Is This The Right Time To Bet On Miller Energy Resources Inc (MILL) ?

Miller’s neighbor is Apache Corporation (NYSE:APA) which has leased 1 million acres in the Cook Inlet Basin. Apache estimates that there are at least another 1.3 billion to 1.4 billion barrels of oil yet to be discovered in the basin. According to Apache’s CEO Rod Eichler, the Cook Inlet “is a play that is just ripe for exploitation utilizing modern seismic technology”. This is why the company added to its holdings in the Cook Inlet in 2012, winning bids for seven tracts for exploration.

In August 2012, the company announced its plans to drill its first well there by December 2012. Apache secured the Patterson-UTI’s drilling rig which was transported via truck and barge from the Bakken play in North Dakota. About 100 people are employed by Apache’s contractors and subcontractors during the drilling operation and the investors should expect more news from this front later in 2013.

Anadarko Petroleum Corporation (NYSE:APC) has also assets in the Cook Inlet Basin and in Alaska’s National Petroleum Reserve further north, where it bid on 125 blocks in May 2012, winning 99 of the bids. 92 of these bids will be operated under a 22% WI for Anadarko, and Anadarko will be 100% owner and operator of the remaining seven. So it is clear that Anadarko is expanding its operations in Alaska and it could become an aggressive player in the Cook Inlet Basin too.

Foolish Conclusion

All in all, Miller is not a bad bet at the current levels. Given its recent successful drilling results from Alaska and Tennessee, the company seems to be moving to the right direction. If Miller continues to expand its production at a moderate pace without piling up debt, the positive momentum will return driving the stock at higher valuations.

The article Is This The Right Time To Bet On Miller Energy Resources ? originally appeared on Fool.com and is written by Nathan Kirykos.