Entitled "Busy times for Miller"
talks about recent events covered in the most recent press releases and the Imperial Capital conference - nothing really new here. It was longer, but not much not already discussed on the board.
Small company of 84 employees. Recently filed financial statement showing it roughly doubled production rate and revenue in a year's time. But the red ink is rising.
Lots of ambition by small company as it looks to divest Tn assets and concentrate on Alaska.
It talks about the recent management changes.
mixed financials -- 3313 boe for quarter ending July 31. revenue up sharply to $25.4 million but so was operating loss to 9.6 million
debt figures prominently in expansion plans. talks of new loan with Key bank and offer for Buccaneer.
Test on Ru9 confirm oil
talks about already announce drilling plans - at Sabre, and potentially at Badami after acquisition.
main shareholder lawsuits settled for an amount within insurance
and it settled with Voorhees(the equipment issue)
Petroleum News first story continued
IN an earlier iteration of the auction, AIX Energy, Buccaneer's largest secured creditor ahd agreed to be the stalking-horse bidder, committing to bid some $58 Million for "substantially all" of Buccaneer's assets. A stalking horse bidder guarantees a minimum bid, which is meant to protect the auctioning company form being underbid. Must be approved by Buccaneer by 10/14.
The bankruptcy proceeding have been complicated by delinquent taxes. Buccaneer recently asked the court for permission to pay back taxes to the state of Alaska for gas production from the Kenai Loop that were due at the end of June 2014. Unless Buccaneer pays the back taxes, it cannot collect some $20 million in tax credits pending with the state of Alaska for previous exploration work, according to Buccaneer. Those tax credits feature prominently in plans to repay creditors.
2 front page articles. First one about "miller signs non-binding letter of intent for outstanding Cook Inlet properties". Of course for the 40-50 million mentioned in the 9/15 press release. Any final agreement requires board approval. The Australian independent Buccaneer is currently in the middle of bankruptcy proceedings and has been planning on an auction to sell most of its Alaska properties.
The assets under consideration are varied. They include onshore properties on both sides of Cook Inlet and at both ends of the Kenai Peninsula as well as an offshore prospect.
The most valuable is the onshore Kenai Loop gas field, which is the only producing property of the bunch. But the property is at the center of a correlative rights dispute between Buccaneer and the Cook Inlet Region Inc. The case is before the AOGCC and has been delayed by the bankruptcy.
the remaining properties are non producing.
While Buccaneer relinquished many leases at its West Eagle Unit after drilling a dry hole, it still owns a handful of leases at the southern Kenai Peninsula prospect. Those leases are in the area east of the producing North Fork unit Miller recently acquired. And Buccaneer owns leases at the onshore West Nicolai prospec, on the west side of Cook Inlet where Miller began its operations in Alaska and continues to invest heavily. Buccaneer also holds the rights to a deep oil prospect at the offshore N Cook Inlet unit operated by ConocoPhillips. Exploring the prospect would require a jack up rig.
According to Miller, Buccaneer has approx. 1.9 million bbls/oil equivalent of proved reserves and produces 1700 boe
A sale would represent a shift in strategy for Buccaneer. Until now they have been proceeding toward an auction of its assets. The US Bankruptcy Court for the Southern District of Tx recently accepted a settlement between Buccaneer and its largest unsecured creditors that cleared the path to an auction
Buccaneer must approve its plan by Oct 14th.
The shorts will get only more and more desperate as the stock turns green in spite of the article put out by their rag. They will probably force their shills to post an endless number of rants even if there is no purpose or no value to their message.
The other side of the coin to consider is that following each of the last several street sweeper articles, they were followed in a couple of days by very good news.. The real purpose may have been to forewarn its followers that good news is indeed coming soon, and that they need to bail out. The shills' purpose is to allow them to get out as low as possible -- hence the endless (and mindless) rants.
claims that Miller could be worth less than .50 cents per share. Oh well, volume seems to indicate shorts starting to cover in big numbers on the people panicking -- probably just in case Ru9 rumors are true.
New CEO did a credible job. Brawley butted in to answer a couple of questions in the Q&A period, but he could easily have let the new guy finish it up. I can't remember so many questions at one of these conferences. When Voyticky gave the presentations, he almost always used up the entire time with his talk, with no time left for questions. This guy finished a little early and then asked for questions, and there were so many interested questioners that the moderator from Imperial Capital almost had to stop them by saying "that's all the time we have". Presentation went well.
update on Buccaneer -- wanted to be transparent
want to buy something cheap. simple value proposition
hope we able to get it
questions? feel in good spot asset wise. good operational team with Hall
Geisler has organized presentation, makes points by in an easy to follow talk. he has been in energy his whole career
have sufficient capital to do it on own - why a partner? big well, still do pretty well, allow more capital, preserve liquidity
presentation Q's not finished, but I have to go. will listen to balance later
when grow with Sabre and Ru12 -- will make company reserves grow
Osprey 6 fault blocks. already drilled in two -- Ru9 results soon, will be first drilled in the third fault block
Rig 35 will rotate, and drill Ru12 -- should be easier couple of reasons, shorter -- 16K feet -- same direction as other wells (ru9 was different)
primary structure targeting -- confirmed oil and perforated 235 feet now --- flow rates varied, encouraged by results on Ru9
W Mac 5-7 miles N or Redoubt, more mature. 12 million barrel storage/processing facility
Sabre is one fault block N of the Sword well -- which is 600 bbls/day
do not need JV partner for Sabre. It will be 21K feet long
field itself could be 21 million bbls
North Fork -- 7.4 million day (1.2 boe)
sell for $7/ to enstar
Savant -- economically effective -- hope to close by December. PDP -- 6 million. no capital pre close. need rig to develop that are. new production facility with pipelines, likely close in December
why own rigs? own 4 and rent one (the Patterson rig is rented)
owning is one year payback
drilling inventory on P 22 -- evaluating now, will be making decision on capex
should have IP on RU9 soon
Geisler is GOOD speaker (sounds like a lawyer).
