Miller Energy Resources and its wholly owned Alaskan operating subsidiary, Cook Inlet Energy ("CIE") announced today that it has accepted a proposal from the Alaska Department of Natural Resources (DNR) for approval of the Otter Unit.
Following the decision by the State Division of Oil and Gas rejecting CIE's initial Otter Unit application, CIE appealed the denial to the DNR. On August 30, 2013, the Commissioner of the DNR issued a decision entitled "Commissioner's Conditional Approval of a Modified Otter Unit Agreement" (the "Decision"). The Decision outlines specific requirements that CIE must meet to receive the Commissioner's approval of the Otter Unit. Those requirements consist of 1) modifications to the Unit Agreement proposed in CIE's original application, 2) modifications to the Plan of Exploration proposed in CIE's original application, and 3) the posting of a $1.2 million performance bond (refundable upon completion of the work outlined in the Plan of Exploration). After reviewing the requested modifications, CIE accepted the Commissioner's terms and submitted the necessary documentation to have the Otter Unit approved.
"We are very pleased to get this unit approved," stated David Hall, Miller's Chief Operating Officer and CEO of CIE. "We will now focus our attention back to proving up the Otter prospect. During the appeal period we received a pipeline right of way approval from the DNR which will enable us to develop the field immediately upon encountering commercial quantities of gas."