Miller Energy Announces Preliminary Agreement With Second Lien Lenders and Files for Reorganization Under Chapter 11 of the U.S. Bankruptcy Code - Seite 2

The Company in March 2015 began its previously-disclosed capital repositioning process in order to stabilize its financial position, improve its balance sheet and maximize the value of its assets for all stakeholders. As part of that process, Miller Energy met with more than 75 prospective lenders and potential non-core asset purchasers. The Company had secured from a private financing source a signed term sheet for a more than $165 million loan that would largely refinance the Company's outstanding debt. Additionally, the Company had secured signed letters of intent on several non-core asset sales. The loan and the non-core asset sales, coupled with the cash State of Alaska tax credits owed to the Company, may have provided Miller Energy sufficient funding to restructure its financial position outside of bankruptcy. The private financing source, however, recently terminated negotiations with the Company, citing the initiation of administrative proceedings against the Company by the Securities and Exchange Commission ("SEC") Division of Enforcement as well as the involuntary bankruptcy petition filed against a subsidiary of the Company by affiliates of Baker Hughes and Schlumberger.

A confluence of factors led to the Miller Energy's need to pursue this financial restructuring. The Company believes that, among those factors, the most notable are (1) the recent withdrawal by that private financing source from talks with the Company, (2) the substantial decline in Brent oil prices from greater than $100 per barrel in September 2014 to less than $50 per barrel recently and (3) an ambitious drilling plan implemented during the relatively high oil price environment of calendar 2014 that resulted in meaningfully lower-than-expected additional production.

Miller Energy's Board and management believe this financial restructuring in bankruptcy is a necessary and prudent step that represents the best path forward for the Company. In addition, Miller Energy believes that the Pre-Negotiated Bankruptcy Plan will allow it to target an accelerated timeline for emergence from bankruptcy, at which point it expects to be a stronger, more competitive company. Miller Energy believes this plan will optimize the value and productivity of the Company for all its stakeholders, including its vendors and the State of Alaska.