Independent Third Party Estimates PV-10 of $90.1 Million
or $8.82 per Share
Proved Reserves Increase to 1.8 Million Barrels of Oil
HOUSTON, May 27, 2008 (PRIME NEWSWIRE) -- Lucas Energy, Inc. (AMEX:LEI), a U.S. based independent oil and gas company, today announced the results of an independent study of the Company's estimated reserves and future net revenue for its interests in Gonzales, Karnes, Wilson, Baylor and Atacosa Counties, Texas, performed by Forrest A. Garb & Associates, Dallas, for the period ended March 31, 2008.
The report estimated future net revenue of total proved reserves or discounted PV-10, which is commonly known as the SEC PV-10 figure, of $90.1 million for the period ended March 31, 2008, an increase of over 150% from $35.9 million in the year-ago period. This PV-10 estimate represents a total net asset value (NAV) of Lucas Energy's oil and gas properties of $8.82 per basic and diluted share. The report also estimated that the undiscounted future net revenue (FNR) is $143.5 million for the period ended March 31, 2008 up 129% from $67.4 million in the year-ago period.
During the year ended March 31, 2008, proved developed producing reserves increased 97% to 496.02 (MBbl) from 252.20 (MBbl) in the period ended March 31, 2007. The total proved estimated net reserves is 1,797,230 barrels of oil and 96.01 MMcf of gas, representing an increase of 13.6% from 1,583,540 barrels in the year-ago period and an increase of 131.2% from the 41.53 MMcf of gas.
"The findings of this independent reserve report by Forrest A. Garb & Associates underscore the success of our ongoing acquisition and drilling program," said James Cerna, Chief Executive Officer and Chairman of Lucas Energy, Inc. "We are happy to report that Lucas Energy was able to not only replace reserves, but grow them while increasing production throughout the year. Our strategy to acquire the right properties and exploit oil assets through a unique and proprietary approach to increasing production yield continues to drive our growth. With the continuing escalation in oil prices and unabated demand, we are positioned to deliver significant financial performance to the benefit of our shareholders."
The prices used in this report are the spot prices in effect on the last trading day in March 2008 as specified by the Securities and Exchange Commission (SEC). Oil prices are based on the Flint Hills post West Texas Intermediate price of $101.89 per barrel (bbl). Included in Lucas' contract with their oil purchaser is a $2.10 per bbl premium which was added for a total oil price of $103.99 per bbl. Natural gas was priced at $6.44 per Mcf.
About Lucas Energy, Inc.
Lucas Energy, Inc. (AMEX:LEI) is an independent crude oil and gas company building a diversified portfolio of valuable oil and gas assets in the United States. The company is focused on identifying underperforming oil and gas assets, which are revitalized through a meticulous process of evaluation, application of modern well technology, and stringent management controls. This process allows the company to increase its reserve base and cash flow while significantly reducing the risk of traditional exploration projects. The Company's headquarters are located at 3000 Richmond Avenue, Suite 400, Houston, Texas 77098.
The Lucas Energy logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4192
Forward-Looking Statements
This Press Release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. A statement identified by the words "expects," "projects," "plans," "feels," "anticipates" and certain of the other foregoing statements may be deemed "forward-looking statements." Although Lucas Energy 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 press release. These include risks inherent in the drilling of oil and natural gas wells, including risks of fire, explosion, blowout, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks inherent in oil and natural gas drilling and production activities, 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; risks with respect to oil and natural gas prices, a material decline in which could cause the Company to delay or suspend planned drilling operations or reduce production levels; and 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 oil and gas prices and other risk factors.