Black Gold
Long/short equity, oil & gas

Lucas Energy Inks Eagleford Deal But Still Lacks Funds To Drill

On August 26th, 2014, Lucas Energy (LEI) announced a binding agreement for drilling several Eagleford Shale wells on 400 acres in Karnes County, Texas. Previously, Lucas had announced a deal pertaining to this same acreage, however, with the company absolutely silent on the previous agreement in various filings since, it was pretty obvious that agreement had fallen through.

The new agreement gives Lucas an upfront payment of $444,000 in exchange for a 50% working interest (WI) in 400 acres. This figures out to around $2,200 per acre, which is extremely low for Eagleford acreage. LEI and the operating partner, Oak Valley Resources, will go heads up 50% each on every well drilled on the acreage in question. This looks like...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
PRO Top long ideas returned 21.7% in 2016**
"As a PRO member, we get uniquely valuable perspective that go beyond our quantiative analysis... We rely on PRO to get beyond the numbers quickly and add much needed perspective. It keeps me ahead of the next big thing. - Mark Choate, Malaga Cove Capital"
Mark Choate, Malaga Cove Capital
"Contributors (writers and commentators), often have a long history in the secuirities they opine on and some are clearly well positioned industry participants with detailed industry views that can help provide color on where the skeletons are buried in a particular secuirity and/or industry."
Jim Roumell, Roumell Asset Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details