Miller Energy Resources Inc., Knoxville, Tenn., said it is developing a work program for the Susitna basin north of Anchorage in south-central Alaska, where it has acquired a third license.
The 45,764-acre exploration license is south of the company’s two existing tracts and brings the total holding to nearly 700,000 acres of state lands in Susitna and the Cook Inlet.
Miller’s Cook Inlet Energy LLC subsidiary was issued the new 5-year Susitna license. The company believes the basin to be prospective, especially for natural gas.
The work commitment requires the performance of exploratory work with qualifying direct expenditures totaling a minimum of $250,000. On timely completion, the subsidiary will have the option to convert any or all of the remaining license acreage to oil and gas leases with a 5-year term, 12.5% royalty, and $3/acre annual rentals.
As part of the license agreement, Miller incurred a one-time license fee of $1/acre and posted a $50,000 initial performance bond. An annual performance bond is required until the work commitment is fulfilled.