Miller Energy Resources, Inc. Files Voluntary Chapter 11 Bankruptcy Petition in Alaska After Prior Involuntary Bankruptcy Filing Of Its Subsidiary

On October 1, 2015, Miller Energy Resources, Inc. (“Miller”) and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Alaska.  Miller’s voluntary bankruptcy filing follows the involuntary bankruptcy filing of one of Miller’s subsidiary, Cook Inlet Energy, LLC (“Cook”).  The involuntary petition was filed against Cook on August 6, 2015 by (i) Baker Hughes Oilfield Operations, Inc., (ii) M-I, L.L.C. d/b/a MI-SWACO, and (iii) Schlumberger Technologies Corporation.  Miller, Cook and Miller’s other subsidiaries are collectively referred to as the “Debtors”.According to the declaration of Miller’s Chief Executive Officer Carl F. Giesler, Jr. (the “Giesler Declaration”), the Debtors’ primary assets are oil and gas interests in Alaska and Tennessee.  In Alaska, the Debtors operate primarily in the following fields: (i) Redoubt Unit; (ii) West McArthur River Unit (WMRU) (includes Sword field and Sabre prospect); (iii) North Fork Unit; and (iv) Badami (Savant) Unit.  See Giesler Declaration at 4-12.The Debtors have outstanding secured obligations of approximately $190 million pursuant to a credit agreement between Miller, Apollo Investment Corp as administrative agent, and certain affiliates of Highbridge Capital Strategies as lenders (the “Second Lien Lenders”).  Notably, the Debtors fully paid off their first lien revolver in September 2015.  See Giesler Declaration at 18-19.The Debtors are seeking the bankruptcy court’s approval of a $20 million debtor-in-possession financing by the Second Lien Lenders that is conditioned on the Debtors’ agreeing to a pre-negotiated plan term sheet, which generally provides that the Second Lien Lenders shall convert their outstanding claims into new first lien secured notes and 100% of the equity in the new company.  The plan term sheet provides that unsecured creditors shall receive some form of cash recovery and warrants to purchase equity in the new company.  See Giesler Declaration at 24-25.The Debtors’ are seeking to have their cases jointly administered in the bankruptcy case captioned In re Cook Inlet Energy, LLC [Case No. 15-00236].A copy of the involuntary bankruptcy petition against Cook can be accessed here: Download Involuntary Petition.A copy of Cook’s answer to the involuntary bankruptcy proceeding, which includes a list of the Debtors’ 30 largest unsecured creditors, can be accessed here: Download Answer to Involuntary Petition.A copy of the Giesler Declaration can be accessed here: Download Giesler Declaration.For further information, please contact a Thompson & Knight Bankruptcy and Restructuring Attorney.  For more information on the Thompson & Knight’s Bankruptcy and Restructuring Practice, please visit www.tklaw.com/bankruptcy-and-restructuring/.