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Dutton Associates Featured Company: Lucas Energy, Inc. (LEI)

Lucas Energy, Inc. is an independent oil and gas company building a diversified portfolio of valuable oil and gas assets in the United States. The company identifies oil and gas assets that are underperforming at the time and focuses their efforts on revitalizing them through a demanding process of evaluation, application of modern well technology, and stringent management controls. By doing this, the company is able to increase their asset base and cash flow, while significantly reducing the risk of traditional exploration projects. Lucas Energy’s financial standing allows them to minimize the high overhead of traditional E&P companies.

Since 2004, Lucas Energy has acquired 61 properties that total over 11,000 acres in Texas. During this time, Lucas Energy commenced an aggressive 12-month, 10-well lateral drilling program in order to enhance production and reserves from existing properties. The purpose of the program was to exploit the multiple pay zones in the Austin Chalk formation in Texas. With over twenty years of operational experience with Austin Chalk, horizontal drilling gives the Lucas team a replicable platform allowing them to obtain leases and drill hot spots located within the property.

Being a small company gives Lucas Energy a distinct advantage within the oil and gas industry. The company seeks out small acquisitions while larger companies and most mid-size companies search for greater acquisitions to make a successful increase in the size of the company. These larger acquisitions are sold for a premium and are usually harder to locate and negotiate transaction terms. Although smaller acquisitions are not, relatively, less expensive, they are usually easier to find and the terms of the agreement are not as difficult to negotiate.

Like most companies, Lucas Energy relies heavily on their experienced management team, who possess a vast amount of experience within the oil and gas industry. Experience in the oil and gas field is a crucial factor as it helps locate acquisitions, evaluate possible acquisitions, and enhance cleanup and improvement of the acquisitions. As of today, the company now holds more than $90 million in independently proven reserves. By applying strict fiscal controls, the management team has achieved and maintained profitability since inception.

Let us hear your thoughts: Lucas Energy, Inc Message Board

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