Lucas and Lonestar Strike Eagle Ford Deal
Lucas Energy and Lonestar Resources strike a deal to develop joint assets in the Eagle Ford Shale Play.
Related: Lonestar Resources: Focused on Eagle Ford Shale
Lucas Energy announced this week that its wholly-owned subsidiary, CATI Operating, LLC will borrow $1 million to fund drilling, completion and maintenance projects in the Eagle Ford Shale. The company will enter into a joint operating agreement with Lonestar Resources that will cover over 1,450 gross acres. Lucas will have a 8% -14% working interest in the units.
“We are pleased to partner with Lonestar, a known and successful operator in the Eagle Ford, by initially participating in the Cyclone #9H and #10H wells in which CATI has a working interest of 8%,” said Anthony C. Schnur, Chief Executive Officer of Lucas Energy. “This represents another step in the growth and expansion of our assets and our company. It is anticipated that the wells will enhance our reserve portfolio and production in addition to securing the leaseholds of the locations.”
Details of the deal include:
- 80% of all cash flow generated will go to satisfy notes with the lender
- 20% to be used by CATI for lease and other operating expenses and capital expenditures
- Lucas will have a 8% -14% working interest in the units
Throughout the second quarter, Lonestar focused its technical and capital resources on the Eagle Ford Shale and boasts an increase of 23% for oil and gas volumes compared over the first quarter of 2015. The company plans to focus the rest of 2016 on its Eagle Ford assets in Dimmit, LaSalle and Gonzales Counties.