Lucas Sees 'Significant' Upswing in Eagle Ford, Austin Chalk Reserves

Share Print Bookmark    |    Thursday,June 13,2013

Lucas Energy Inc. has reported summary estimates of its total proved and probable Securities Exchange Commission (SEC) reserves and future net revenues as of April 1, 2013.

Anthony Schnur, Lucas Energy's CEO, commented: "Our current reserve report reflects several steps we have taken to improve our balance sheet and high-grade our asset base. For one, we completed a $4 million sale of our net royalty interest in properties last December within the Baker Deforest Unit in Gonzales and Dewitt Counties.  Secondly, we have researched and collected recent data from the development of surrounding properties by other operators around our acreage that indicate enhanced drilling efficiencies and changes in certain oil to gas recovery ratios.  We also conveyed certain Eagle Ford shale and Austin Chalk assets in our agreed settlement and termination with Nordic Oil, which resulted in a reduction of $24 million of liabilities.  The result of these factors has not only vastly improved our balance sheet but also changed the mix of our reserves, average working interests, and combined with reduced natural gas recoveries and increasing oil recoveries, an improvement in the overall present value of our reserves.

"With our refined reserve base, we believe we have much better opportunities to generate higher returns in 2013 and beyond than we did in 2012," Mr. Schnur added.

Total Proved and Probable Reserves

As of April 1, 2013, the pre-tax present value of estimated future net cash flows from our proved and probable reserves (2P), discounted at 10% (PV-10), was $168.6 million, which represents a 62% increase, or over $64.2 million of PV-10 value, of our 2P reserves last year according to Forrest A. Garb & Associates, an international petroleum consulting firm.  Approximately 79% or $132.6 million of the fiscal 2013 PV-10 value was assigned to our proved reserve base (1P). Approximately 91% of our 2013 proved reserves are proved undeveloped, of which approximately 92% is attributable to crude oil and condensates.  Summary estimates of the Company's proved and probable reserves total 7.2 million barrels of oil equivalent (MMBOE) (2), of which 5.6 MMBOE are proved reserves.  All of Lucas Energy's reserves are located in the Eagle Ford shale, the Austin Chalk, the Eaglebine, and the Buda & Glen Rose formations in Texas.

"The significant increase in the PV-10 value of our total proved reserve base reflects successful drilling activity and recent discoveries in our operating areas, combined with higher realized oil and gas prices.  Going forward, our plan is to shift into a more aggressive development of our proved undeveloped acreage and operate in an efficient manner," concluded Mr. Schnur.

Lucas Energy Proved and Probable Reserves