Miller Energy Resources Receives $1.5 Million Tariff Settlement Payment

HUNTSVILLE, Tenn.-- Miller Petroleum, Inc. dba Miller Energy Resources a high growth oil and natural gas exploration, production and drilling company received approximately $1.5 million from the Cook Inlet Pipe Line Company ("CIPL") as its 2010 true-up payment. Last November, the Regulatory Commission of Alaska ("RCA") approved a pipeline tariff settlement between Miller's Alaskan subsidiary, Cook Inlet Energy, LLC ("CIE"), and CIPL that included this true-up provision. CIPL, a subsidiary of Chevron Pipeline Co., operates the 42-mile pipeline on the west side of Cook Inlet that CIE uses to export its oil production.

The settlement reduced the per barrel tariff required to be paid to CIPL by CIE on each shipment of CIE's oil for 2010, and established a methodology for calculating the per barrel rate for years following 2010. According to the 2010 true-up, the total overpayment by CIE for 2010 was approximately $1.75 million. The terms of the settlement provide that any overpayments by CIE up to $250,000 will be credited against future shipments, so in addition to the $1.5 million received in cash by Miller this week, another $250,000 remains in CIE's account at CIPL and will be credited against the next shipments made by CIE.

"This tariff payment represents the significant cost savings we have realized as a result of last November's settlement. Those savings will be even more significant as we continue to ramp up our production in Alaska," said Scott M. Boruff, Miller CEO. "This payment, as well as our recent $2 million tax credit payment, are the result of the great work being done by the Miller team in Alaska. With our reduced transportation costs and the continued opportunity for additional development tax credit payments, the outlook for Miller in Alaska in the coming year and beyond continues to be very bright."

Miller Energy Resources is a high growth oil and natural gas exploration, production and drilling company operating in multiple exploration and production basins in North America. Miller's focus is in Cook Inlet, Alaska and in the heart of Tennessee's prolific and hydrocarbon-rich Appalachian Basin including the Chattanooga Shale. Miller is headquartered in Huntsville, Tennessee with offices in Anchorage, Alaska and Knoxville, Tennessee.

Published February 19, 2011