Miller signs new Alaska oil and gas lease

Knoxville-based oil and natural gas company Miller Energy Resources has added more than 45,000 acres to its Alaska exploration rights and is looking to add substantially more acres by the end of the year.

Scott+Boruff.jpgMiller said it its wholly owned subsidiary Cook Inlet Energy LLC recently signed a five-year oil and gas lease on 45,764 acres located south of its existing licenses in the Susitna Basin north of Anchorage.

With the new lease, Miller now holds has oil and gas exploration rights on 700,000 acres of state-owned of Alaska land.

“We hope to have 900,000 before the end of the year,” CEO Scott Boruff said.

The state of Alaska’s next scheduled lease sale for land in the Cook Inlet area is May 16.

Given the premium paid for natural gas in Alaska, the new acreage “is a nice pick up for us”  Boruff said.

Although the company has reported losses in recent quarters, Miller has issued guidance projecting it will see record high production this year.

The new leases has significant potential, Boruff said. The land is “adjacent to the well-proven, prolific oil and gas bearing Cook Inlet Basin that has produced over one billion barrels of oil and seven trillion cubic feet of natural gas,” Scott Boruff said in a news release.

At the end of the five-year lease term, the company will have the option of converting “any or all of the remaining license acreage to oil & gas leases with a five-year term and a royalty rate of 12.5% and a $3.00/acre annual rental rate,” the company said.

Miller is an oil and gas exploration and production company with operations in Alaska and East Tennessee.

Photo: 2010 submitted photo shows  Miller CEO Scott Boruff.