July 15, 2015 08:00 ET
Miller Energy Provides Clarifying Statement and Announces Receipt of State Tax Credit Funds
Additionally Outlines Results From Financing Efforts
HOUSTON, TX--(Marketwired - July 15, 2015) - Miller Energy Resources, Inc. ( NYSE : MILL) ("Miller Energy" or the "Company") today provided clarifying comments to announcements made in its press release dated July 14, 2015. The Company also provided an update on its on-going capital repositioning process as well as its financial and operational position.
Miller Energy believes its assets have value that exceeds its debt and continue to offer significant opportunities for growth. The Company does not intend, under current circumstances, to file for bankruptcy. Accounting convention requires that, under certain circumstances, publicly reporting companies must inform their investors that there may be substantial doubt about their ability to continue as a going concern. Accordingly, and consistent with that convention, under its current circumstances, the Company made such a statement.
Miller Energy believes these current circumstances will be ameliorated with the successful completion of its capital repositioning process. As part of that process, the Company has received and is considering multiple proposals made by various potential counterparties. On July 10, 2015, Miller Energy signed a non-binding letter of intent with a private financing source for a loan that, if closed, will substantially refinance Miller Energy's existing indebtedness. Additionally, the Company has received and is evaluating several proposals that would complement such a primary refinancing. These include a proposal to purchase certain of the Company's non-core assets in a credit-enhancing transaction, to provide potential infrastructure financing and to make a minority equity investment in the Company.
Regarding its liquidity and separate from its capital repositioning process, on June 12, 2015, Miller Energy received from the State of Alaska a tax credit certificate in the amount of approximately $33.0 million. The Company has already received approximately $9.3 million of that amount in cash and expects to receive the remainder in the next few weeks. Furthermore, the Company in March and April applied for an additional approximately $9.4 million in further state tax credits and expects receipt of those funds within the next few months. The Company intends to use this cash to pay-down its first-lien lenders, manage its accounts payable in a fiscally-prudent manner and invest in growing its production in a disciplined, risk-mitigating manner.
Relatedly, management has reduced combined operating and G&A costs by approximately $9 million on an annualized basis and reduced capex incurred to less than $7 million in the last quarter.
The Company will provide a further and more detailed update on its capital repositioning process, its go-forward strategy as well as its financial and operating results for the most recent fiscal quarter and year periods on the previously announced investor conference call scheduled for July 29, 2015.
