Cook Inlet Energy parent firm files for bankruptcy protection

KENAI — After more than a month of negotiations, Miller Energy Resources Inc. filed Oct. 1 for Chapter 11 bankruptcy protection and reorganization.

The parent company of Alaska-based Cook Inlet Energy blamed the substantial decline in oil prices, a drilling plan that resulted in lower-than-expected additional production and the withdrawal of a private lender who had promised the company a more than $165 million loan to refinance its outstanding debt, according to a media release.

In August, two of its creditors — Schlumberger and Baker Hughes — filed an involuntary bankruptcy petition over more than $2.6 million in unpaid bills. Miller Energy Resources Chief Executive Officer Carl Giesler said at the time that the two debtors were looking to collect on a fraction of the more than $180 million the company had in debt.

At the time, Giesler said he was hopeful that the combination of tax credit payments owed to the company by the State of Alaska, the sale of non-core assets like the Badami field on the North Slope and now-failed negotiations with a large lender could help the company avoid restructuring.

Last Thursday, Giesler said the company had reached a preliminary deal with the second lien lenders to which it owes the bulk of its debt and would be able to clear away a lot of the issues the company has faced in recent months once the restructuring is completed.

In March, VAI Inc. won nearly $7 million from Miller Energy over a contract dispute. Then the company was de-listed from the New York Stock Exchange in July after it stock price fell, and stayed below listing standards for market capitalization. After the company announced its bankruptcy on Thursday, its stock price fell to a new 52-week low of 6 cents per share.

In August, the U.S. Securities and Exchange Commission charged the company, two of its executives and an accountant with inflating the values of the company’s Alaska oil and gas properties by more than $400 million. The SEC administrative proceeding announcement that was the “straw that broke the camel’s back,” Giesler said. The involuntary bankruptcy petition followed a day later and the company has been working to avoid bankruptcy since, he said.

Still, the bankruptcy restructuring could help the company get back on track.

“We’re going to be getting a haircut and a lot of the big strands, the dangling strands that have been tripping us up — whether they be lawsuits, regulatory actions from the SEC, etc. — those will get cleaned up and finally resolved through the bankruptcy process,” he said. “When we emerge, we will have a clean balance sheet with an appropriate amount of debt that will allow us to get back to doing what we should be doing which is safely and efficiently developing oil and gas resources for the benefit of our customers and Alaska.”

Giesler said the company’s employees will continue to work, be paid and should not expect any further layoffs. In addition, the company expects to pay its vendors and other service providers for work going forward, according to the media release.

“This is the good news for our employees and for the people we work with,” he said.

Rashah McChesney is the city editor for the Peninsula Clarion.

More in News

Alaska State Troopers logo.
Anchor Point house fire leaves one dead, one in serious condition

The cause of the fire is under investigation.

The Wrangell Institute was one of many residential schools in Alaska dedicated to involuntarily teaching the Indigenous people of the state European ways of living, forcibly breaking them from their own Alaska Native cultures. (Courtesy photo / National Park Service)
Churches respond to revelations about residential schools

That acknowledgement is taking a number of forms, varying by institution.

The entrance to the Mendenhall Glacier Recreation Area in the Tongass National Forest was covered in snow on Friday, Nov. 19, 2021, a day after federal authorities announced the next step in restoring the 2001 Roadless Rule on the forest. (Peter Segall / Juneau Empire)
Feds put freeze on Roadless Rule rollback

On the Roadless Rule again.

Commercial fishing and other boats are moored in the Homer Harbor in this file photo. (Photo by Michael Armstrong/Homer News)
Seawatch: Historic sockeye run predicted for Bristol Bay

ADF&G says 2022 run could break this year’s record

A reader board sign on the Sterling Highway announces COVID-19 testing and vaccines at the South
No current COVID-19 patients at South Peninsula Hospital

Test rates, ER visits and admissions are dropping for Homer

Family practice physician Christina Tuomi, D.O., (right) gets Homer’s first dose of Pfizer’s COVID-19 vaccine from Emergency Department nurse Steve Hughes (left) on Thursday, Dec. 17, 2020 at South Peninsula Hospital in Homer, Alaska. Tuomi has been the hospital’s medical lead throughout the pandemic. (Photo courtesy Derotha Ferraro/South Peninsula Hospital)
Feds issue vaccine mandate to health care workers; Dunleavy joins lawsuit against the rule

Rule by CMS applies to hospitals, rural health clinics, community mental health centers.

Tim Navarre, president of the Kenai Peninsula Foundation, stands in a bedroom at a cold weather shelter set to open next month on Monday, Nov. 22, 2021 in Nikiski, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Shelter prepares to open doors

Efforts to establish a cold weather shelter on the peninsula have been in the works for years.

FILE - The Olympic rings stand atop a sign at the entrance to the Squaw Valley Ski Resort in Olympic Valley, Calif., on July 8, 2020. U.S. Interior Secretary Deb Haaland on Friday, Nov. 19, 2021, declared "squaw" to be a derogatory term and said she is taking steps to remove the term from federal government use and to replace other derogatory place names. The popular California ski resort changed its name to Palisades Tahoe earlier this year. (AP Photo/Haven Daley, File)
Interior secretary seeks to rid U.S. of derogatory place names

ALBUQUERQUE, N.M. — U.S. Interior Secretary Deb Haaland on Friday formally declared… Continue reading

tease
Alaska man pleads not guilty to threatening 2 US senators

If convicted, he could face a maximum sentence of 50 years in prison.

Most Read