UPDATE: Imperial Capital Initiates Coverage on Miller Energy Resources on Successful Cook Inlet Development and Exploration

In a report published Friday, Imperial Capital analyst Kim Pacanovsky initiated coverage on Miller Energy Resources (NYSE: MILL) with an Outperform rating and $9.50 price target.In the report, Imperial Capital noted, “We are initiating coverage of MILL with an Outperform rating and one-year price target of $9.50, about 33% above the recent share price. MILL purchased its Cook Inlet assets out of bankruptcy in 2009 for about $4.5mn, the same assets that Pacific Energy Resources earlier purchased for $460mn. Post-acquisition, MILL was hampered with rig delays, but since installing its newbuild rig on the Osprey platform, it has reported a string of successful wells, demonstrating the value of its assets and the acumen of its engineering and geological/geophysical (G&G) team. It has successfully grown production from nearly nil to over 3,000 boe/d in Alaska, and we expect significant additions to its proved reserves in April 2014. Miller's proved NAV of $7.61/share has significant running room, e.g., MILL booked only slightly less than 6mmboe of proved reserves booked on Redoubt, whereas the previous operator had booked 50mmbbl of PUDs.”Miller Energy Resources closed on Thursday at $7.16.