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Miller says not bankrupt, just making SEC required notification
Miller Energy Resources said July 15 that it does not intend to file for bankruptcy and believes its assets have value exceeding its debts.
In a July 14 press release the company said it expects to file its 10-K for full fiscal year July 29, taking advantage of the 15-day extension afforded by the Securities and Exchange Commission. In a July 14 SEC filing Miller said it requires additional time to complete its financial statements based on “the substantial drop in oil prices, drilling results during the year” and its “on-going capital repositioning process.”
“In addition to those issues,” Miller said in its SEC filing, “the registrant believes that, due to the constraining structure of the registrant’s current debt, its continued capital repositioning process as well as potential factors not under the registrant’s control, there is, from an accounting perspective, substantial doubt about its ability to continue as a going concern. Because of these circumstances, the registrant is undertaking an asset impairment analysis on certain of its assets,” Miller said, additional work which has delayed completion of its income tax provision and year-end financial statements.
Conference call July 29 Miller said it would host a conference call and webcast July 29, and at that time provide a comprehensive shareholder update including the status of its capital repositioning process.
“Management remains confident that the Company’s opportunities going-forward will enable it to overcome any current financial difficulties and intends to disclose appropriate details of the Company’s future plans” in the conference call, Miller said in its July 14 press release.
No bankruptcy filing In its July 15 press release the company said it “believes its assets have value that exceeds its debt and continue to offer significant opportunities for growth,” and said it “does not intend, under current circumstances, to file for bankruptcy. Accounting convention requires that, under certain circumstances, publicly reporting companies must inform their investors that there may be substantial doubt about their ability to continue as a going concern,” and under that convention, Miller said, it made such a statement.
The company said it “believes these current circumstances will be ameliorated with the successful completion of its capital repositioning process,” and said it has “received and is considering multiple proposals made by various potential counterparties.”
Miller said it signed a non-binding letter of intent with a private financing source July 10, and if that loan is closed it “will substantially refinance Miller Energy’s existing indebtedness.”
It said it has also received and is evaluating “several proposals that would complement such a primary refinancing,” including a proposal to purchase certain non-core assets which would provide potential infrastructure financing made make a minority equity investment in the company.
State tax credits Miller said it received a state of Alaska tax credit certificate June 12 for some $33 million, has received some $9.3 million of that in cash and expects to receive the remainder in the next few weeks.
In March and April the company said, it applied for an additional approximately $9.4 million in state tax credits and expects to receive those funds in the next few months, with the intention to use that cash to pay down its first-lien lenders, manage its accounts payable and invest in growing its production.
Miller said management has reduced combined operating and G&A costs by some $9 million on an annualized basis and reduced capex incurred to less than $7 million in the last quarter.
Miller has production in Cook Inlet and on the North Slope at Badami.
- KRISTEN NELSON
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