Houston-based Lucas Energy announced in March 2014 that it will farm out ~400 Eagle Ford acres to a private independent operator in exchange for $1-million. The acreage is located on the company's Karnes County leasehold.
Lucas held back on Eagle Ford development in 2013 as it went through a restructuring process. In 2014, company officials indicate the focus has shifted to development.
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“This agreement demonstrates our previously-announced strategy to develop our Eagle Ford reserves in South Texas,” said Anthony Schnur, CEO of Lucas Energy. “The final terms and conditions are currently being negotiated and are subject to the final signed joint operating agreement. Once finalized, we hope to commence drilling by the end of the calendar 2014 second quarter. Also, in anticipation of increased drilling activity in the Eagle Ford, the Company sold out of the recently-announced 8% participation proposal in Madison County, and received $156,000 for our interests.”
Lucas Terms of Eagle Ford Farm Out Agreement
The operator (farmee) will drill an initial horizontal well in exchange for a 75% working interest. Lucas (farmor) will retain a 25-percent carried working interest, under which the operator will bear 100-percent of the drilling costs, estimated at $2-million. In the remaining acreage, Lucas will retain a 75-percent working interest and the operator will have a 25-percent working interest.
Read more at LucasEnergy.com