Miller Energy Announces Preliminary Agreement With Second Lien Lenders and Files for Reorganization Under Chapter 11 of the U.S. Bankruptcy Code - Seite 3

The Chapter 11 process should allow Miller Energy to preserve the value of its assets and to operate its business with minimal interruption while management implements the restructuring in a deliberate, court-supervised manner. Miller Energy would like to thank its employees, whose hard work, focus and dedication has been and will remain essential to continued operations.

As it proceeds with its financial restructuring, the Company expects, based on current commodity prices, that its cash on hand and cash from operating activities coupled with its expected state cash tax credit receipts and its DIP Facility of up to $20 million will be adequate to fund its projected cash needs, including the ongoing and timely payment of operating costs and expenses.

In addition to the filing of the Chapter 11 Cases, Miller Energy asked the Bankruptcy Court to consider several "first day" motions on an expedited basis enabling it to continue its operations in the ordinary course. Importantly, the Company expects to pay timely all its vendors and other service providers in full for going-forward services and its employees' salaries and benefits, while maintaining its cash management systems.

Under the terms of the Pre-Negotiated Bankruptcy Plan, the Second Lien Lenders will convert a substantial amount of their existing loan into equity in the reorganized Company. The resulting reorganized company is, as a result, expected to be well-capitalized, competitive and able to grow its operations.

The Second Lien Lenders may terminate the Pre-Negotiated Bankruptcy Plan under certain circumstances, including if (i) a termination event occurs under the DIP Facility, including if the Company fails to meet certain milestones, (ii) the Chapter 11 Cases are converted to a chapter 7 liquidation or dismissed, or (iii) a trustee or examiner with expanded powers is appointed.

The Company can terminate the Pre-Negotiated Bankruptcy Plan if it believes in good faith that its fiduciary duties require that plan's withdrawal.

The Restructuring Committee has directed that Miller's financial advisor, Seaport Global Securities ("SGS"), in conjunction with management and at the direction of the Restructuring Committee, continue efforts to solicit alternative refinancing, asset sale and restructuring proposals. SGS and management will report all potential offers to the Restructuring Committee for their evaluation with the goal of ensuring that the Company maximizes the overall recoveries for its stakeholders.