MILLER ENERGY RESOURCES, INC. |
(Exact name of registrant as specified in its charter) |
Tennessee | 001-34732 | 62-1028629 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
9721 Cogdill Road, Suite 302, Knoxville, TN | 37932 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code | (865) 223-6575 |
not applicable |
(Former name or former address, if changed since last report) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
MILLER ENERGY RESOURCES, INC. | |||
Date: September 10, 2012 | |||
By: | /s/ Scott M. Boruff | ||
Scott M. Boruff, Chief Executive Officer |
• | Total revenues were $8.3 million for the first quarter of fiscal 2013 compared to $8.9 million in the first quarter of the prior year. Revenues benefited from an increase in the price of oil sold but were offset by lower production. |
• | Average realized oil prices rose 4.1% to $99.59 per barrel in the first quarter of fiscal 2013 compared with $95.69 in the first quarter of fiscal 2012. |
• | Net production was 77,079 BOE for the first quarter of fiscal 2013 compared with $2.8 million in the first quarter of fiscal 2012. |
• | Recorded an $8.9 million gain on derivatives in the first quarter of fiscal 2013 compared with a gain of $3.8 million in the first quarter of fiscal 2012. The 2013 results included a $4.3 million realized cash gain from the termination of commodity derivative contracts, which were settled against the NYMEX WTI Cushing Index. During the first quarter of fiscal 2013, the Company also entered into several new commodity derivative contracts for comparable volume which will be settled against the Brent Crude Oil Index. |
• | Invested $9.3 million in capital expenditures during the first quarter of fiscal 2013 to accelerate oil development opportunities in Alaska. |
• | Sold mid-stream assets in Alaska for $2.0 million. The sale was for a generator in Miller's Kustatan facility in Alaska. |
• | Closed a new $100 million credit facility to provide funding for Miller's development and drilling programs. The proceeds were used to pay off a previous credit facility and redeem the Series A Cumulative Preferred Stock. The remaining funds available under the credit facility will be used to increase oil production both onshore and offshore in Alaska through the reworking and drilling of new wells on the Osprey platform and the reworking of previously producing oil wells in Tennessee. |
• | Mobilized Rig 34 to the Otter natural gas prospect and completed initial drill to 5,680 feet. Mud logs reported two significant hydrocarbon gas shows in the zone of interest and fracking of the Otter #1 well is scheduled for mid-September. |
• | Hired Chief Accounting Officer to strengthen Miller's accounting, financial reporting, and internal controls. |
• | Received approval for Rig 35 from the Alaska Oil and Gas Conservation Commission and commenced drilling in August 2012 to rework existing wells on the Osprey platform. |
• | Acquired the Tennessee assets of PDC Energy, Inc. in September 2012, increasing Miller's interest in oil and gas wells in the Appalachian Basin of East Tennessee where Miller intends to begin drilling horizontal wells targeting the Mississippian Lime. |
July 31, 2012 | April 30, 2012 | ||||||
ASSETS | (In thousands, except share data) | ||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 1,892 | $ | 3,971 | |||
Restricted cash | 1,605 | 2,250 | |||||
Accounts receivable | 2,880 | 3,107 | |||||
State production credits receivable | 2,958 | 2,958 | |||||
Inventory | 1,866 | 1,835 | |||||
Prepaid expenses | 1,887 | 482 | |||||
13,088 | 14,603 | ||||||
OIL AND GAS PROPERTIES, NET | 478,131 | 475,802 | |||||
EQUIPMENT, NET | 39,020 | 33,728 | |||||
OTHER ASSETS: | |||||||
Land | 542 | 542 | |||||
Restricted cash, non-current | 9,880 | 9,875 | |||||
Deferred financing costs, net of accumulated amortization | 5,231 | 1,426 | |||||
Other assets | 624 | 413 | |||||
$ | 546,516 | $ | 536,389 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 11,785 | $ | 9,504 | |||
Accrued expenses | 5,172 | 6,744 | |||||
Short-term portion of derivative instruments | 1,396 | 2,803 | |||||
Current portion of long-term debt | 1,500 | 24,130 | |||||
19,853 | 43,181 | ||||||
