SCOTT BELLINGER, MICHIGAN OIL & GAS NEWS
Drew Martin (left) and Luke Miller, both fourth generation members of the Miller family, are pursuing growth opportunities for Miller Energy Co. in the Michigan Basin nearly 100 years after their great-grandfather Clyde Miller and his brother George came to the state as drilling contractors.
KALAMAZOO, Mich. — Miller Energy Co. principals Mike Miller, Luke Miller and Drew Martin all grew up in — and around — the oil and gas industry as part of one of the most storied domestic petroleum families our state or nation have ever produced, but for each the journey to finding a home in the industry and the family business proved to be one of personal discovery.
The Miller family’s heritage in the oil and gas industry dates back to the late 1920s, when Clyde B. and George Miller came to Michigan, forming Miller Brothers Drilling Contractors at Ashley, Mich. in Gratiot County and drilling wells in some of Michigan’s earliest oil developments.
The second generation of Millers to take an active role in the business, Clyde’s sons C. John Miller and Clyde E. “Gene” Miller, established Miller Brothers in the 1950s. The partnership first made its mark developing Devonian-age oil reserves in southwestern and western Lower Michigan before moving on to the most prolific oil and gas play the state had yet seen — the Northern Niagaran Reef Trend in the early 1970s.
Mike Miller was in high school in the late 1960s at a time when his father, C. John Miller, was rising to prominence in the industry. John served as elected president of the Michigan Oil and Gas Association (MOGA) in 1966 and 1967 while also becoming active nationally in the Independent Petroleum Association of America (IPAA), which elected him its president in 1973.
“I didn’t really see myself going into the oil and gas business at that time,” Mike Miller said recently. “I admired my dad, loved him dearly, had huge respect for him, but I just didn’t see that as being my desire.” The industry was struggling at that time, Miller said, with price controls keeping oil at about $3 per barrel and the price of natural gas well under a dollar.
“There just wasn’t a lot of romance in the business at that particular time. It was a real struggle to make a living, it was very challenging. [The business] didn’t really grab my attention, Miller added, despite having worked for several summer vacations from school at various jobs in the oilfields.
But a lot of attention — both positive and negative — was focused on the domestic oil and gas industry when the Arab members of the Organization of Petroleum Exporting Countries (OPEC) announced an oil embargo shortly after C. John Miller became IPAA’s elected leader, Mike Miller said.
That event and the repercussions it had on the domestic industry piqued his interest in the business and by the time he graduated from Western Michigan University with a business degree he said he had decided that he did want to go into the business.
Joining Miller Brothers Oil Corp. at about the same time that Mike did was his cousin (and Gene Miller’s son), Kelly Miller, who had just earned a geology degree at the University of Oklahoma. Working in the family business was not without its challenges, Mike said, adding that “those were great times, having my dad and Gene and (his other uncle) Jack (Miller) as mentors. It was a great time to learn, it was challenging and it was exciting.”
The company thrived and, after more than three decades as a partnership, John and Gene Miller chose in the mid-1980s to pursue future opportunities as two separate entities, with John and Mike relocating from Miller Brothers’ longtime headquarters in Allegan, Mich. to Kalamazoo as Miller Energy Inc. while Gene and Kelly moved their families to Traverse City and established Miller Oil Corp.
Miller Energy’s next decade was marked by its late 1980s entry into the Michigan Antrim Shale development as a significant, non-operating, working interest partner, with the company becoming one of the first to monetize the I.R.S. Section 29 credit through production sales.
In 1991 John Miller established an international exploration company, Global Exploration, Inc. (or GLOBEX) along with brother Gene, brothers A.V. Jones and Jon Rex Jones and Michigan’s William C. Myler, working out of Dallas and later Houston. The very successful GLOBEX venture was finalized with the sale of the entire company to Marathon in 2002.
Bringing the focus back to the domestic front, Miller Energy and other Michigan partners entered into a joint venture with Grand Rapids, Mich.-based Wolverine Oil and Gas in 2003 to explore the Central Utah Thrust Belt, with the 2004 discovery of the Covenant Field resulting from that work rated at the time as one of the most significant U.S. onshore oil finds in several decades.
During the period between the initial work in Utah and Miller Energy’s participation in a successful southern Michigan Trenton-Black River exploration project beginning in 2011 a fourth-generation member of the Miller family joined the company.
Like his father Mike, as a young man, Luke Miller said he “always knew it was there and knew what was happening” with the business and the industry, with both his dad and his grandfather fully engaged. “In reality growing up in it, I just kind of said ‘I want to do my own thing,’” he said during a recent interview.
Luke, who earned a degree in business management from Cornerstone University, got his first real taste of the business while “shadowing” his dad and working in the company’s land department for a couple of months in between other jobs. “That’s probably where the interest was originally sparked for me,” he recalled. “We were doing some deals that were big and being able to sit at the table at that time was just neat. It wouldn’t be an honest answer to say that the tie-in to the family legacy was not important to me, being part of four generations of a family business. There is definitely some pride in being involved in that and having that opportunity,” Luke Miller said.
One of the prerequisites that Mike Miller placed on anybody expressing an interest in getting into the business was to go out and get experience outside the family business first, Luke said, so he took a job working in the land department for Atlas Energy Resources acquiring leases in the Marcellus Shale. It wasn’t long before he returned home to join Miller Energy, Luke said, with the business taking off rapidly as oil prices had reached $100 per barrel. Luke said he saw coming into the family business as an opportunity, not just a fallback plan. “You had to bring value to the table in order for it to make sense,” he noted.
