|
Miller’s Cook Inlet asset value grows New reserves report hikes estimate to nearly $448 million; company anticipates added capital from stock offering, tax credits Wesley Loy For Petroleum News
Miller Energy Resources Inc. announced a substantial increase in the estimated value of its oil and gas reserves in Alaska’s Cook Inlet area.
The increase is based on a new reserves report from petroleum consultant Ryder Scott Co., Miller said in an Aug. 20 press release.
The report puts total proved developed and undeveloped reserves at 11.7 million barrels of oil equivalent as of July 31. That’s up from the previous estimate of 10.5 million barrels.
The report shows a reserves value of $447.6 million, up from $360.9 million.
The value is expressed as PV-10, which is the present value of estimated future oil and gas revenues, net of estimated direct expenses, discounted at an annual rate of 10 percent. The energy industry commonly uses PV-10 to estimate the present value of a company’s proved oil and gas reserves, according to Investopedia online.
“The updated reserve report reflects a substantial increase to our proved PV-10,” said Scott Boruff, Miller’s chief executive. “This increase demonstrates reserve growth in our Alaskan assets, including Redoubt, West McArthur River and North Fork. As we prove up additional fault blocks at Redoubt and begin drilling out our promising Sabre prospect, we expect further meaningful additions to our reserves, as well as strong increases in production.”
Growing portfolio Based in Knoxville, Tennessee, Miller Energy is a publicly traded company listed on the New York Stock Exchange.
It recently reported total net production of just over 3,000 barrels of oil equivalent per day.
Miller entered the Alaska oil and gas arena in late 2009, when subsidiary Cook Inlet Energy LLC acquired a collection of oil and gas assets out of the bankruptcy estate of a prior operator.
Today, Cook Inlet Energy operates the Osprey offshore platform in the Redoubt unit, and the West McArthur River oil field on the inlet’s west side.
Since its start, the company has focused on restoring and growing production from these assets. It also is engaging in new drilling. One upcoming project is the Sabre well, to be drilled near the West McArthur River field. The company is modifying a newly acquired rig to drill Sabre No. 1, which could spud in November or December.
The company added significantly to its Cook Inlet production early this year in acquiring the North Fork natural gas field on the southern Kenai Peninsula.
Elsewhere, Miller anticipates closing a deal in December to take over the Badami oil field on Alaska’s North Slope.
Amassing capital Miller has worked aggressively to raise capital for its Alaska operations. The company recently announced a public offering of preferred stock, priced at $24.50 per share.
“Gross proceeds to the company are expected to be approximately $18.375 million,” Miller said in an Aug. 21 press release.
“The company intends to use the net proceeds, if any, from the offering for general corporate purposes,” Miller said.
The company also announced it had received a certificate for $31.2 million in tax credits from the state of Alaska.
“The tax credits are submitted for reimbursement and are anticipated to be received in cash over the next few weeks,” Miller said.
The state offers such tax credits to encourage oil and gas development.
With the preferred stock proceeds and tax credits, plus $24 million available from a revolving credit facility, Miller said it has more than $70 million in near-term liquidity in addition to its operating revenue.
That puts the company in strong position to pursue its goals.
“We are excited about our drilling program and have the infrastructure, reserves and liquidity in place to convert those opportunities into significant production and cash flow,” said John Brawley, Miller’s chief financial officer.
| 