to target wells that were producing, but were shut-in by previous owners who lacked the equipment and funds to perform the necessary repairs. A key component of the initial phase of Miller’s winter development program will be to return the Osprey Platform to production.”
Miller’s Alaska stake Miller and Cook Inlet Energy entered the ranks of Alaska oil and gas producers in late 2009, when they picked up assets formerly held by California-based Pacific Energy Resources Ltd., which liquidated through bankruptcy.
The properties, on the west side of Cook Inlet, include the West McArthur River oil field, the West Foreland natural gas field, the Osprey platform and the Kustatan shoreside production facility.
Since the purchase, Cook Inlet Energy has been working to restart and improve production from its wells.
The Osprey platform is the southernmost platform in Cook Inlet. Forcenergy installed Osprey over the Redoubt Shoal field in 2000, but oil production from the platform proved a disappointment.
The platform nearly became a ward of the state, but Miller and Cook Inlet Energy took it over as part of the Pacific Energy deal.
‘Low hanging fruit’ Boruff, the Miller CEO, said the new financing will allow his company to continue its rapid growth.
“This financing will allow us to continue to boost our production in Alaska without any dilution of our stock or encumbering any of our assets,” he said. “We have been committed to obtaining the lowest cost financing available, and this bridge loan allows us to stay on schedule to meet our 2011 operating and exploration goals while we complete documentation of the permanent credit facility.”
Boruff continued: “Miller has achieved tremendous growth over the last year. We are well positioned to continue our development by targeting additional low hanging fruit that has the highest probability of successfully adding production with high returns on invested capital. Our team in Alaska, led by David Hall, has already initiated the rework of additional wells and I look forward to bringing additional production on line as we continue to create value for our shareholders.”
Miller, which trades as Miller Petroleum Inc. (MILL) on the Nasdaq stock exchange, says its focus is Cook Inlet and Tennessee’s Appalachian basin including the Chattanooga shale.
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