Miller Energy Resources, Inc. (MILL) F4Q 2012 Earnings Conference Call July 25, 2012 16:30 ET Executives Scott Boruff – Chief Executive Officer David Hall – Chief Executive Officer, Alaska Subsidiary David Voyticky – Chief Financial Officer Analysts Neal Dingmann – SunTrust Michael Cahill – Compass Investments Jonathan Fite – KMS Investments Jeffery Connolly - Sidoti & Company PresentationOperator
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.
In trading on Tuesday, shares of Miller Energy Resources, Inc.'s 10.5% Series D Fixed Rate/Floating Rate Cumulative Redeemable Preferred Stock were yielding above the 17% mark based on its quarterly dividend (annualized to $2.625), with shares changing hands as low as $15.25 on the day. This compares to an average yield of 15.24% in the "Oil & Gas Exploration & Production" preferred stock category, according to Preferred Stock Channel.
The most recent short interest data was recently released by the NASDAQ for the 11/28/2014 settlement date, and Miller Energy Resources, Inc. is one of the most shorted stocks of the Russell 3000, based on 16.60 "days to cover" versus the median component at 6.85.