(By Balaseshan) Miller Energy Resources Inc. (NYSE:MILL) said it has secured a five year, $100 million credit facility with Apollo Investment Corp. (NASDAQ:AINV) to keep its development plans moving forward.
The credit facility, which provides for an initial borrowing base of $55 million, is secured by substantially all of the company's and its subsidiaries' assets.
Proceeds from the loan would be utilized to pay off existing indebtedness, its Series A Preferred Stock, and fund development of oil production both onshore and offshore in Alaska through the drilling of new wells and the reworking of previously producing oil wells.
With the funding secured, Miller first intends to bring the RU-1 well on the Osprey platform in the Cook Inlet in Alaska back online by replacing its electric submersible pump. Last year, Miller brought this well online at about 350 Bbls/d gross prior to experiencing a pump failure.
After restoring production from RU-1, Miller intends to redevelop and drill additional wells in the Cook Inlet, including four wells that were previously producing about 2,000 Bbls/d gross from the Osprey platform.
With funding secured, the company could continue to execute its ambitious business plan to aggressively ramp up our production over the next year through low risk development, which it expects would build significant long term value for its shareholders.
MILL is trading up 10.04% at $5.04 on Friday, while AINV trades up 1.85% at $7.69.