HOUSTON, Feb. 7, 2008 (PRIME NEWSWIRE) -- Lucas Energy, Inc. (OTCBB:LCAE), a U.S.-based independent oil and gas company, today announced financial results for the third fiscal quarter and nine months for the period ended December 31, 2007. Share count and all per share information has been adjusted to reflect the 1-for-4 reverse stock split which was effected on February 4, 2008, subsequent to the end of the third quarter.
Highlights
* Cash flow, as measured by EBITDA* for the third quarter, increased 7% to $364,023, or $0.04 per share. * Announced an initial production rate for the Hagen Ranch No. 3 well southwest of Gonzales, Texas, of 163 BOPD and 125 MCF per day. * Successfully completed the drilling of a new lateral from the Perkins Oil Unit No.1 well, Pilgrim (Austin Chalk) Field, Gonzales County, Texas. The initial production was reported to the state as 73 BOPD, 3 BWPD, and 30 MCF per day. * Reported the results of an independent study of the Company's oil and gas reserves performed by Forrest A. Garb and Associates, Inc., an independent licensed petroleum engineering firm based in Dallas. The report estimates the undiscounted future net revenue (FNR) from these reserves at $92,674,580, or a discounted PV-10 of $54,555,200, which is commonly known as the SEC PV-10 figure. This equates to $5.34 per share in discounted (PV-10) Proved Reserves. The reserve report is based on interests owned by Lucas Energy, Inc. in certain oil and gas properties located in Gonzales, Baylor, Karnes, and Wilson counties, Texas. * Acquired the Cone-Dubose Unit No.1 well, Christian (6800) Field, Gonzales County, Texas. The new 300 acre property offsets its Hagen Ranch No.3 well to the southwest and is part of the Company's plan to extensively develop the area. The Cone-Dubose Unit No.1 well was acquired from an independent operator in the area and is currently shut in. * Subsequent to the end of the quarter, the Company announced a 1- for-4 reverse split of its Common Stock that took effect with the start of trading on February 4, 2008. The reverse split was done in order to meet listing requirements for the AMEX. The Company has made application to the AMEX and meets all of the listing requirements except for stock price. After giving effect to the reverse split, the Company had 10,211,156 million shares of Common stock outstanding.
Total revenues for the three months ended December 31, 2007 were up 104.6% to $811,023 compared to $396,367 in the year-ago period. For the nine months ended December 31, 2007, total revenues were up 85% to $1,747,510 compared to $944,788 in the year ago period. Oil and gas revenues increased during the period due to additional wells put on line through the ongoing acquisition and rework program and from the addition of new laterals drilled during the quarter. The company produced 9,093 bbls of oil and 584 mcf natural gas net to the company in the quarter, compared to 7,045 bbls and nil in the prior year's period, and realized average prices of $88.89 per barrel and $5.08 per cubic square foot of gas, compared to $56.27 per barrel last year (there were no gas revenues in last year's same period).
James J. Cerna, Chief Executive Officer of Lucas Energy, stated, "Our third fiscal quarter was productive from both an operational and financial perspective, and we are pleased to be able to announce our eleventh consecutive quarter of profitability and cash generation. Our drilling program, focused on substantially increasing the production from our portfolio of properties, has proven to be highly successful and continues to deliver cash flow for our investors. Three out of 10 of the wells in our program are currently producing and we are getting ready to begin drilling a fourth well. Our focus remains on operating efficiently and profitably, and it is our objective to continue to acquire assets with proven reserves to increase our cash flow, while simultaneously executing a low risk drilling strategy."
For the three months ended December 31, 2007, total operating expenses were $589,879 compared to total operating expenses of $108,854 in the prior year's period. For the nine months ended December 31, 2007, total operating expenses were $1,357,103 compared to total operating expenses of $423,136 in the prior year's period. Operating income was $221,144, for the quarter compared to operating income of $287,513, in last year's period. Operating income for the nine-month period was $390,406 compared to operating income of $521,652 in last year's period. The increases in SG&A and LOE were primarily driven by increased upfront costs for drilling operations, increased costs for field engineers, information technology services, and administrative personnel as well as increased public company costs in this year's period.
