Lucas Energy Soars on New Purchase Agreement

By Chris Lange Updated Jan 13, 3:32PM EST · Published Dec 31, 12:55PM EST

Lucas Energy Soars on New Purchase Agreement — © Thinkstock

Lucas Energy Inc. (NYSEMKT: LEI) was absolutely leading the bulls in Thursday’s session on news of a purchase agreement. The company announced that is has signed a purchase agreement to acquire, from 21 different entities and individuals, working interests in producing properties and undeveloped acreage.

The assets being acquired include varied interests in two largely contiguous acreage blocks in the liquids-rich Mid-Continent region. The properties currently produce in excess of 1,200 net barrels of oil equivalent per day (BOE/d), of which 53% are liquids from 114 producing wells. The bulk of the production is from the Hunton formation, holding approximately 43,000 gross acres (9,900 net acres) in central Oklahoma.

Additionally, the development drilling opportunities for at least 40 additional wells have already been identified. According to a recent third-party reserve report (as of December 1, 2015), total proved developed reserves are 5.4 million barrels of oil equivalent (MMBOE) comprised of 6% oil, 47% natural gas liquids and 47% natural gas.
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Anthony C. Schnur, Lucas’s chief executive officer, commented:

The completion of this transaction will raise the trajectory of opportunities for Lucas, not only as we increase our existing production base and future development opportunities, but also as we expand our reach into a key play in the Mid-continent and broaden our strategic horizons. We are extremely excited to have identified an acquisition that provides us with stable, long-lived reserves with substantial current production and ample drilling opportunities that are economic in a prolonged depressed commodity price environment. We are further encouraged by the planned upcoming additions to our board, especially the appointment of Richard N. Azar II as our Chairman. I have known Richard over the last three years, and I welcome his depth of knowledge and strategic sense to our Company.

Shares of Lucas Energy were trading up over 400% at $8.86 on Thursday, with a consensus analyst price target of $2.00 and a 52-week trading range of $1.33 to $11.25.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.