Stock Alert for AER Energy Resources Inc. (AERN)
  • Stock Alert for Portage Resources Inc. (POTG)
  • Stock Alert for Lucas Energy Inc. (LEI)
  • " />

    Stock Alert for Miller Energy Resources Inc. (MILL)

    Miller Energy Resources Inc. (MILL) is an oil and natural gas exploration, production and drilling company operating in multiple exploration and production basins in North America. Its focus is in Cook Inlet, Alaska and in the heart of Tennessee’s prolific and hydrocarbon-rich Appalachian Basin including the Chattanooga Shale. During the year ended April 30, 2011, MILL began completion work on three Alaska wells that were previously shut in, and it has completed work on two of these wells. The Company capitalized approximately $8.6 million of costs associated with those efforts. In addition, it plans to recomplete eight previously shut in wells in the following three to six months.  In addition to raising capital, MILL continues to focus its short-term efforts on two distinct areas: increasing its overall oil and gas production through maintenance and repairs of nonperforming or underperforming oil and gas wells, and organically growing production through drilling for its own benefit on existing leases and under license rights.

    Share Statistics (29-Aug-11) FY2009 FY2010 % Chg Q12010 Q12011 % Chg
    Symbol MILL Revenue, $Mn 1.57 5.87 273.9% 1.16 7.82 574.1%
    Current price $3.37 Gross marg. 8.9% 33.0% 270.8% -82.8% 52.8% -163.
    52wk Range: $2.02-$8.04 Oper. margin -189.4% -5.5%
    Avg Vol (3m): 924,097 Net margin 532.5% 4249.6% 698.0% 23444.0% 11.6% -100.0%
    Market Cap. 136.68M
    Shares Outstanding 40.56M EPS, $ 0.05 -1.67 3440.0% -1.23 0.02 -101.6%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of MILL gained 51.13% in the last five days, though the stock dropped 24.26% in the last month.  Shares are down 24.43% year-to-date.

    Shares the Tennessee-based company traded as much as 49.33% yesterday,  moving ahead of an investor conference call.

    Early this month, MILL CEO Scott Boruff issued an open letter to shareholders to address the latest report on the Company’s Form 8-K, as well as an article posted on TheStreetSweeper.com, which raised concerns about MILL’s valuation of its Alaskan oil and gas assets.

    The Company disclosed that this year’s 10-K was filed with the SEC on July 29, 2011 prior to KPMG LLP completing its review of the annual report and issuing their independent accountants’ report on the financial statements, as well as the consent to the use of their report filed as Exhibit 23.3. A form of KPMG’s opinion dated July 29, 2011 was inadvertently included in the filing, when in fact, they had not yet released the report. Accordingly, the Form 10-K is not a complete SEC filing.

    MILL, on August 9, filed an amended 2011 10-K, which included corrections to computational errors in its consolidated statement of cash flows.

    With respect to it production and development, MILL said it is in a very strong position with approximately 1,500 BOE per day with a current net debt of approximately $17 million. The Company works very closely with its financial partners and does not expect any material issues due to the delay in its reporting of audited financials for fiscal year 2011.

    In order to provide an accurate valuation of its Alaskan subsidiary, MILL has consulted extensively with independent third parties in order to fairly and reliably value those assets. An independent appraisal was performed upon acquisition, and MILL hired third party petroleum engineers to issue its reserve reports. The independent engineer that signed off on the Company’s recently completed reserve report for fiscal year 2011 has more than 30 years of experience in valuing reserves.

    In the letter release on August 1, CEO Scott Boruff stated: “I would next like to address the implication in The Street Sweeper blog that Miller is riddled with lawsuits. Any company our size will be subject to lawsuits in the ordinary course of its business and we describe the potentially material lawsuits to which we are party in our 10-K. Miller is currently being sued by two parties and believes that both lawsuits are without merit. As to the specific allegation regarding the CNX matter that Miller failed to disclose the reversal of the trial court’s summary judgment in our favor, we did not believe it rose to an immediate materiality level of an 8-K. Furthermore, as noted in our 10-K, the CNX matter was recently dismissed on the motion of the plaintiff without prejudice.”

