SOURCE: Miller Energy Resources

Miller Energy Resources

February 25, 2013 08:30 ET

Miller Energy Resources Completes RU-3 Gas Well

RU-3 Gas Well Flowing

ANCHORAGE, AK--(Marketwire - Feb 25, 2013) -   Miller Energy Resources, Inc. (Miller) (NYSE: MILL) announced that its Alaskan subsidiary, Cook Inlet Energy (CIE), has successfully brought a new gas well, RU-3, into production. CIE completed the RU-3 gas workover on Osprey Platform with Miller's Rig-35. After a successful well test on February 16, the gas well was immediately put into production. This new source of natural gas, together with gas produced from CIE's RU-4 well which was previously brought online, further eliminates the need to purchase costly fuel gas from third parties. RU-3 showed an initial post-workover shut-in pressure of 2,135 PSI. The subsequent four-point flow test culminated in a peak flow rate of 3.7 million cubic feet of gas per day (MMscf/d) at a 25/64ths inch choke setting.

The RU-3 work-over consisted of re-completing the well to access a behind pipe gas accumulation in the Lower Tyonek gas sands at a measured depth of approximately 14,800'. RU-3 encountered an average of 20' of net gas pay across an estimated 150-acre reservoir with an estimated minimum of 1.2 BCF of remaining recoverable reserves. The zone produced a total of 452 MMscf between May and December of 2003. At that time, the well went off production due to mechanical problems and had subsequently been plugged back to a shallower zone for an attempted completion. CIE successfully completed a complex fishing job to remove materials and equipment left in the wellbore from this previous completion attempt in order to reopen the deeper proven reservoir and reestablish production.

CIE is currently producing both RU-3 and RU-4 gas wells at reduced rates while supplying its own fuel gas needs. Company is in discussions with third parties to establish gas sales.

"We're very pleased with RU-3 four-point flow test results as well as recent success with RU-4; this now establishes gas production from two out of six compartmentalized fault blocks on the Redoubt structure which we have high level of confidence the remaining un-tapped fault blocks will prove gas productive," explained David Hall, CIE's CEO.

"We could not be more pleased with the performance of RU-3 and our other newly recompleted wells in the Cook Inlet," said Scott M. Boruff, Miller's CEO. "The results seen with RU-3 and the recently recompleted RU-1 and RU-4 wells vindicate the strategy we have been pursuing in this basin, and clearly demonstrate the value both of our assets and of our operational team in Alaska." 

About Miller Energy Resources
Miller Energy Resources, Inc. is an 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 Mississippian Lime and Chattanooga Shale. Miller is headquartered in Knoxville, Tennessee with offices in Anchorage, Alaska and Huntsville, Tennessee. The company's common stock is listed on the NYSE under the symbol MILL.

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, the potential for Miller Energy to experience additional operating losses; high debt costs under its existing senior credit facility; potential limitations imposed by debt covenants under its senior credit facility on its growth and ability to meet business objectives; the need to enhance management, systems, accounting, controls and reporting performance; uncertainties related to the filing of its Form 10-K for 2011; litigation risks; its ability to perform under the terms of its oil and gas leases, and exploration licenses with the Alaska DNR, including meeting the funding or work commitments of those agreements; its ability to successfully acquire, integrate and exploit new productive assets in the future; its ability to recover proved undeveloped reserves and convert probable and possible reserves to proved reserves; risks associated with the hedging of commodity prices; its dependence on third party transportation facilities; concentration risk in the market for the oil we produce in Alaska; the impact of natural disasters on its Cook Inlet Basin operations; adverse effects of the national and global economic downturns on our profitability; the imprecise nature of its reserve estimates; drilling risks; fluctuating oil and gas prices and the impact on results from operations; the need to discover or acquire new reserves in the future to avoid declines in production; differences between the present value of cash flows from proved reserves and the market value of those reserves; the existence within the industry of risks that may be uninsurable; constraints on production and costs of compliance that may arise from current and future environmental, FERC and other statutes, rules and regulations at the state and federal level; the impact that future legislation could have on access to tax incentives currently enjoyed by Miller; that no dividends may be paid on its common stock for some time; cashless exercise provisions of outstanding warrants; market overhang related to restricted securities and outstanding options, and warrants; the impact of non-cash gains and losses from derivative accounting on future financial results; and risks to non-affiliate shareholders arising from the substantial ownership positions of affiliates. 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, as amended, for the fiscal year ended April 30, 2012. 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 ( 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.

Contact Information

  • For more information, please contact the following:

    Derek Gradwell
    MZ Group
    SVP Natural Resources
    Phone: 949-259-4995
    Email: Email Contact