They are selling Tn assets
getting rid of the plane
intending to be more transparent in letting know about production - not intending to overpromise and under produce. says will let know reasons why if something does not go as planned so no surprises (I like this guy)
then talks about the presentation slides WITHOUT reading them.
Miller family owns 20% of the company.
Geisler bought shares on the first day he could, and also two new directors also are buying shares.
4 fields and well bore diversity, only redoubt offshore
significant infrastructure at all fields that are not reflected in the share price
Alaska good state for business -- 25-60% drilling costs returned by State
lower cost of debt in place
5 quarters in a row of production growth
60% of reserves proved/developed
Ryder/Scott conservative in valuations
large reserve base. 3P reserves -- not include Ru12 or Sabre -- in continued category. Growing production by expanding reserve base.
I don' t think that Miller will get the jack up rig, or any rights to that with their purchase. It seems that Buccaneer owned only a 1/2 interest in that rig, and some Singapore company owned the other 1/2. From what I read, the Singapore company now owns 100% by having acquired the remaining interest from the bankruptcy trustee.
The good news is that as far as I can tell, the rig is sitting idle right now, and a deal (the potential JV deal management referred to in the conference call) could probably be made to acquire its services.
I think that Miller IS the highest (almost only reasonable bidder) for these assets. That was approximately, or at least in the range for the price that the bankruptcy court was looking for to satisfy the creditors according to one of the Petroleum News articles I read. I'm going by memory, and I don't remember the particulars..... but the numbers sound about right, and the bankruptcy court will rubber stamp the sale by the trustee. Furthermore, the royalty issue is also probably already resolved-- another benefit of dealing with a no nonsense Federal judge. Hey, we now have a Harvard educated lawyer as CEO to help us on this kind of stuff.
MILL is a small company. When Ru9 announces production -- if it is 750 bbls/day or more, price could be 6.25 a week or two later. Lots of good news coming for this company in the next 90 days.
I think we are getting our volume today. Looks like a lot of pent up buying. almost 600K shares in first 40 minutes - that is already 2 days volume.
Miller getting 31.2 million from State of Alaska. Therefore, they only need to come up with about 9 million to complete transaction. For that money, they will get 1.7 boe/day - and if they get average $80 Boe profit --- that gives them about $136K per day to pay for the extra 9 million.
They also get 1.7 million boe from the Buccaneer transaction. Over time, $80 x 1.7 = about $ 136 million in product (provided of course they can get it out of the ground).
New CEO -- Harvard educated attorney -- should be a good problem solver and his ethics should be above reproach - one of the big complaints about the prior management.
A good day for the stock!
Unfortunately for Miller management, they are probably to blame for some of the downward pressure here. Almost like the boy that cried wolf (Ru9 will be done ____, oops, I meant ______ etc.). some shareholders are doubtless fed up and just wanted out at any price.
If Ru9 does in fact come in with 750+ bbls/day starting the end of Sept things will finally change, and they will regret their decision because the stock should return to the upper 5-low 6 range. There is plenty of potentially good news on the horizon -- potential Sabre JV within 30 days/WF3 plugging hole and starting production -- the new rigs all coming online by the end of the year -- all catalysts to send the stock much higher.
While I want to believe Hall when he claims that Ru12 should be completed by January - - (he says it will only be 16K feet, not 19k feet like Ru9 -- and that they know better how to drill that one) -- I wish that rather than give us hope less of a short term target (January), that he would have said something more realistic like March, and then if not completed until April, people not too upset.
seems that Ru9 is flowing, and that IP rate by the end of the month. they expect at least 750 bbls/day from what they have seen so far...... and also proven developed reserves could increase as well depending on the flow rate.
Almost every analyst seemed excited, and a couple even came out and stated they felt Miller significantly undervalued here...with no credit given for infrastructure.
Ru-12 should expect similar flow rate to Ru9, and they expect to spud that well in early October.
the Patterson rig is drilling at Olsen, and 1/2 way to target. Only problem with hitting gas is that they will need to connect to a pipeline, and permits/construction would take 9-12 months. they have heavy expectations here, and expect to start drilling a second well almost immediately after completion of the first well.
They expect to make a determination about a possible JV in the next thirty days on Sabre. They feel that Sabre will add 15 million bbls to proven reserves. not sure of whether to use a jack up rig or drill from land -- I guess it will depend on the JV partner. IN any event, they said to expect decision in the next 30 days.
don't expect any stock buy back -- unless price gets too much lower. seems that the analysts were just stumped on why stock price not higher. there were more analysts that ever before asking questions this time, and most sounded excited and positive.
considering your ID did not even exist until June, and all of your posts have essentially been negative on the companies your are commenting upon, who cares what your opinion is?