ANCHORAGE, AK -- (Marketwired) -- 04/09/13 -- Miller Energy Resources, Inc. ("Miller" or "the Company") (NYSE: MILL) announced that its Osprey Platform is currently producing an average of 800 BOEPD over the last three days. This is an increase of 600 BOEPD, or 300%, from the end of 2012. The primary drivers of the increase are the restoration work performed on the RU-7 well, optimization of RU-1 and production from RU-3 gas well. The average oil production from RU-1 and RU-7 over the last three days was approximately 400 BOPD and 200 BOPD, respectively. The RU-7 work-over consisted of pulling the failed electric submersible pump (ESP) and replacing it with a new larger ESP. The larger ESP will allow for further drawdown on the Hemlock oil formation, which is expected to increase production. RU-7 is the first well for which the Company successfully deployed an optimized completion in the Redoubt Field that allowed for unrestrictive flow-path into the wellbore. The successful completion more than doubled the flow rates for RU-7 and reduced the annual decline curve from 27% to 10%.
"We're very pleased with the success of the RU-7 work-over and all four Redoubt wells completed to date. For the first time since acquiring our Cook Inlet assets, we are producing more from the platform than we are from our on-shore assets, providing Miller with results from investments there. At current flow rates, we expect to generate approximately 45,000 BOE in April from our Cook Inlet assets alone. In addition, we have begun the RU-2 sidetrack and look forward to further demonstrating that recoverable reserves could be significantly increased as we deploy the same techniques throughout the entire Redoubt Field," explained Scott M. Boruff, CEO of Miller Energy Resources.
In addition to oil production, the average gas production from RU-3 was approximately 1.5 MMCFD. RU-4 tested at 1.7 MMCFD but is currently shut in as RU-3, combined with Miller's on-shore gas production is approximately 0.5 MMCFD and supplies enough fuel gas for Miller's current operational needs in Alaska. Cook Inlet Energy (CIE), the Company's owned and operated subsidiary in Alaska, is currently evaluating the sale of gas from RU-3 and RU-4 to third parties as demand for natural gas continues to outstrip supply in the Cook Inlet.
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.
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 (www.sec.gov). 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.
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