Lucas Energy Announces Fiscal Year 2013 Estimated Proved And Probable Reserves

Jun 13, 2013, 12:46 ET from Lucas Energy, Inc.

HOUSTON, June 13, 2013 /PRNewswire/ -- Lucas Energy, Inc. (NYSE MKT: LEI), an independent oil and gas company with its main operations in Texas, today provided summary estimates of its total proved and probable Securities Exchange Commission ("SEC") reserves and future net revenues as of April 1, 2013.

"Our current reserve report reflects several steps we have taken to improve our balance sheet and high-grade our asset base," stated Anthony Schnur, Lucas Energy's CEO.  "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

Estimated Net Reserves 1

Estimated Future Net Revenue

Oil & Condensate

Natural Gas

Undiscounted Cash Flows

Discounted 10% 1

Reserve Category



($ thousands)

($ thousands)

April 1, 2013












Total Proved (1P)





Total Probable





Total Proved & Probable (2P)





April 1, 2012












Total Proved (1P)





1 Defined within the guidelines of the U.S.  Securities Exchange Commission (SEC); discounted future net revenue is not represented to be the fair market value of these reserves.

2 Oil equivalents are determined under the relative energy content method by using a ratio of 6.0 MMbtu to 1.0 Bbl of oil.

In accordance with SEC regulations, estimates of proved reserves as of April 1, 2013 were made using the 12-month average of the first-day-of-the-month spot price for West Texas Intermediate (WTI) oil and Henry Hub natural gas.  Oil prices are based on a benchmark of $97.24 per barrel, and gas prices per thousand cubic feet (mcf) are based on a benchmark of $4.03 per million British thermal units (MMbtu).  These oil and natural gas prices are adjusted for energy content or quality, transportation and regional price differentials by lease.  Realized commodity prices, net to Lucas Energy, were $104.76 per barrel for crude oil and $3.51 per MMbtu for natural gas.

About Lucas Energy, Inc.

Lucas Energy is an asset-rich, independent oil and gas company developing its significant acreage positions in the Eagle Ford, Austin Chalk, Eaglebine and Buda & Glen Rose resource plays.  Based in Houston, Texas, Lucas Energy's new management team is committed to creating shareholder value through developing its asset base, improving operating efficiencies, and building a strong balance sheet.

For more information, please visit the Lucas Energy web site at

Safe Harbor Statement and Disclaimer

This news release includes "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Forward looking statements give our current expectations, opinion, belief or forecasts of future events and performance.  A statement identified by the use of forward looking words including "may," "expects," "projects," "anticipates," "plans," "believes," "estimate," "will," "should," and certain of the other foregoing statements may be deemed forward-looking statements.  Although Lucas believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this news release.  These include risk inherent in natural gas and oil drilling and production activities, including risks of fire, explosion, blowouts, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of drilling operations; delays in receipt of drilling permits; risks with respect to natural gas and oil prices, a material decline in which could cause Lucas to delay or suspend planned drilling operations or reduce production levels; risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in natural gas and oil prices; risks relating to unexpected adverse developments in the status of properties; risks relating to the absence or delay in receipt of government approvals or fourth party consents; and other risks described in Lucas's Annual Report on Form 10-K and other filings with the SEC, available at the SEC's website at  Our actual sales production rates can vary considerably from tested initial production rates depending upon completion and production techniques and our primary areas of operations are subject to natural steep decline rates. By issuing forward looking statements based on current expectations, opinions, views or beliefs, Lucas has no obligation and, except as required by law, is not undertaking any obligation, to update or revise these statements or provide any other information relating to such statements.

Year-end pre-tax discounted present value of proved reserves, or PV-10, is a non-GAAP financial measure as defined by the SEC.  We believe that the presentation of PV-10 is relevant and useful to our investors because it presents the discounted future net cash flows attributable to our proved reserves prior to taking into account corporate future income taxes and our current tax structure. We further believe investors and creditors use PV-10 as a basis for comparison of the relative size and value of our reserves as compared with other companies.


William J. Dale

Chief Financial Officer

Lucas Energy, Inc.

(713) 528-1881

Ken Dennard / Carol Coale

Dennard - Lascar Associates

(713) 529-6600



SOURCE Lucas Energy, Inc.