Houston-based Lucas Energy Inc. has signed a joint venture agreement to develop its Eagle Ford Karnes County acreage with Oak Valley Resources, LLC.
Lucas, which is in financial trouble, recently received an extension from the New York Stock Exchange (NYSE) through October to avoid delisting. Lucas management indicates the joint venture meets the company's objective to focus on Eagle Ford drilling and development, therefore maximizing production and cash flow.
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“We are pleased to finalize this joint venture agreement with a respected and experienced independent operator to begin to develop our Eagle Ford reserves in south Texas. Our objective is to continue to focus on drilling our most valuable asset, our Eagle Ford shale acreage, in order to maximize production and grow cash flow. We will continue to seek appropriate opportunities to work with Oak Valley Resources on future drilling projects.”
At closing, Lucas will receive $444,000 for a 50% working interest on approximately 400 acres. Oak Valley will manage the drilling of the wells and each company will bear 50% of the drilling and completion costs. Once the wells are on production and initial oil sales begin, all revenues and operating costs will also be split between the parties on a 50%-50% basis. The first well is expected to be spudded no later than December 2014. The joint venture expects to drill a minimum of four wells on the property.
Read more at lucasenergy.com