    Source: http://ir.millerenergyresources.com/releasedetail.cfm?ReleaseID=595543

    Financial Summary

    MILL recorded a loss of about $3.88 million, for fiscal 2011, which compares to net income of $250.94 million for fiscal 2010. Excluding interest income and expense, income tax expense and depletion, depreciation and amortization (DD&A) from the numbers, fiscal 2011 shows adjusted earnings before interest, income taxes, depreciation, depletion and amortization (EBITDA) to be a positive $3.14 million as compared to an EBITDA of $439.17 million for fiscal 2010.

    Revenues increased $16.97 million between the years while costs and expenses increased $20.74 million. Other income dropped significantly from $446.93 million in fiscal 2010 to $4.92 million in fiscal 2011 as fiscal 2010 had large one-time acquisition gains driving this total as compared to fiscal 2011.

    At April 30, 2011, the Company had a working capital deficit of $7.69 million as compared to a working capital surplus of $239,384 at April 30, 2010. This decrease in capital surplus is primarily due to an increase in trade payables of $3.92 million, an increase in accrued expenses of $3.39 million and an increase in notes payable of $2.00 million, partially offset by an increase in state tax credits receivable of $2.51 million.

    MILL’s cash decreased from $2.99 million to $1.56 million from April 30, 2010, to April 30, 2011 . This decrease was primarily due from an increase in cash used in investment activities of $11.31 million, partially offset by increases in cash provided by operations of $7.73 million and cash provided by financing activities of $2.14 million.

    Source: http://biz.yahoo.com/e/110829/mill10-k_a.html

    Financial Strength (29-Aug-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 0.98 0.81 0.48 0.75
    Current Ratio (MRQ) 1.02 0.91 0.72 1.10
    LT Debt to Equity (MRQ) 0.82 24.55 14.53 112.42
    Total Debt to Equity (MRQ) 1.69 25.63 19.26 152.52
    Interest Coverage (TTM) 3,820.39 0.70 10.88 23.03

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among two polled investment analysts. Against the Miller Energy Resources Inc company.

    Analyst Detail

    Buy

    Outperform

    Hold

    Underperform

    Sell

    No Opinion

    Latest 2 0 0 0 0 0
    4 weeks ago 2 0 0 0 0 0
    2 months ago 2 0 1 0 0 0
    3 months ago 2 0 1 0 0 0
    Last year 0 2 0 0 0 0

     

    The two analysts offering 12-month price targets for MILL have a median target of 9.25, with a high estimate of 10.00 and a low estimate of 8.50. The median estimate represents a 307.49% increase from the last price of 2.27.

    Source: markets.ft.com

    Consensus Estimates Analysis

    # of Estimates

    Mean

    High

    Low

    1 Year Ago

    SALES (in millions)
    Quarter Ending Oct-11 1 14.48 14.48 14.48 15.00
    Quarter Ending Jan-12 1 17.55 17.55 17.55 18.00
    Year Ending Apr-11 1 28.72 28.72 28.72
    Year Ending Apr-12 1 61.89 61.89 61.89 82.13
    EARNINGS (per share)
    Quarter Ending Oct-11 1 -0.04 -0.04 -0.04 0.06
    Quarter Ending Jan-12 1 -0.03 -0.03 -0.03 0.07
    Year Ending Apr-11 1 -0.08 -0.08 -0.08
    Year Ending Apr-12 1 -0.11 -0.11 -0.11 0.97

    Technical Analysis

    Source: http://stockcharts.com

    MILL’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility.

    MILL’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Aug29-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Cabot Oil & Gas Corp. COG 72.44 7.57B n/a n/a 7.35 5.11
    EQT Corp. EQT 56.21 8.40B n/a n/a 6.09 4.64
    Tengasco Inc. TGC 0.72 43.69M n/a n/a 3.45 3.25
    CONSOL Energy Inc. CNX 44.28 10.04B n/a n/a 1.73 1.58
    Oil & Gas Drilling & Exploration Median       15.62 n/a 4.30 n/a
    Miller Petroleum Inc. MILL 3.24 131.41M n/a n/a 2.12 n/a

    Source: Thomson Financial

    DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

    The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

    Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

    Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

    Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

    We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

    To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

    We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

    Leave a Reply

    Your email address will not be published. Required fields are marked *