Each one in plain English, with the numbers worked through for a shareholder.
9 Dec 2013material agreement▼ BadMajor
On December 9, 2013, Miller Energy signed Amendment No. 8 to the Apollo loan, with no fee. Apollo waived a default of the interest coverage ratio covenant for the quarter ended October 31, 2013, delayed that covenant's compliance until the quarter ending October 31, 2014, and raised the minimum daily production requirement. It also permits Cook Inlet Energy to acquire oil and gas assets and a related entity from Armstrong Cook Inlet, GMT Exploration, Dale Resources Alaska, Jonah Gas and Nerd Gas, with a company guaranty of related obligations. This is another covenant default waived on the Apollo loan, and it opens a new Alaska acquisition thread.
25 Nov 2013capital raising announcement▲ GoodMajor
Agreed to buy the North Fork gas field and its pipeline company from Armstrong Cook Inlet and partners -- about 15,465 net acres in Cook Inlet -- paying partly in $5 million of Series D preferred stock, and announced first results from the Sword No. 1 well the same day.
Opened a $75 million at-the-market facility for the Series D preferred, noting plainly that if the credit facility barred Miller from paying its December preferred dividends from any other source, it might pay them out of the proceeds of this offering -- selling preferred stock to pay preferred dividends.
Launched a second listed preferred, the 10.5% Series D, selling 1,000,000 shares at the full $25.00 for about $25 million. Cheaper than the Series C had become, but a third layer of dividends now sat ahead of the common stock.
Paid Apollo a $300,000 fee for a sixth amendment that added $20 million of borrowing capacity, drawn immediately, at a temporarily reduced 9% -- reverting to 18% if not repaid by January 2014. Miller was now borrowing against Alaska state tax credits it had not yet received.
Apollo granted a fifth waiver, pushing the covenant compliance date to October 2013 and giving Miller more time to deliver its reserve report and an appraisal of its own hard assets -- the deadlines a lender extends when it does not want to know the answer yet.
A burst of Alaskan operational news in ten days: the RU-2A well brought online, the Sword No. 1 and Olson Creek No. 1 wells spudded, a sidetrack begun on RU-1, a new commercial gas sales contract -- and a correction to its own press release, which had understated an RU-1 production figure as 3,000 rather than 4,000 barrels of oil equivalent a day.
