miller energy resources august 16, 2012 / enercom conference denver

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  • Slide 1
  • Miller Energy Resources August 16, 2012 / EnerCom Conference Denver
  • Slide 2
  • Forward Looking Statement 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 deficiencies identified by the SEC in certain Forms 8-K filed in 2010 and the 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, 2011. 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.www.sec.gov
  • Slide 3
  • MILL Stock Ticker (NYSE) Equity Market Cap as of 8/7/12 ( shares outstanding) Insider Ownership of Outstanding Shares % of Proved Reserves / Oil Total Resources SEC Case Strip Company Operated % of Net Production Proved Oil Reserves (P1) Shares Outstanding Approximate Lease & Exploratory Acres $175 MM 41.9 MM 34% 98% 95% 723,727 ACRES PV-10 $1.543 BILLION 9.03 MMBOE Company Snapshot *Company Snapshot as of 8/7/12. Stock Closed at $4.14
  • Slide 4
  • Financing Highlights Approx. $24MM of Equity Raised Since December 2009, including $10MM of preferred in April 2012. $100MM Five Year Senior Secured Credit Facility Provided by Apollo Inv. Corp. $55MM Current Borrowing Base. Miller Listed on NYSE in April 2011. Hired KPMG as Auditors in February 2011.
  • Slide 5
  • Management Holds a Significant Stake in the Company Insiders own 34% of company (fully diluted). Proven Management Management / Shareholder Alignment Scott Boruff, CEO: Led company through listing transition from Pink Sheets to NYSE. 25 years in senior level M&A, Corporate Finance, and Development. David Voyticky, President, Acting CFO: 15 years M&A, Corporate Finance, and other positions, spanning Goldman Sachs, JP Morgan, Houlihan Lokey. David Hall, CEO of Alaska Operations, Director: 20 years experience in operations, Formerly GM of Alaska Operations, Pacific Energy, and Production Foreman and Lead Operator, and ultimately Production Manager, Forest Oil Corp. Value Driven Growth Strategy Strong Foundation in Place Built on Low Cost / High Value Acquisitions Efficient Low Cost Operators The Miller Advantage 9.03mm BOE of Proven Reserves P1+P2+P3 PV-10 (SEC) of $1.543 Billion $295mm in shareholders equity Strong Balance Sheet Proven Acquisition Prowess Prudent Development and Acquisitions - Buy Low / Sell High Acquisition Cost of $0.36/BOE on Proven Reserves vs. Historical U.S. Average $19.11/BOE
  • Slide 6
  • 2012 Drilling Plans OFF SHORE ON SHORE April *KF-1 - Disposal Well June July August RU-1 - 400 boe (Oil) Sept. RU-3 - 500 boe (Gas) Otter A - 500 boe (Gas) Oct. RU-2 - 600 boe (Oil) Olsen Creek 500 boe(Gas) Nov. Dec. RU-4 - 500 boe (Oil) ______________________________________________________________ Total BOE: 2,000 Off Shore 1,000 On Shore Cumulative BOE Additions: 3,000 + Current BOE: 1000 = 4,000BOE
  • Slide 7
  • Operational Control Significant Infrastructure Miller Operates 98% of Net Production Control Equals Cost Savings Over $300MM of Assets to Support Alaskan Production Modern Infrastructure to Support Growth in Place and Paid For Modern Alaska Facilities with 50,000 BOD Processing Capacity 129 Sq. Miles Miles of 3D and 1,499 Miles of 2D Seismic Data in Alaska Fully Engineered Drill Ready Alaska Locations 600+ Wells in Tennessee with Full Infrastructure Favorable Exploration Significant Low Hanging Fruit (Low Risk/High Return) Tax Incentives in Alaska for up to 65% of Exploration Costs Alaska is Pro Natural Gas and Oil The Miller Advantage Alaska Premium Gas Pricing Alaska has a Significant Natural Gas Shortage Natural Gas Sells in Alaska between $7 and $10 Mcf Substantial Upside Vast Oil & Natural Gas Opportunities on Present Holdings Substantial Self Development and Joint Venture Opportunities
  • Slide 8
  • Reserves - Proved with Upside PUD 6.5 MMBOE PV-10 $364MM Total Reserves 53.6 MMBOE SEC Case: PV-10 $1.543 Billion Proved Reserves 9.043 MMBOE SEC CASE: PV-10 $446.7MM Large Drilling Inventory PDP 1.6 MMBOE PV-10 $59.22MM PDNP.943 MMBOE PV-10 $22.9MM PROBABLE (P2) 9.0 MMBOE PV-10 $387MM POSSIBLE (P3) 35.48 MMBOE PV-10 $710MM PROVED (P1) 8.4 MMBOE PV-10 $447MM Based on the RED April 2012 SEC Reserves at INO.com
  • Slide 9
  • Miller Basins The Southern Appalachian Basin Cook Inlet, Alaska 95% 5%
  • Slide 10
  • Alaskas Bakken! Majors out / Independents In Buccaneer, Apache, Hilcorp, Armstrong, Furie, Linc, Nordaq. Potential local gas shortage Brownout warnings Plans to import LNG Under-explored basin (USGS study) Estimated 600 MMBO & 19 TCF gas Last major gas discovery: 1979 There are seven producing oil and gas fields on the Kenai Peninsula and offshore Cook Inlet. This area has produced a cumulative total of over 1.3 billion barrels of oil and 9.4 trillion cubic feet of natural gas. Cash incentives (ACES) 45% - 65% tax rebates Special Jack-Up Rig rebates Premium Natural Gas Prices 100% - 400% premium to Lower 48 Negotiated directly with end users
  • Slide 11
  • Tennessee Development Strategy Reworking existing stripper wells, Upgrade/replace lift systems, acid stimulation, etc. Own & Operate drill Rigs, Over 45 years experience. Exploit our Mississippi Lime oil. 50 horizontal drilling Mississippi Lime Targets, Upgrade/replace lift systems, acid stimulation, etc. Largest owner/operator of wells in Tennessee, over 49,000 acres. Operates 100% of our oil production in Tennessee, low operating cost (LOE) $15 million budget for Tennessee.
  • Slide 12
  • Substantial Value In Untapped Mid-Stream Assets - Osprey Platform - Kustatan Production Facility - 40+ miles of pipelines - Grind & Inject Unit (2 disposal wells) - Power - Trans-Foreland Pipeline* Plenty of excess capacity to handle third-party contracts for power generation, fluid & gas processing, cuttings, and

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