On Oct. 29, Miller Energy Resources Inc. (NYSE: MILL) detailed executive, operational and financial updates.
The board of directors appointed Jeffrey R. McInturff as the interim CFO. He will replace John M. Brawley in the role, who will leave the company on Nov. 14. McInturff is currently the chief accounting officer, the company added.
"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," said CEO Carl F. Giesler. "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," he added.
Regarding operations, Miller said it is finalizing the completion of its RU-9 well. The Hemlock Formation was perforated and tested, and so was an interval in the Tyonek Formation.
COO David M. Hall said that initial results from both areas revealed high-quality, low water-cut oil.
When RU-9 is completed, proved undeveloped reserves in Redoubt, North Fork and WMRU fields will be focused on, as will low-risk wells at Badami Field in the North Slope, the company added.
Almost all the regulatory approvals for the Savant Alaska LLC acquisition have been received, Miller said, noting that the transaction is scheduled to close in November. The acquisition price is expected to be lowered to about $5.8 million from $9 million. It will add about 600 barrels of oil per day (bbl/d).
The sale, for about $3.3 million in cash, of Tennessee oil and natural gas assets is scheduled to close in November. The company’s cash flow is expected to increase by about $800,000 annually, Miller added.
Regarding finance, the senior credit facility lenders recently reaffirmed the borrowing base at $60 million. There is about $10 million in cash, $36 million drawn against the borrowing base and a tax credit application for about $21.2 million.
Giesler said the company has received “consistent” cash drilling tax credits from the state of Alaska.
Miller said it hedged more than 80% of its current oil production—about 456 Mbbl at $99.19 through the remainder of fiscal year (FY) 2015, and about 787 Mbbl at $95.36 during FY 2016.
Knoxville, Tenn.-based Miller Energy Resources Inc. operates in Alaska and the Appalachian Basin.
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