People | General News | People-Resignation | People-Promotion
Miller Names Interim CFO; Updates Strategic Processes
Print
|
Miller Energy Resources, Inc. has reported management changes and updates on its strategic processes and financial positon.
Management Changes
John M. Brawley, the Company's Chief Financial Officer, has informed Miller's Board of Directors that he intends to leave the Company on November 14, 2014 in order to assume a Chief Financial Officer position with another energy company. The Board of Directors has appointed Jeffrey R. McInturff, Miller's Chief Accounting Officer, as the Company's Interim Chief Financial Officer, effective upon Mr. Brawley's departure. The Company has initiated a formal search for Mr. Brawley's successor.
Carl F. Giesler, Miller's Chief Executive Officer, commented: "During John's tenure, the Company has made substantial progress in expanding its access to capital, lowering its cost of debt and improving its internal controls. We will miss John's leadership and judgment, and wish him the best in his new endeavors.
"We are fortunate to have Jeff to assume John's duties while we search for a permanent successor. Jeff has worked closely with John in all aspects of our financial and controls development and has the confidence of our board, management, auditors and lenders."
Strategic Processes Update
The Company announced that it has received nearly all the regulatory approvals for its acquisition of Savant Alaska, LLC and expects that transaction to close in November. Miller estimates that contractual purchase price adjustments from the May 1, 2014 effective date, as a result of ongoing production, will lower the effective acquisition price to approximately $5.8 million, down from $9.0 million.
Upon closing, the Company expects this acquisition will immediately add approximately 600 Bopd net production to Miller.
In addition, Miller has reached agreement to sell substantially all of its Tennessee oil and gas assets and related liabilities for approximately $3.3 million in cash. The Company expects that the transaction will close in November. Miller expects the sale of its Tennessee assets will reduce costs and increase the Company's cash flow by approximately $800,000 per year.
The Company has also announced that it continues its discussions with Buccaneer Energy and its principal lender to purchase substantially all Buccaneer Energy's Alaska operating assets out of bankruptcy. While negotiations continue, there is no guarantee that Miller will reach agreement with the sellers.
Financial Position Update
The Company's borrowing base was recently reaffirmed at $60.0 million by its senior credit facility lenders. Currently, the Company has approximately $10.0 million in cash, $36.0 million drawn against its borrowing base, a cash tax credit application outstanding for approximately $21.2 million and an additional application is expected to be filed in the next month for approximately $19.0 million. The Company has already received three cash tax credits this fiscal year, totaling $56.0 million.
Giesler added: "The Company has consistently been receiving cash drilling tax credits from the State of Alaska. In addition to these receipts, we have efficiently managed our borrowing base and cash flow to ensure sufficient liquidity to allow us to take advantage of our announced potential strategic acquisitions as well as to execute our development drilling program. We are also actively engaged in joint venture discussions with potential partners on our Sabre prospect as well as other drilling opportunities."
Given recent movements in oil prices, the Company also reaffirmed that it has more than 80% of its current oil production hedged. It has approximately 456 MBbls hedged at $99.19 through the remainder of fiscal year 2015 and approximately 787 MBbls at $95.36 during fiscal year 2016. Miller believes it has sufficient liquidity if oil prices remain at current levels for the foreseeable future.