Huntsville, TN (2009-12-23) Miller Petroleum, Inc. dba Miller Energy Resources recently announced that it had acquired Alaskan oil and gas assets, valued at $325 million, from Pacific Energy Resources (“Pacific Energy”) through a Chapter 11 U.S. Bankruptcy proceeding in Delaware.
In the acquisition, Miller reportedly acquired total reserves of over 13.2 million barrels of oil and 15.5 BCF of natural gas, including total proved reserves of 5.6 million barrels of oil and 3.7 BCF of natural gas. The discounted net present value of the Alaska reserves that Miller acquired is estimated at over $325 million dollars, including $119 million dollars of proven reserves, $185 million of probable reserves and $23 million of possible reserves.
In addition, Miller has acquired onshore and offshore production and processing facilities, an offshore energy platform, over 600,000 net acres of land with thousands of acres of 3-D geologic seismic data, miscellaneous roads, pads and facilities all of which originally cost almost $300 million to build and install over the last 5 years. Miller will operate the facilities through its 100% owned subsidiary, Cook Inlet Energy LLC (“Cook”)
Miller Energy Resources paid a total of $2.25 million dollars for the Alaskan oil and gas assets, and an additional $2.22 million dollars for contract cure payments, bonds and other local, federal and State of Alaska requirements to operate the facilities.
The Alaska assets that Miller acquired from Pacific Energy were originally acquired from Forest Oil Corp. in 2007 for $464 million. In 2009, Pacific Energy declared bankruptcy and later abandoned its assets in Alaska in September 2009. In October 2009, Miller entered into an agreement to acquire the majority of Pacific Energy’s Alaskan assets. In November 2009, the U.S. Bankruptcy Court approved the sale and the acquisition closed on December 11, 2009.
Also on December 10, 2009, Miller Petroleum, Inc. acquired 100% of the membership interests in Cook Inlet Energy, LLC, an Alaska limited liability company from its members. As consideration, Miller issued the sellers, who were unrelated third parties, stock warrants to purchase three million five hundred thousand (3,500,000) shares of Miller common stock, plus $250,000 and certain expense related to the acquisition.
Miller’s initial Alaskan production is estimated to be 280 barrels of oil a day. Its three month target is over 800 barrels a day with a goal of pushing production over 1,100 barrels daily by the fourth quarter of 2010 which would generate more than $30 million dollars annually in gross revenue.
Miller Energy Resources is an oil and natural gas exploration, production and drilling company operating in multiple exploration and production projects in North America. Miller’s focus is in Cook Inlet, Alaska and in the heart of Tennessee’s prolific and hydrocarbon-rich Appalachian Basin
Miller is headquartered in Huntsville, Tennessee with offices in Knoxville and New York City.