OTHER LIABILITIES: | |||||||
Deferred income taxes | 168,440 | 167,319 | |||||
Asset retirement obligation | 18,650 | 18,366 | |||||
Long-term portion of derivative instruments | 1,716 | 7,700 | |||||
Long-term debt | 38,500 | — | |||||
Total Liabilities | 247,159 | 236,566 | |||||
COMMITMENTS AND CONTINGENCIES (Note 14) | |||||||
MEZZANINE EQUITY: | |||||||
Series A cumulative preferred stock, redemption amount of $11.2 million | — | 8,818 | |||||
STOCKHOLDERS' EQUITY: | |||||||
Common stock, $0.0001 par, 500,000,000 shares authorized, 41,959,393 and 41,086,751 shares issued and outstanding, respectively | 4 | 4 | |||||
Additional paid-in capital | 72,976 | 64,813 | |||||
Retained earnings | 226,377 | 226,188 | |||||
299,357 | 291,005 | ||||||
$ | 546,516 | $ | 536,389 |
For the Three Months Ended | |||||||
July 31, 2012 | July 31, 2011 | ||||||
(In thousands, except share and per share data) | |||||||
REVENUES: | |||||||
Oil sales | $ | 7,646 | $ | 8,191 | |||
Natural gas sales | 83 | 128 | |||||
Other | 533 | 536 | |||||
8,262 | 8,855 | ||||||
OPERATING EXPENSES: | |||||||
Oil and gas operating | 3,974 | 3,796 | |||||
Cost of other revenue | 548 | 227 | |||||
General and administrative | 5,330 | 5,772 | |||||
Exploration expense | 29 | 32 | |||||
Depreciation, depletion and amortization | 3,125 | 3,373 | |||||
Accretion of asset retirement obligation | 284 | 269 | |||||
Other operating income, net | (25 | ) | (892 | ) | |||
13,265 | 12,577 | ||||||
OPERATING LOSS | (5,003 | ) | (3,722 | ) | |||
OTHER INCOME (EXPENSE): | |||||||
Interest income | 3 | 1 | |||||
Interest expense | (134 | ) | (496 | ) | |||
Gain on derivatives, net | 8,941 | 3,756 | |||||
Other income (expense), net | (75 | ) | 31 | ||||
8,735 | 3,292 | ||||||
INCOME (LOSS) BEFORE INCOME TAXES | 3,732 | (430 | ) | ||||
Income tax (provision) benefit | (1,121 | ) | 247 | ||||
NET INCOME (LOSS) | 2,611 | (183 | ) | ||||
Accretion of preferred stock | (2,422 | ) | — | ||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | 189 | $ | (183 | ) | ||
INCOME PER COMMON SHARE: | |||||||
Basic | $ | 0.00 | $ | 0.00 | |||
Diluted | $ | 0.00 | $ | 0.00 | |||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES: | |||||||
Basic | 41,425,645 | 40,339,610 | |||||
Diluted | 43,807,338 | 40,339,610 |
For the Three Months Ended | |||||||
July 31, 2012 | July 31, 2011 | ||||||
(In thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income (loss) | $ | 2,611 | $ | (183 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation, depletion, and amortization | 3,125 | 3,561 | |||||
Expense from issuance of equity | 2,075 | 2,716 | |||||
Deferred income taxes | 1,121 | (247 | ) | ||||
Gain on derivative instruments, net | (4,880 | ) | (3,756 | ) | |||
Accretion of asset retirement obligation | 284 | 269 | |||||
Changes in operating assets and liabilities: | |||||||
Receivables | 227 | (33 | ) | ||||
Inventory | (259 | ) | 75 | ||||
Prepaid expenses and other assets | (1,616 | ) | (244 | ) | |||
Accounts payable and accrued expenses | 920 | 645 | |||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 3,608 | 2,803 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchase of equipment and improvements | (4,611 | ) | (12,790 | ) | |||
Proceeds from sale of equipment | 2,000 | — | |||||
Capital expenditures for oil and gas properties | (4,714 | ) | (7,004 | ) | |||
Investment in equity method investee | — | (400 | ) | ||||
NET CASH USED IN INVESTING ACTIVITIES | (7,325 | ) | (20,194 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Payments on debt | (24,130 | ) | (2,000 | ) | |||
Debt acquisition costs | (3,757 | ) | (1,954 | ) | |||
Proceeds from borrowings | 40,000 | 23,119 | |||||
Redemption of preferred stock | (11,240 | ) | — | ||||
Exercise of equity rights | 125 | 1,283 | |||||
Restricted cash | 640 | (52 | ) | ||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,638 | 20,396 | |||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (2,079 | ) | 3,005 | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 3,971 | 1,559 | |||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 1,892 | $ | 4,564 | |||
SUPPLEMENTARY CASH FLOW DATA: | |||||||
Cash paid for interest | $ | 4,697 | $ | 142 |