Houston-based Lucas Energy, Inc. (NYSE MKT: LEI) is an asset-rich, independent oil and gas company developing significant acreage positions in the Eagle Ford and Austin Chalk resource plays in South Texas. Since 2013, the company has undergone significant corporate changes that included the restructuring of its management team, capital structure and overarching strategic vision. A look at where the company is now positioned shows the fruits of those alterations.
Lucas Energy currently has working interests spanning more than 10,000 net acres in South Texas with proved reserves valued at $112 million, in addition to probable reserves of approximately $60 million, according to a reserve report conducted in 2014. The company maintains an “aggressive growth posture” in developing its leaseholds as it seeks to achieve its potential in terms of both size and scope of operations.
In Q3 2016, Lucas Energy achieved what CEO Anthony Schnur, who joined the company in 2012, calls “transformational.” In the company’s Q3 earnings release, Schnur said the company has found ways to navigate the challenging commodity environment and identify growth opportunities through strategic acquisition. In accordance with this strategy, Schnur also referenced the company’s Segundo Resources asset purchase.
“We have also been successful in enhancing our liquidity by amending our line of credit with Silver Star Oil Company (“Silver Star”), followed by the subsequent sale of an additional $200,000 of convertible notes under the line of credit,” he said. “We are currently discussing potential financing transactions that would fulfill our near-term capital requirements as well as our planned asset acquisition, which we believe, if finalized and completed, will ensure the future viability of the Company. While the current commodity price environment continues to be challenging to our operations, it may also create opportunities to expand our footprint through attractive acquisitions, funding permitting.”
Per the Segundo transaction, Lucas Energy will acquire working interests in undeveloped acreage and producing Hunton properties, which currently produce in excess of 1,200 net barrels of oil equivalent per day (BOE/d).
According to a recent corporate presentation, the Hunton play is found in a limestone formation stretching nearly 3 million acres in Oklahoma and surrounding states, characterized by high quality oil and high BTU content natural gas production. The acquisition also provides the opportunity for increased reserves and production, and will result in a corporate name change.
“Following the closing of this transaction, we intend to drill six initial wells and have identified 50 drilling locations in the Hunton assets we are acquiring. As previously mentioned, we will also be changing our company name to Camber Energy, Inc. when the transaction is completed,” Schnur stated in a previous news release.
Executing plans of this nature inherently take capital, and earlier this month, Lucas Energy secured $15 million of equity capital to fund its growth initiative as it works to finalize the Segundo Resources transaction.
“This placement demonstrates confidence in the future of Lucas Energy as we progress towards closing on the Segundo Resources asset purchase,” Schnur stated in a press release announcing the funding. “Having received this commitment establishes some certainty that we can initiate growth and development activities upon closing the acquisition.”
For more information visit www.lucasenergy.com