Miller Energy gives details of $100 million two-year credit facility

By Susanna Moon

Chicago, June 17 - Miller Energy Resources, Inc. disclosed more information about its $100 million credit facility due June 13, 2013 with an initial borrowing base of $35 million, according to an 8-K filing with the Securities and Exchange Commission.

Interest will be the higher of 9½% and the Prime rate plus 450 basis points.

In addition, Miller is required to pay an additional make-whole payment upon termination or payment in full of the facility.

Beginning Jan. 1, 2012, or earlier under certain circumstances, Miller is required to use 90% of its consolidated monthly net revenues to repay the loans outstanding under the facility.

Proceeds of certain asset sales and debt and other proceeds received outside the ordinary course of business are required to be used to repay loans outstanding under the facility.

The borrowing base is reset twice a year, and more often at the request of the borrower or the required lenders.

In connection with the loan agreement Miller has granted Guggenheim a right of first refusal to provide financing for the acquisition, development, exploration or operation of any oil and gas related properties including wells during the term of the facility and one year after that.

The first draws, totaling $10,874,612, have been used to pay transaction fees, to pay off the line of credit with PlainsCapital Bank, to make the first progress payment under the company's drilling rig contract and for working capital.

The company said it closed on the facility Monday with Guggenheim Corporate Funding, LLC, Citi NA and Bristol Investment Fund, Ltd.

Proceeds are slated to fund development and the construction of a drilling rig to be used to increase oil production both onshore and offshore in Alaska through the drilling of new wells and the reworking of previously producing oil wells.

"The credit facility ensures that Miller has the funding to dramatically increase production through low-risk development, which will build significant long-term value for our shareholders. Obtaining a credit facility without an equity component led by Guggenheim was very important for Miller," Scott M. Boruff, Miller chief executive officer, said in the Monday press release.

Munger, Tolles and Olson, LLP was an adviser.

Miller Energy is a Huntsville, Tenn.-based oil and natural gas exploration, production and drilling company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.