Miller Energy Resources' CEO Discusses F4Q 2012 Results - Earnings Call Transcript

Miller Energy Resources, Inc. (MILL)

F4Q 2012 Earnings Conference Call

July 25, 2012 16:30 ET


Scott Boruff – Chief Executive Officer

David Hall – Chief Executive Officer, Alaska Subsidiary

David Voyticky – Chief Financial Officer


Neal Dingmann – SunTrust

Michael Cahill – Compass Investments

Jonathan Fite – KMS Investments

Jeffery Connolly - Sidoti & Company



Good afternoon and welcome to the Miller Energy Resources Fourth Quarter Conference Call. This call is being recorded. At this time, all participants have been placed in a listen-only mode. A question-and-answer session will follow the presentation by the company’s CEO, Scott Boruff.

Before we begin, the company has requested that I make the following announcement. The comments made during this conference call may contain forward-looking statements within the meaning of Section 27A of the Securities and Exchange Act and the Private Securities Litigation Reform Act of 1995. They represent Miller Energy’s expectations and beliefs concerning future events.

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 invoke a number of risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated by Miller Energy Resources 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 deficiencies identified by the SEC in certain forms 8-K filed in 2010 and the Form 10-K for 2011; litigation risk; it’s ability to perform under the terms of its oil and gas leases, and exploration licenses with the Alaska DNR, including meeting the funding our work commitments of those agreements; it’s ability to successfully acquire, integrate and exploit new productive assets in the future; it’s ability to recover proved undeveloped reserves and covert profitable and possible reserves to proved reserves, risks associated with the hedging of commodity prices; it’s 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, growing risk, fluctuating oil and gas prices and the impact on our 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 reserves that maybe uninsurable; constraints on production and cost 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 the future legislation could have on the access to tax incentives currently enjoyed by Miller that no dividends maybe paid on its common stock for sometime; 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 risk to non-affiliate shareholders arising from substantial ownership positions of affiliates.

Additional information on these and other factors which could affect Miller Energy’s operations or financial results are included in Miller Energy’s reports on file with the United States Securities and Exchange Commission, including its most recent filing of its Annual Report on Form 10-K.

Miller Energy’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. All forward-looking statements attributable to Miller Energy Resources or to persons acting on its behalf are expressively qualified in their entirety by these factors.

Investors should not place undue reliance on these forward-looking statements, which speak only as of this date of this conference. Miller Energy Resources assume no obligation to update forward-looking statements, should circumstances or management’s estimates or opinions change unless otherwise required under securities law. Miller Energy Resources is not responsible for changes made to this call by the conference call company or internet services.

At this time, it’s my pleasure to turn the call over to Miller Energy’s CEO, Scott Boruff. Please go ahead, sir.

Scott Boruff – Chief Executive Officer

Thank you, (Karianne). I want to thank you for joining us this afternoon to review the results of our fourth quarter and fiscal year end April 30, 2012. Today I’ll provide a brief overview of our accomplishments and results of our operations for the quarter following my reviews David Hall, CEO of our Alaska subsidiary will present an update an update on our Alaska operations and David Voyticky, our President and Acting CFO will provide additional detail on our financial results. Upon the completion of management presentations, we’ll be accepting questions and comments.

As 2012 was a transformational year for Miller Energy. During the year we laid groundwork from Miller to begin developing our significant reserves and assets that we have in Alaska as well as consolidated our interest in Tennessee. I want to take a few minutes to highlight these accomplishments since we believe they will be drivers of our future growth and probability. With the bulk of our production coming from Alaska I’ll briefly touch on Tennessee before covering Alaska in more detail. Throughout this past year, Miller acquired outside interests in some of its producing wells and surrounding acreage in Tennessee. As a result Miller’s working interest and net revenue interest in these producing wells has increased. In fiscal 2013 we’ve planned an aggressive rework program and horizontal drilling program in Mississippian lime which we believe will be more viable to us and we where ever had that greater interest in these wells.

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