Houston-based Lucas Energy, Inc. (NYSEMKT: LEI) is a
growth-oriented, independent oil and gas company developing significant acreage
positions in the Eagle Ford and Austin Chalk resource plays in South Texas.
Since mid-2014, the price of a barrel of oil has dropped from over $100 to less
than $50, bottoming at about $26 in February of this year. The result has been
more than 80 bankruptcies in the energy sector over the past 18 months, with
survival becoming the primary objective for industry operators.
Leaning on the experience of its management team, Lucas
Energy has survived the recent downturn in energy prices while simultaneously
positioning itself to capitalize on the current market environment and expand
its national footprint. As part of these efforts, the company announced a
purchase agreement to acquire working interests in producing properties and
undeveloped acreage in two largely contiguous acreage blocks in the
Mid-Continent region. This proposed acquisition, which includes assets from 21
different entities and individuals, is currently under review by the Securities
and Exchange Commission, with closing expected to occur by October 2016.
“While the past year was another difficult one for the
energy industry, it afforded our Company with multiple opportunities, with the
most significant being our agreement to acquire the working interests in
certain oil and gas properties in Texas and Oklahoma from Segundo Resources,”
Anthony C. Schnur, chief executive officer of Lucas Energy, added in a recent news
release.
Moving forward, the completion of the Mid-Continent
acquisition will play a key role in Lucas Energy’s growth strategy. The company
anticipates a significant increase in daily production stemming from this
transaction that will effectively redirect its strategic vision. To better
reflect this updated vision, Lucas Energy has also announced plans for a
rebranding name change to Camber Energy, a name which the company believes
better reflects the inclining production rates typically observed with assets
in the Hunton formation of Central Oklahoma’s Mid-continent reserves.
Outside of this planned acquisition, Lucas Energy’s primary
development activities are located in the Eagle Ford Shale trend, which is
recognized as one of the most active plays in the United States. With the
precipitous drop in oil prices over the past year and a half, activity at the
company’s Eagle Ford assets has been limited. However, advances in drilling and
completion technologies continue to decrease drilling costs, and Lucas Energy
will continue to review opportunities to accelerate development of its five
million barrels of proved reserves through direct development or strategic
partnerships.
Though revenues are down across the board in the oil and gas
industry, Lucas Energy paints a promising picture for the future with a
three-pronged long-term strategy designed to navigate the prolonged down cycle.
First, the company intends to continue developing its acquired and existing
assets by working closely with its lender and entering agreements with
institutional investors. Second, Lucas Energy will look to capitalize on the
down cycle through the completion of bolt-on acquisitions that offer
significant value with minimal upfront costs. Finally, the company will
continue to pursue material acquisitions in order to create a marketable asset
portfolio with expanded drilling inventory.
“The last several years have been difficult for Lucas, and
the fiscal 2016 results bear that out. However, we are confident in our future
direction and ambitious growth initiative,” reads a recent statement from the
company’s management team. “What we will create with Segundo and the
establishment of Camber is a platform on which to build our Company, through
the acquisition, and development of additional reserves through and out of this
cyclical downturn.”
For more information visit www.lucasenergy.com
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