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Court approves Miller bankruptcy plan
KRISTEN NELSON Petroleum News
The U.S. Bankruptcy Court for the District of Alaska approved Chapter 11 reorganization for Miller Energy Resources and its subsidiaries in a Jan. 28 order confirming a joint plan of reorganization.
Miller Energy and affiliated debtor entities filed for Chapter 11 relief Oct. 1. The company’s subsidiaries working in Alaska include Cook Inlet Energy, Anchor Point Energy, Savant Alaska, Nutaaq Operating; the company’s Lower 48 subsidiaries are also included in the filings.
A joint plan of reorganization was filed Oct. 30, with revisions Dec. 17 and a plan supplement filed Jan. 20. Holders of claims voted in favor of the plan, with holders of $151 million in lender secured claims voting 10 to nothing in favor and 75 of 73 holders of some $57.6 million in unsecured claims voting in favor.
The plan establishes a creditor trust for the class 4 claims, with $3.5 million; if class 4 holders of debt had rejected the plan, $1 million would have been distributed.
The court said that in approving the plan it considered the purposes of reorganization: reorganizing the debtor’s businesses; preserving and maximizing the value through an efficient reorganization; restructuring the debtor’s capital structure; maximizing recovery to holders of claims; and preserving jobs of debtor’s employees.
Going private Miller has been a publicly traded company; the reorganized company will be privately held. The company, founded in 1967, went public in 1997 and entered Alaska in 2009 when it acquired the Alaska operations of Pacific Energy, which was in bankruptcy. In 2014 Miller acquired Savant Alaska and that same year divested substantially all of its Appalachia assets - the original focus of the company - to concentrate on Alaska.
In early 2014 Miller refinanced a $100 million credit facility. The new credit agreement, with Apollo Investment Corp. and affiliates of Highbridge Capital Strategies, provided a $175 million term credit facility.
Debtors owe some $189.7 million under the credit agreement.
Last year the company was in default under its credit agreement and efforts to refinance were unsuccessful; the company cited the dropping price of oil and unsuccessful drilling.
The restructuring will satisfy some $189 million through conversion of the lender secured claim into all of the issued and outstanding shares of new Miller common stock and issuance of new notes.
New board The new board consists of: Don Dimitrievich, managing director, Highbridge Principal Strategies; Gerald Girardi, managing director, Apollo Global Management; Daniel Vogel, also with Apollo; Jeffrey Fitts, managing director, Highbridge; and Carl Giesler, chief executive officer of the reorganized debtors.
Officers of the reorganized debtors are Carl Giesler, CEO; Leland Tate, senior vice president and chief operating officer; Phillip G. Elliott, senior vice president and chief financial officer; and Conrad Perry, senior vice president and drilling manager.
Miller and its subsidiaries - Cook Inlet Energy and Savant are its producing companies - have assets concentrated in Southcentral Alaska and at Badami on the North Slope. In a Jan. 22 reply to objections Miller listed Alaska infrastructure which it owns as storage and processing facilities, the Osprey offshore production platform, numerous oil and gas pipelines and four drilling rigs.
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