KNOXVILLE, Tenn.--(BUSINESS WIRE)--Miller Energy Resources (“Miller”) (NYSE: MILL) announced that it expanded its development potential in the Susitna Basin of Alaska with the addition of an oil and gas exploration license for 45,764 acres. The new acreage is located south of the Company’s existing Licenses No. 2 and No. 4 in the Susitna Basin of Alaska. With the addition of License No. 5, Miller Energy controls nearly 700,000 acres of State of Alaska oil and gas lands, the largest number of acres under lease and license by any company for oil and gas exploration on state lands.
“The addition of the new license in the Susitna Basin strengthens our position in a key area of south central Alaska that is located north of Anchorage,” stated Scott M. Boruff, Chief Executive Officer of Miller Energy Resources. “We believe our extensive acreage in the Susitna Basin holds excellent potential for Miller, especially for natural gas that sells for a premium in Alaska. The area is adjacent to the well-proven, prolific oil and gas bearing Cook Inlet Basin that has produced over one billion barrels of oil and seven trillion cubic feet of natural gas.
“We elected to pursue the new license in the Susitna Basin based on its proximity to our existing acreage and the potential to leverage our onshore drilling program in this area. We are currently evaluating the acreage and developing a work program,” concluded Mr. Boruff.
Cook Inlet Energy, LLC, a wholly owned subsidiary of Miller, was issued the license for the new acreage in the Susitna Basin. The initial term of the license is five years. The license’s work commitment requires Cook Inlet Energy to perform exploration work with qualifying direct expenditures totaling a minimum of $250,000 over the five-year term. Upon timely completion of the work commitment, Cook Inlet Energy will have the option to convert any or all of the remaining license acreage to oil & gas leases with a five-year term and a royalty rate of 12.5% and a $3.00/acre annual rental rate.
As part of the license agreement, Miller incurred a one-time license fee of $1 per acre ($45,765) and posted an initial performance bond of $50,000. An annual performance bond is required until the total work commitment is fulfilled.
About Miller Energy Resources
Miller Energy Resources, Inc. is a high growth oil and natural gas exploration, production and drilling company operating in multiple exploration and production basins in North America. Miller’s focus is in Cook Inlet, Alaska and in the heart of Tennessee's prolific and hydrocarbon-rich Appalachian Basin including the Chattanooga Shale. Miller is headquartered in Knoxville, Tennessee with offices in Anchorage, Alaska and Huntsville, Tennessee. The company’s common stock is listed on the NYSE under the symbol MILL.
Statements Regarding Forward-Looking Information
Certain statements in this press release and elsewhere by Miller Energy Resources¸ Inc. are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve the implied assessment that the resources described can be profitably produced in the future, based on certain estimates and assumptions. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated by Miller Energy Resources, Inc. and described in the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, adverse general economic conditions, operating hazards, drilling risks, inherent uncertainties in interpreting engineering and geologic data, competition, reduced availability of drilling and other well services, fluctuations in oil and gas prices and prices for drilling and other well services, fluctuations in the US dollar and other currencies, the availability of sufficient capital to fund its anticipated growth, fluctuations in the prices of oil and gas, the competitive nature of its business environment, its dependence on a limited number of customers, its ability to comply with environmental regulations, changes in government regulations which could adversely impact its businesses well as other risks commonly associated with the exploration and development of oil and gas properties. Additional information on these and other factors, which could affect Miller’s operations or financial results, are included in Miller Energy Resources, Inc.’s reports on file with United States Securities and Exchange Commission including its Annual Report on Form 10-K, as amended, for the fiscal year ended April 30, 2011. Miller Energy Resources, Inc.’s actual results could differ materially from those anticipated in these forward- looking statements as a result of a variety of factors, including those discussed in its periodic reports that are filed with the Securities and Exchange Commission and available on its Web site (www.sec.gov). All forward-looking statements attributable to Miller Energy Resources or to persons acting on its behalf are expressly qualified in their entirety by these factors. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We assume no obligation to update forward-looking statements should circumstances or management's estimates or opinions change unless otherwise required under securities law.