Cash flow, as measured by EBITDA* for the third quarter, increased 7% to $364,023, or $0.04 per basic and diluted share (based on 10,211,156 basic and diluted shares) from $340,363, or $0.05 per basic and diluted share (based on 6,885,250 basic and diluted shares). The increase was driven by the higher revenue realized in the quarter due to higher commodity prices and increased production in the quarter.
* In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Lucas Energy uses non-GAAP measures of operating income (loss), net income (loss) and income (loss) per share, which are adjustments from results based on GAAP to exclude Depreciation and Amortization, and other non-cash items as reconciled in the financial statements below. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors.)
Net income for the third quarter, ended December 31, 2007 was $179,906, up 8.1% from net income of $166,467 for the three months ended December 31, 2006. The increase in income for the period is attributable to the increase in revenues. For the nine months ended December 31, 2007, net income was $267,168 compared to $349,938 for the nine months ended December 31, 2006. Basic and diluted earnings per share for the three months ended December 31, 2007 were $0.01 compared to basic and diluted earnings per share of $0.02 for the three months ended December 31, 2006. Basic and diluted earnings per share for the nine months ended December 31, 2007 were $0.03 compared to basic and diluted earnings per share of $0.05 for the nine months ended December 31, 2006. The decrease in net income for the nine months was attributed to higher professional fees, headcount and public company costs.
At December 31, 2007, the Company had $3.3 million in cash and marketable securities and working capital of $2,276,867. This compares to cash of $710,018 and working capital of $473,556 at March 31, 2007. Total shareholder equity increased to $19,099,664 and total assets increased to $21,119,111. Lucas has no debt.
Mr. Cerna concluded, "Beyond the success we've had in our exploration and drilling initiatives, we are also excited about our upcoming move to the American Stock Exchange. We expect this move will provide greater awareness and visibility for the Company to both institutional and retail investors and will provide broader access to, and lower cost of, capital if needed, all of which results from the greater depth of market the AMEX has to offer."
About Lucas Energy, Inc.
Lucas Energy, Inc. (OTCBB:LCAE) 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 Statement
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. The complete filing is available at http://www.sec.gov
Lucas Energy, Inc.
Consolidated Statements of Operations and Comprehensive Income
For the Three and Nine Months Ended December 31, 2007 and 2006
(Unaudited)
For For For For
the Three the Three the Nine the Nine
Months Months Months Months
Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2007 2006 2007 2006
REVENUES
Oil and gas
revenues $ 811,023 $ 396,367 $ 1,737,510 $ 910,788
Other revenues -- -- 10,000 34,000
----------- ----------- ----------- -----------
Total Revenues 811,023 396,367 1,747,510 944,788
EXPENSES
Lease operating
expenses 245,179 16,465 552,320 185,926
Depreciation,
depletion and
accretion 90,960 48,663 198,034 111,820
General and
administrative 253,740 43,726 606,749 125,390
----------- ----------- ----------- -----------
Total Expenses 589,879 108,854 1,357,103 423,136
----------- ----------- ----------- -----------
INCOME FROM
OPERATIONS 221,144 287,513 390,406 521,652
----------- ----------- ----------- -----------
OTHER INCOME
(EXPENSES)
Gain on sale of
assets -- -- -- 81,534
Interest income 51,919 4,187 118,045 8,347
Interest expense -- (84,060) (101,877) (139,236)
----------- ----------- ----------- -----------
Total Other
Income (Expenses) 51,919 (79,873) 16,168 (49,355)
----------- ----------- ----------- -----------
NET INCOME BEFORE
INCOME TAXES 273,063 207,640 406,574 472,297
INCOME TAX EXPENSE 93,157 41,173 139,406 122,359
----------- ----------- ----------- -----------
NET INCOME $ 179,906 $ 166,467 $ 267,168 $ 349,938
=========== =========== =========== ===========
OTHER COMPREHENSIVE
INCOME (LOSS) (49,000) -- 24,000 --
----------- ----------- ----------- -----------
COMPREHENSIVE INCOME $ 130,906 $ 166,467 $ 291,157 $ 349,938
=========== =========== =========== ===========
INCOME PER SHARE -
BASIC AND DILUTED $ 0.01 $ 0.02 $ 0.03 $ 0.05
=========== =========== =========== ===========
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING - BASIC
AND DILUTED 10,211,156 6,885,850 9,007,615 6,859,420
=========== =========== =========== ===========
Lucas Energy, Inc.
