Miller Energy Resources Wins Bid to Acquire Exploration License on 168,000 Acres in Cook Inlet
KNOXVILLE, TN--(Marketwired - Aug 11, 2014) - Miller Energy Resources, Inc. ("Miller") (NYSE: MILL) announced today that it was named the successful bidder in a State of Alaska Exploration License ("License") sale on acreage located on the Iniskin Peninsula, held on August 6, 2014. Miller believes this region has good potential for oil and gas and expects to receive the license from the State of Alaska by the end of August.
The Iniskin peninsula is located on the west side of the Cook Inlet, about 125 miles southwest of Anchorage and about 50 miles northwest across Cook Inlet from Homer. Oil was first discovered there in 1853.
"We have studied of the Iniskin region and think it has significant potential for commercial oil and gas production due to the hydrocarbon rich environment. The Jurassic rocks noted appear to be one of the thickest in the U.S., with part of the Jurassic exposed," explained David Hall, Chief Operating Officer of Miller Energy Resources. "We will conduct further geological studies after we receive the license before we determine the appropriate exploration plan which may entail shooting seismic."
The License is currently being adjudicated by the State of Alaska and is expected to be awarded by the end of August. Upon award, Miller will pay $134,865 as the remainder of the bonus bid offered at the sale and will put up a work commitment bond in the amount of $375,250, which represents a quarter of the total work commitment. Miller is committed to spending $1,501,000 over the next four years of the License term to explore 168,581 acres of State lands in southwest Cook Inlet on the Iniskin Peninsula and surrounding state waters.
Once Miller has met the required work commitment, any portion of the License may be converted to leases with an additional five year term, with an annual rent of $3 per acre. The leases would be subject to a royalty rate of 12.5%.
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 the 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.
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