ANCHORAGE, AK--(Marketwired - Feb 20, 2014) - Miller Energy Resources, Inc. (the "Company" or "Miller") (NYSE: MILL) today announced that it has completed its rework of the RU-7 oil well and is in the final stages of completing the WMRU-8 oil well.
RU-7 was recently brought back online after a successful rework to add approximately 56 feet of new perforations in the primary productive crude oil interval, the Hemlock. The rework consisted of pulling the electrical submersible pump (ESP) and then completing, perforating, and re-installing the ESP. Results of the rework will be announced after the well's production has stabilized and been tested. During the rework of RU-7, improvements to Rig 35 and the Osprey platform were made with the addition of a grind and inject unit and the upgrade to a more powerful top drive on Rig 35, which Miller expects will result in lower drilling costs.
The Company believes the rig and platform improvements will appreciably enhance overall drilling operations, including its next scheduled well, RU-9, a Redoubt Shoal southern step-out oil well. RU-9 is intended to capture oil reserves from a large four-way structure located approximately 2.5 miles southwest of the Osprey platform. The primary objective for the RU-9 well will be the Hemlock formation, the principal producing formation in the Redoubt Shoal field. The Company expects to begin drilling RU-9 within the next two weeks. The well will take approximately three months to drill and complete.
WMRU-8 has been drilled to a final measured depth of approximately 15,535 feet. The primary objective is the Hemlock, with a secondary target located in the pre-tertiary Jurassic oil zone. The well is intended to provide a take point for the Hemlock reservoir previously logged, but not tested, in the WMRU-7 well. Casing has been installed and cemented over the Hemlock interval and the final casing section is currently being installed over the Jurassic interval. Based on well log analysis, the Company plans to perforate approximately 106 feet of the Hemlock formation, 17 feet of the West Foreland formation, and 150 feet of the Jurassic formation. It is expected the well will be completed and well testing will begin over the next two weeks. The Jurassic formation lays below the prolific Hemlock oil reservoir at the McArthur River and WMRU fields. Another operator in the region has previously produced oil from fractured Jurassic rocks at the adjacent McArthur River field. The Jurassic is presumed to be the source rock for the oil in the G-Zone, Hemlock and West Foreland reservoirs in the Cook Inlet region. The Jurassic formation remains a relatively under-explored target in the Cook Inlet due to its depth.
Following completion of the WMRU-8 well, the Company intends to begin testing the additional zones in the Sword-1 well. The Company has filed an application for a comingling permit from the State of Alaska to allow production from the G zero concurrent with the Hemlock.
"The RU-7 rework was a great opportunity to add new perforations to improve an existing producing oil well and maximize rig efficiency by upgrading our platform and drilling rig prior to commencing RU-9," said David Hall, Miller's Chief Operating Officer. "As we look to our drilling program, we are very pleased with the positive log analysis in the Hemlock and Jurassic intervals in the WMRU-8 well and also to have brought the RU-7 well back online with additional perforated intervals. Following completion of theWMRU-8 well, we look forward to beginning testing the Tyonek oil and gas zones in our Sword well."
About Miller Energy Resources
Miller Energy Resources 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 Appalachian Basin including the Mississippian Lime and 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 to experience additional operating losses; whether Miller can establish production on certain leases in a timely manner before expiration; the ability to recover proved undeveloped reserves and convert probable and possible reserves to proved reserves; the impact of natural disasters on our Cook Inlet Basin operations; the imprecise nature of our reserve estimates; risks related to drilling dry holes or wells without commercial quantities of hydrocarbons; fluctuating oil and gas prices and the impact on Miller's results from operations; the need to discover or acquire new reserves in the future to avoid declines in production; and differences between the present value of cash flows from proved reserves and the market value of those reserves. 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, 2013. 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.
(February 20, 2014 - 8:00 AM EST)
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