Luke’s cousin Drew Martin also graduated from Cornerstone University and joined Miller Energy in 2011 after working for two years in an investment brokerage house and four years in investment banking. “The interesting thing for me,” Drew said recently, “was that it was something that never really crossed my mind until I was a couple of years out of college.”
The road that Drew took in becoming part of the family business had similarities to those traveled by his cousin Luke and uncle Mike, but was different nonetheless. Drew noted that while his parents were not in the business (his mother is a passive Miller in the family business) the three people that he would go to first if he had a big decision to make were his grandfather (C. John Miller), Mike (Miller) and Jim Carl, who joined Miller Energy as controller in 1980 and continues as an adviser today.
“Just to get their perspective and their advice was really cool,” Drew said. “So to think about if I were going to go and work in an environment where I could be a business creator, what better place to do that than to be around people that you already think the world of?”
Drew said he reached out to Mike after working at Fifth Third Bank for about three years to say that he had learned a lot about what the business had done for the Miller family and if there was ever an opportunity for him to come back and truly contribute and not just benefit from the company’s success he would like to do it.
“When Mike said, ‘We need somebody to come in and work for Jim (Carl) and learn from him,’ that was one of the big factors that I could not duplicate anywhere else. To get an opportunity to be an entrepreneur and add to the legacy and work with people that you love and care about is a lot of fun.”
One of the things that Mike Miller, Luke Miller and Drew Martin have done since the passing of C. John Miller in March of 2014 and his wife Reva Miller in May 2016, leaving Mike and his sisters as shareholders, has been to try to figure out the “best path forward” for the family business, Luke said.
“Drew and I were both excited to come back home to participate in the family business and be able to grow something that we could continue on,” Luke said. What they ended up with was a plan to provide both separation and protection for shareholders of Miller Energy’s existing assets — including its Antrim Shale, Utah and Michigan Trenton-Black River production — while allowing Drew and Luke to pursue opportunities that carry some risk going forward.
Mike, Luke and Drew are managing members of the Miller Energy entity, which will pursue growth opportunities under the primary management of Luke and Drew, while the existing assets have been put into a company known as Legacy Energy, which is managed by Mike.
“We made the split with the underlying goal of getting back to a place where we’re more of an active operator,” Luke said. “That doesn’t mean we necessarily have to operate all of our assets, but we’re looking to go in that direction.”
A motivating factor for the fourth-generation members of the business, Luke said, was when both were on a field tour one day with John before he passed and he commented, ‘Hey guys, how come our name is not on that well sign?’ “I think that was even before we had an inclination to operate,” Luke noted, “But it kind of struck a chord that both Drew and I were interested in pursuing.”
“In terms of where we are now and going forward, the more I learn about the business, the more exciting it becomes,” Luke said. “From a broad perspective of how it touches everyone’s lives to a smaller perspective of the group of people that we work with here in Michigan. You can be a competitor at one point and a partner at another point and you’re working together to develop the resources here in Michigan in an efficient way.”
The new motto for Miller Energy is “Developing Energy Empowering People,” Luke said. “I’m excited about the team that we have put together here. We’re talking about getting people employed, building a company. We can empower our employees in their personal lives, as well as empowering landowners and investors,” Luke noted.
The members of the team that Luke Miller refers to include: Jim Carl, veteran petroleum geologist Lew Murray, petroleum geologist and Western Michigan University graduate Kyle Patterson, who came to Miller Energy after gaining experience with Shell, and another Western Michigan grad, geologist Jessica Szkody.
Luke said that when he came back to the family business the company was working on a broad scope of activity. “We spent a lot of time looking outside of Michigan, but we found out that the best deals, the ones that worked out best for us, were the ones we were doing in Michigan,” he said.
Miller Energy’s primary focus is on Michigan now, with the company closely following the Central Basin Dundee play that several operators and their partners have found recent success in.
“We believe the Michigan basin has much untapped potential, which we have seen in the last few years in the Trenton and the Dundee,” Mike Miller said. Both of those plays have been aided significantly by 3D seismic technology and advances in drilling and well completion techniques, he added.
Luke Miller agrees, adding that the new technologies can help in getting beyond limitations that once hindered exploration and development, while also being key to finding brand new reserves.
“We’re excited by the opportunities we have with our new technical team in place, the chance to work with longstanding partners and to step out and build new relationships,” Luke said.
He sees Michigan as having a healthy and friendly business environment of partners, competitors, suppliers and service contractors as well as a consistent, workable regulatory scheme.
“Michigan is where we live, work and play,” Luke said. “It’s fun to be able to see the results of our work, have our boots on the ground without having to travel great distances.”
Referring to the oil and gas business as “ever evolving,” Mike Miller said that after seeing more and being exposed to more than the fourth-generation Miller family members now in the business his thoughts inevitably return to the unique nature of the industry’s “fraternity” in the state. He recalled the experience of working with “established men who had unbelievable reputations and great integrity,” such as the Mylers, the Jansmas and at the time, Allan Morrow, Jack Harkins, Rollie Denison and Bill Brown.
“We did more deals (with these men) on a handshake, no paper and very little legal activity, Mike said. “Outside of working with my immediate family, working with the ‘fraternity’ in the Michigan oil and gas industry was absolutely outstanding. These men exemplified great business men, but more importantly they exemplified great family men. It was a great era to see and be involved in.”
Drilling new wells and being involved in new plays over the years — in Michigan, in other states and in the international arena — can be exciting, Mike noted, especially when making big deals, finding big reserves and watching the company’s balance sheet grow.
“But I realize now that it’s about more than dollars and cents, it’s about creating better lives for our employees, our investors and the communities that we live in and work in.”
“The real importance of the financial success that we have had is that it has given us the means to be able to give back,” Mike Miller said.