Miller Energy Resources reported that its wholly-owned subsidiary, Cook Inlet Energy, LLC, has executed a new contract for the sale of its Alaska oil, which resulted in a substantial increase in the purchase price.

The previous contract priced the oil based on the NYMEX Settlement prices for West Texas Intermediate (WTI), less certain transportation, quality, and other deductions. The new contract provides for pricing based on West Coast Alaskan North Slope (ANS) crude oil, so long as the ANS price exceeds the WTI price by at least $2.285. Similar deductions are in place for transportation, quality, and other costs. Currently, ANS is trading approximately $15 above WTI.

"We are pleased to be receiving ANS pricing for our Alaskan oil. ANS tracks Brent crude oil prices very closely," said Scott M. Boruff, Miller's CEO. "We expect this will result in Miller receiving approximately $14 more per barrel at today's prices. If the pricing differential between ANS and WTI continues, Miller would expect this contract to add approximately $1.1 million per quarter to Adjusted EBITDA for every 1,000 barrels of oil production per day in our Alaskan operations. Accordingly, we expect this to have a very positive effect on our PV-10 values which will be released after our fiscal year ends."

Tags: Miller Energy Resources