Consolidated Balance Sheets
(Unaudited)
Dec. 31, March 31,
2007 2007
------------ ------------
CURRENT ASSETS
Cash $ 2,771,990 $ 710,018
Marketable securities 517,850 --
Oil and gas receivables 296,835 131,485
Note receivable 32,000 32,000
Other current assets 272,293 38,823
------------ ------------
TOTAL CURRENT ASSETS 3,890,968 912,326
------------ ------------
OIL AND GAS PROPERTIES, FULL COST METHOD
Properties subject to amortization 16,845,902 9,623,745
Accumulated depletion (351,723) (166,204)
------------ ------------
OIL AND GAS PROPERTIES, NET 16,494,179 9,457,541
------------ ------------
FIXED ASSETS, net of accumulated
depreciation of $145 and $0,
respectively 2,473 --
OTHER ASSETS
Drilling deposits, bonds, and prepaid
expenses 317,025 56,123
Note receivable 414,466 --
------------ ------------
TOTAL ASSETS $ 21,119,111 $ 10,425,990
============ ============
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 1,614,101 $ 386,004
Accrued interest payable -- 52,766
------------ ------------
TOTAL CURRENT LIABILITIES 1,614,101 438,770
------------ ------------
NON-CURRENT LIABILITIES
Note payable -- 2,300,000
Asset retirement obligation 133,755 111,022
Deferred tax liabilities 271,591 132,185
------------ ------------
TOTAL LIABILITIES 2,019,447 2,981,977
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, 10,000,000 shares
authorized of $0.001 par value, no
shares issued and outstanding -- --
Common stock, 25,000,000 shares
authorized of $0.001 par value
10,211,156 and 7,448,107 shares issued
and outstanding, respectively 10,211 7,448
Additional paid-in capital 18,413,841 7,052,121
Retained earnings 651,612 384,444
Unrealized gain on marketable equity
securities 24,000 --
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 19,099,664 7,444,013
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 21,119,111 $ 10,425,990
============ ============
EBITDA RECONCILIATION TABLE
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Three Three Nine Nine
months months months months
ended ended ended ended
12/31/07 12/31/06 12/31/07 12/31/06
---------------------------------------------------------------------
GAAP Net Income 179,906 166,467 267,168 349,938
---------------------------------------------------------------------
Interest Expense 0 84,060 101,877 139,236
---------------------------------------------------------------------
Taxes 93,157 41,173 139,406 122,359
---------------------------------------------------------------------
D,D, &A 90,960 48,663 198,034 111,820
---------------------------------------------------------------------
EBITDA 364,023 340,363 712,485 723,353
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EBITDA/Basic and
Diluted Share $0.04 $0.05 $0.08 $0.11
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Oil and Gas Production
---------------------------------------------------------------------
For the three For the three
months ended months ended Increase/
Dec. 31, 2007 Dec. 31, 2006 (Decrease)
---------------------------------------------------------------------
---------------------------------------------------------------------
Volumes: (net)
---------------------------------------------------------------------
Oil (bbls) 9,093 7,045 2,039
---------------------------------------------------------------------
Gas (mcf) 584 -- 584
---------------------------------------------------------------------
---------------------------------------------------------------------
Average price
received:
---------------------------------------------------------------------
Oil $ 88.89 $ 56.27 $ 32.62
---------------------------------------------------------------------
Gas $ 5.08 --
---------------------------------------------------------------------
---------------------------------------------------------------------
Revenues:
---------------------------------------------------------------------
Oil $808,238 $396,367 $411,871
---------------------------------------------------------------------
Gas $ 2,785 $ 0 $ 2,785
---------------------------------------------------------------------
Total $811,023 $396,367 $414,656
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