"Miller Exploration Company Announces Operational Update"
Friday February 2, 5:06 pm Eastern Time
Press Release
SOURCE: Miller Exploration Company
HOUSTON, Feb. 2 /PRNewswire/ -- Miller Exploration Company (Nasdaq: MEXP - news), the ``Company'' or ``Miller'' today announces operational update.
OPERATIONAL UPDATE
Mississippi Salt Basin Project
Miller Exploration has an active ongoing drilling program in Mississippi and is currently participating in wells being drilled or completed on the Arm Dome Prospect (Lee #1), Kola Dome Prospect (Thoth #1 and Venus #1) and the Grange Dome Prospect (Sills #1). Miller is currently shooting a 2-D seismic program on various prospects to confirm additional proprietary drill sites and continues to actively seek outside generated projects that will provide diversification to its prospect inventory and reserve portfolio.
Kola Dome, Covington County, Mississippi:
Drilling operations have been completed on the Key Production Co., Inc. operated Thoth #1 at a total depth of 17,667 feet. Pay has been logged in the Rodessa, Sligo and Hosston formations. Completion operations have commenced with perforations and testing starting at the bottom of the well in the lower Hosston formation. Miller has approximately a 22% working interest in this well. Key Production has approximately a 35% working interest and Remington Oil and Gas has a 16% working interest in this well.
The Key operated Venus #1, an 18,500 foot Hosston test has been spud on the north flank of Kola Dome. This well is currently drilling below 10,000 feet. The prospect is controlled by 3-D seismic data and is one mile north of the Langston #1 and Thoth #1 wells, which are on the south flank of the dome. Miller has approximately a 22% working interest in this well. Key Production has approximately a 35% working interest and Remington Oil and Gas has a 16% working interest in this well.
Arm Dome, Lawrence County, Mississippi:
The Lee #1 at Arm Dome was perforated from 16,063 feet to 16,080 feet. The well was swab tested at rates of 50 to 60 barrels of oil per day and is currently being evaluated. Miller has approximately a 54% working interest in the well.
Grange Dome, Lawrence County, Mississippi
The Miller-Sills #1 well is currently drilling below 17,200 feet. This 3- D seismic controlled prospect is permitted to 17,500 feet to test the Hosston formation. The Company presently has approximately a 54% working interest in this prospect.
Dry Creek Dome, Covington County, Mississippi
The Company has permitted the Minerals Management #6 at Dry Creek Dome. This 15,500 foot Hosston test will offset the Minerals Management #2 which has produced in excess of 7.6 BCFG and 191,000 BO to date. The Minerals Management #6 will test an adjacent fault block and be located up-dip to the Minerals Management #4. The Minerals Management # 4 was structurally low with tight, oil saturated sands in the Hosston. A 2-D seismic line was shot, which confirmed that the Minerals Management #6 location was drillable, and that significant structural advantage could be gained over the Minerals Management #4 well. This well is scheduled to spud in February. The Company plans to retain an approximate 50% working interest in this well.
Smith Station Prospect, Hinds County, Mississippi
The Company will participate in the re-entry of a previously drilled Cotton Valley well called the Mobil #1 Parker 30-11. This well was drilled to 18,000 feet in 1984 and logged 24 feet of pay sand in the Cotton Valley formation. The well was never tested in the Cotton Valley and was subsequently abandoned. Re-entry operations are scheduled to begin in February. Roundtree and Associates is operator and Miller has a 37.5% working interest in this well.
North Moselle Prospect, Jones County, Mississippi
The Company expects to participate at between a 35% to 45% working interest in the North Moselle Prospect. This prospect is 3-D controlled and is located northeast of the prolific Moselle Dome which currently produces from four Hosston wells. Upper and Lower Hosston sands below 14,000 feet are the objectives at North Moselle. Miller will be the operator and this well is scheduled to be spud in the second quarter of 2001.
Midway Dome, Lamar County, Mississippi
The Company is permitting the Allar #7 on the north flank of Midway Dome. This 3-D controlled prospect will test the Hosston formation at 19,000 feet. The Allar #7 is located up dip to the Allar #3 dry hole drilled in 1998. The Allar #7 will gain over 700 feet of structure over the Allar #3 which had shows, but was tight in the prospective sands. The Company plans to retain an approximate 50% working interest in this well.
Ruth Dome, Lincoln County, Mississippi
The Company has permitted the Clark Farms #1 well at Ruth Dome. This well is a proposed 8,100 foot Lower Tuscaloosa test. Nearby Little Creek Field has produced over 56 million barrels of oil from the Lower Tuscaloosa formation. The Company is seeking working interest participants on this prospect. This prospect is based on 2-D seismic data. Miller plans on retaining a 50% working interest in this prospect and will be the operator.
Illinois Basin Coal Bed Methane Project
The Company has acquired approximately 23,000 acres in Southern Illinois for the purpose of exploring for gas reserves from Pennsylvania aged coals. This play, which is in its infancy stage, could offer low risk drilling opportunities and large reserve potential. This project provides Miller with the opportunity to identify a large area of reserves for relatively minor costs. The addition of these longer-lived reserves would provide geographic and performance diversity to the Company's reserve portfolio. Miller is currently permitting two test wells in the project area and plans to drill up to seven wells during the first half of the year. The Company currently has a 100% working interest in the project.
Blackfeet Project
Miller has held discussions with the new Blackfeet Tribal Council and continues to pursue a mutually agreeable resolution of their differences. Successful resolution would provide employment opportunities for the Tribal members and economic benefits to the Tribe as well as Miller. The Company hopes to be able to include Tribal Lands in its drilling plans for 2001. Both parties realize the advantage of drilling wells and the pursuit of hydrocarbons versus protracted litigation.
The Company has recently assembled approximately 10,000 acres of non- tribal lands on the reservation and is moving ahead with plans to drill three test wells on fee leases in this area. These wells will evaluate the potential identified in a well drilled in 1980 which tested gas from the Horsethief formation at 550 feet. If the initial drilling is successful, the presence of a gas pipeline approximately 1/4 mile from the drill sites, the shallow depth, the acreage position, and the presence of gas in the Horsethief formation provide the elements for accelerated field development in the future.
The Company is continuing to pursue legal remedies to their contractual issues in the Blackfeet Project with its partner K2 Energy Corp. No court date has been set as of yet.
Miller is an independent oil and gas exploration and production company with established exploration efforts concentrated primarily in the Mississippi Salt Basin, Illinois Basin and Blackfeet Reservation. Miller emphasizes the use of 3-D seismic data analysis and imaging, as well as other emerging technologies, to explore for and develop oil and natural gas in its core exploration areas. Miller is the successor to the independent oil and natural gas exploration and production business first established in Michigan by members of the Miller family in 1925. Miller's common shares trade on the NASDAQ under the symbol MEXP.
Except for the historical data herein, the matters discussed in this press release are opinions, forward looking statements, assumptions, and estimates that are subject to a wide range of risks and uncertainties, and there is no assurance that the Company's goals, estimates and expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward looking statements, including but not limited to the volatility of oil and gas prices and changes in oil and gas drilling and acquisition programs, operating risks, production rates, reserve replacement, reserve estimates, the effect of the Company's hedging activities, the actions of our customers and competitors, government regulations, changes in general economic conditions, and the state of domestic capital markets and uncertainties more fully described in the Company's Annual Report on Form 10-K as amended for the year ended December 31, 1999 as filed with the Securities and Exchange Commission.
SOURCE: Miller Exploration Company
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