HOUSTON, Nov. 14, 2016 /PRNewswire/ -- Lucas Energy,
Inc. (NYSE MKT: LEI) ("Lucas" or
the "Company"), an independent oil and gas company with its
operations in Texas and
Oklahoma, today announced its
fiscal 2017 second quarter results for the period ending
September 30, 2016.
"The fiscal 2017 second quarter was transformational for Lucas
Energy with the August closing of the Segundo transaction that
expanded our operating and exploration activities to the
Mid-Continent area and the Permian Basin," said Anthony C. Schnur, Chief Executive Officer of
Lucas Energy. "The acquired assets include working interests
in producing properties and undeveloped acreage in Texas and Oklahoma, which are currently producing over
1,000 net barrels of equivalent (BOE) oil. The quarter
benefited from approximately thirty days of incremental revenues
and production related to the Segundo transaction. However,
two significant non-recurring items directly related to the closing
of that transaction impacted our reported financial results.
In the upcoming quarters, we do not expect to incur additional
transaction-related expenses.
"The acquisition of these assets significantly increases our
overall production and was representative of our strategic
objective to build a platform for growth through the development of
long-lived reserves with numerous drilling opportunities. We
have initially targeted 40 drilling locations in the Hunton
formation and plan to selectively develop these locations over the
next two years, paying particular attention to leasehold acreage
expirations. During the current quarter, Lucas participated in the drilling of two new
wells in south Gonzales County in
the Eagle Ford shale which were drilled and completed at an average
cost per well that was 10% below budget and 57% below 2014 drilling
costs. We intend to further develop our Eagle Ford and Austin
Chalk assets using technologies adopted by leading operators in the
area that have been able to significantly reduced per unit drilling
and completion costs over time.
"We believe our assets serve as the foundation on which to grow
the Company, and we plan to take advantage of the prevailing weak
oil and gas industry conditions to pursue attractively-priced
acquisitions and expand our exploration acreage at relatively
shallow depths located near or in the same regions as our current
assets. We will work diligently to consider properties that
offer attractive production and cash flow returns, while improving
the production rates of our recently acquired and existing
assets. We anticipate being able to ramp-up production early
next calendar year, which should result in improved revenue and
cash flow. As we execute on our aggressive acquisition-driven
growth strategy, we plan to create a company capable of delivering
long-term sustainable shareholder value."
Fiscal 2017 Second Quarter Results
Impacting fiscal 2017 second quarter results, for the period
ending September 30, 2016, were two
significant one-time items related to the Segundo transaction, the
largest of which was the recording of a non-cash impairment charge
of $49.0 million, as required by GAAP
accounting, as an adjustment to the purchase price paid for the
acquired assets related to the difference between our stock price
when the assets were initially contemplated and the transaction
closing date. Specifically, on December 30, 2015, the closing price was
$1.65 per share, compared to
$3.78 per share on August 25, 2016. In accordance with GAAP
accounting principles, this resulted in an increase in the value of
stock consideration paid by Lucas
relative to the agreed upon price for the acquisition of the assets
and represents a non-cash item.
The second significant special item impacting the fiscal 2017
second quarter results was approximately $0.5 million of additional expenses related to
professional fees incurred with the financing of the Segundo
transaction, which was recorded in General and Administrative
(G&A) expenses. Adjusted for the non-cash impairment
charge and the one-time G&A expense, Lucas reported a net loss of $1.3 million or a loss of ($0.20) per share in the three months ending
September 30, 2016 compared to a net
loss of $0.96 million or loss of
($0.66) per share in the three months
ending September 30, 2015.
On a reported basis, including the above-noted special items,
for the three months ending September 30,
2016, Lucas reported a net
loss of $50.8 million, or a loss of
($7.74) per share.
Total revenues from the sale of crude oil, natural gas and
natural gas liquids for the fiscal 2017 second quarter increased by
208% to $0.9 million compared to
$0.29 million in the same period a
year ago largely reflecting the inclusion of natural gas and
liquids production which added approximately $0.4 million to revenues. During the fiscal
2017 second quarter, Lucas
produced an average of approximately 372 net BOE per day from 100
active well bores compared to 72 BOE per day in the fiscal 2016
second quarter. The average daily production rate reflected
only thirty days of acquired production blended with Lucas' existing production. Total
production in the quarter was 34,260 BOE, net, compared to 6,620
BOE in the same period last year. The Company commenced a
maintenance and upgrade program in October
2016 that was budgeted at $0.5
million, including the repair and/or replacement of
down-hole pumps in addition to mechanical repairs in Oklahoma, and maintenance operations to
certain existing wells in Texas. Lucas expects to continue maintenance
operations as it reviews new drilling locations in its core areas
of operation.
