Lucas Energy (LEI) Updates on Eagle Ford Shale, Oklahoma Ops; Continues to 'Aggressively' Pursue Acquisitions

October 20, 2016 7:40 AM EDT
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Lucas Energy, Inc. (NYSE: LEI) updated its operational activity in the Eagle Ford shale and development activity in Oklahoma.

Specifically, in south Gonzales County, Texas, in the Eagle Ford shale, the Company participated in the Cyclone #9H well that tested 598 barrels of oil equivalent per day (Boe/d) and a 30-day initial production rate of 486 Boe/d. The Cyclone #10H tested 631 Boe/d and a 30-day initial production rate of 521 Boe/d. Originally estimated to cost an average of $5.2 million, these wells have been drilled and completed at an average cost of $4.7 million. Both are producing approximately 90% crude oil from a processed three-stream basis on a 18/64" choke. Lucas owns an 8% working interest in these two wells.

Lucas's Griffin 1H Austin Chalk well (100% working interest) in Karnes County was recently re-activated after being shut-in while two nearby Eagle Ford wells were being completed. The Griffin 1H came back on production in October at 55 boe/d on the initial 48-hour test after having produced 5 Boe/d prior to shut-in.

The Company has kicked off a maintenance and upgrade program budgeted at $0.5 million to be spent over the next 60 days with the expectation of a five-month payout on the investment. In Oklahoma, the program includes the repair and/or the replacement of down-hole pumps in addition to mechanical repairs and upgrades on certain wells in Texas. Lucas expects to continue these maintenance operations as it reviews the new well drilling locations in its core areas of development.

"Since the Segundo acquisition was announced in December 2015, the prices for oil, natural gas and NGLs have increased on average by over 40%," said Anthony C. Schnur, the Chief Executive Officer of Lucas Energy. "The change in the commodity price environment has allowed Lucas to reassess its opportunities to increase shareholder value. As we ramp up production on our legacy and newly-acquired assets, the Company continues to aggressively pursue acquisition opportunities with both producing and nonproducing reserves. We are convinced that the state of 'lower for longer' commodity price environment offers exceptional value on the asset acquisition front."

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