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EnigmaDude (57.15)

Another Volume Story - Lucas Energy



December 03, 2010 – Comments (0) | RELATED TICKERS: LEI

From a press release on 11/29/10:

Lucas Energy, Inc. (NYSE Amex:LEI) an independent oil and gas company based in Houston, Texas, has provided an internal management update based upon its revised Eagle Ford potential reserves (proved and probable) as of September 30, 2010.

The net present value at a 10% discount rate (PV10) of the potential reserves estimated for Lucas by Forrest A. Garb & Associates, Inc. as of April 1, 2010 was $51.9 million. Lucas performed an internal evaluation, as of September 30, 2010, and calculated an $83.6 million PV10 valuation for Lucas potential reserves.

Since then the stock has soared on 1.5 to 2 times the previous 30 days average volume.  Year to date the share price has risen from a low of about $0.50 to today's high of $2.77.

When you consider that the current market cap of this company is approx $37M and the NPV of this Eagle Ford reserve is somewhere in the neighborhood of $80M you can understand the sudden interest.  I initiated a small position today.

Here is some additional food for thought:

Lucas Energy holds oil and gas interests in the Austin Chalk formation, Buda formation and Eagle Ford Shale formation. As of March 31, 2010, Lucas operated 30 wells that produced approximately 190-200 barrels of oil per day (BOPD) gross. During the fiscal year ended March 31, 2010 (fiscal 2010), its oil production sales totaled 27,833 barrel oil equivalent.

The company has no debt and is currently trading for approx 2x book value.

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