Lease operating expenses of $0.5
million for the fiscal 2017 second quarter, ending
September 30, 2016, increased by
approximately $0.25 million from
$0.25 million for the same period a
year ago, principally reflecting the acquisition of working
interests in various properties in Texas and Oklahoma related to the Segundo transaction
that closed in August 2016.
Total G&A expenses increased by 66% or by approximately
$0.4 million in the fiscal 2017
second quarter to $1.0 million
compared to the prior year's second quarter primarily related to
transaction costs associated with the Segundo acquisition, as noted
above, partially offset by a decrease in the awarding of employee
stock-based options and compensation.
Depreciation, depletion, amortization and accretion (DD&A)
expense increased by approximately $0.3
million related to a 27,640 BOE increase in production,
attributable to our newly acquired working interests in various
producing properties.
SELECTED FINANCIAL
DATA
|
|
|
|
Three Months
Ending 09/30/2016
|
|
|
|
INCOME
STATEMENT
|
09/30/2016
|
|
09/30/2015
|
Net Operating
Revenues
|
$894,513
|
|
$289,974
|
Operating
Expenses
|
|
|
|
Lease
Operating Expense
|
500,328
|
|
252,759
|
G&A
|
1,041,652
|
|
628,998
|
DD&A &
Other Operating Expenses
|
574,485
|
|
292,822
|
Impairment of
Oil & Gas Properties
|
48,990,520
|
|
0
|
Total Operating Expense
|
51,106,985
|
|
1,174,579
|
|
|
|
|
Interest Expense
& Other
|
(592,805)
|
|
(68,086)
|
|
|
|
|
Net Loss,
reported
|
($50,805,277)
|
|
($952,691)
|
Adjusted Net Loss,
excluding special items
|
($1,322,757)
|
|
($952,691)
|
|
|
|
|
The Company's Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2016 will
be filed with the Securities and Exchange Commission reflecting
these results later today.
About Lucas Energy, Inc.
Based in Houston, Texas, Lucas
Energy (NYSE MKT: LEI) is a growth-oriented, independent oil and
gas company engaged in the development of crude oil and natural gas
in the Austin Chalk and Eagle Ford formations in south Texas, the Permian Basin in west Texas, and the Hunton formation in central
Oklahoma. For more
information, please visit www.lucasenergy.com.
Safe Harbor Statement and Disclaimer
This news release includes "forward looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward looking statements give our current
expectations, opinions, belief or forecasts of future events and
performance. A statement identified by the use of forward
looking words including "may," "expects," "projects,"
"anticipates," "plans," "believes," "estimate," "should," and
certain of the other foregoing statements may be deemed
forward-looking statements. Although Lucas 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 news release. These include
risks inherent in natural gas and oil drilling and production
activities, including risks of fire, explosion, blowouts, pipe
failure, casing collapse, unusual or unexpected formation
pressures, environmental hazards, and other operating and
production risks, 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; delays in receipt of drilling
permits; risks with respect to natural gas and oil prices, a
material decline which could cause Lucas to delay or suspend planned drilling
operations or reduce production levels; 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 natural gas and oil prices; risks relating to
unexpected adverse developments in the status of properties; risks
relating to the absence or delay in receipt of government approvals
or fourth party consents; and other risks described in Lucas's Annual Report on Form 10-K and other
filings with the SEC, available at the SEC's website at
www.sec.gov. Investors are cautioned that any forward-looking
statements are not guarantees of future performance and actual
results or developments may differ materially from those projected.
The forward-looking statements in this press release are made as of
the date hereof. The Company takes no obligation to update or
correct its own forward-looking statements, except as required by
law, or those prepared by third parties that are not paid for by
the Company. The Company's SEC filings are available on our website
or at http://www.sec.gov.
Contacts:
|
Carol Coale / Ken
Dennard
|
|
Dennard - Lascar
Associates LLC
|
|
(713)
529-6600
|
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SOURCE Lucas Energy, Inc.