Miller settles with dissidents, Gov. Richardson to join board

Back in December, a group of Miller Energy Resources Inc. shareholders had some very tough words for the company’s leadership.

The dissidents said while the company had great assets and a strong operational team in Alaska, Miller’s stock was “dramatically undervalued due largely to the incompetence of Miller’s senior management and lack of relevant experience, together with its excessive compensation and unacceptable self-dealing.”

Fast forward to March 31, when Miller announced that the shareholder revolt had ended and all is apparently just wonderful now.

The settlement involves, among other things, infusing new blood into the small, Tennessee-based company’s board of directors.

Miller said it had nominated a big name, Bill Richardson, for election to the board at the company’s planned April 16 annual shareholders meeting. Richardson is the former governor of New Mexico who served as secretary of energy during the Clinton administration.

Aside from the board reshuffle, Miller also recently trimmed management compensation, specifically stock options.

The settlement is with a group that called itself Concerned Miller Shareholders.

“We value input from all of our shareholders,” Miller’s chief executive, Scott Boruff, said in a March 31 press release announcing the accord. “We are very happy to have settled the points of contention between us and CMS, and are especially pleased that Gov. Richardson has agreed to stand for election as a director at our upcoming annual meeting.”

Parent of Alaska producer

The great majority of Miller’s oil and gas production comes from Alaska properties including the offshore Osprey platform, the onshore West McArthur River oil field, and the North Fork natural gas field on the Kenai Peninsula.

Miller shares are listed on the New York Stock Exchange. The stock price closed April 2 at $5.73, down 18.6 percent year to date.

Paul Kessler, spokesman for Concerned Miller Shareholders, was quoted in the Miller press release:

“We have been encouraged by the many positive changes Miller has made recently,” he said, citing the appointment of a new chief financial officer, the revised executive compensation plan and the addition of two new independent directors plus Richardson.

“We are encouraged by these important steps and have every confidence that this new and improved board will drive shareholder value and improve Miller for the benefit of all shareholders,” Kessler said.

The shareholder group has agreed to withdraw its proposed slate of director candidates and vote its shares in favor of the Miller board’s nominees, the press release said.

David Hall, Miller’s point man in Alaska, is expected to come off the board after the annual meeting. Hall, however, will continue in his management capacity, the company said.

—Wesley Loy