Though the company’s executives say they are fighting to avoid it, it’s impossible not to feel like Miller Energy is getting very close to bankruptcy. Revenue has not been able to keep up with debt, and the company has had a serious problem generating enough funds. In that light, bankruptcy could be around the corner.
The company is now based out of Texas, but it just completed a move from Tennessee.
One of the problems that the energy corporation has had is that some of the wells it uses in Alaska have turned out to be duds. Setting up new wells is by no means cheap, and each one is a significant investment. To have a well fail and not produce any revenue at all strikes a hard blow against a company that is already struggling.
Delays have also been a problem. The company has been moving to do most of its exploration in Alaska, but delays that hold the process back also cut into profits—especially when the result at the end of the delay is nothing but a dud well.
The CEO of the company was just brought on about a year ago. He noted that the dropping oil prices—which consumers have loved at the pump—have also hurt the company. With lower sale prices and less income on the oil they can sell, it is harder than ever to take losses. However, he did say that poor choices in the past were a big reason for the company’s current trouble.
When debt becomes too much, CEOs and other executives may want to find out how bankruptcy can help them reorganize and keep the company afloat.
Source: Fuel Fix, “Miller Energy hopes to avoid bankruptcy,” Jordan Blum, July 29, 2015