Miller Energy Resources Obtains North Slope Pricing for its Alaska Oil
KNOXVILLE, Tenn., March 21, 2012 /PRNewswire/ -- Miller Energy Resources, Inc. ("Miller") (NYSE: MILL), a high growth oil and natural gas exploration, production and drilling company announced today that its wholly-owned subsidiary, Cook Inlet Energy, LLC, has executed a new contract for the sale of its Alaska oil, which resulted in a substantial increase in the purchase price.
The previous contract priced the oil based on the NYMEX Settlement prices for West Texas Intermediate (WTI), less certain transportation, quality, and other deductions. The new contract provides for pricing based on West Coast Alaskan North Slope (ANS) crude oil, so long as the ANS price exceeds the WTI price by at least $2.285. Similar deductions are in place for transportation, quality, and other costs. Currently, ANS is trading approximately $15 above WTI.
"We are pleased to be receiving ANS pricing for our Alaskan oil. ANS tracks Brent crude oil prices very closely," said Scott M. Boruff, Miller's CEO. "We expect this will result in Miller receiving approximately $14 more per barrel at today's prices. If the pricing differential between ANS and WTI continues, Miller would expect this contract to add approximately $1.1 million per quarter to Adjusted EBITDA for every 1,000 barrels of oil production per day in our Alaskan operations. Accordingly, we expect this to have a very positive effect on our PV-10 values which will be released after our fiscal year ends."
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 Huntsville, Tennessee with offices in Anchorage, Alaska and Knoxville, Tennessee. The company's common stock is listed on the NYSE under the symbol MILL.
Web Site: http://www.millerenergyresources.com
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 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.
SOURCE Miller Energy Resources, Inc.