Lucas Increases Potential Reserves Estimate at Eagle Ford
Lucas 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. (Garb) 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. Garb's report as of April 1, 2010 estimated 2.7 million barrels of oil equivalent (BOE) of potential reserves, whereas Lucas' internal report, as of September 30, 2010, had an estimated 4.3 million BOE of potential reserves.
William A. Sawyer, President and CEO of Lucas Energy, said, "Lucas sees much greater potential reserves from the oil window of the Eagle Ford formation than previously recognized by industry reserve engineers. Our research and internal calculations of potential reserves and PV10 values are much higher than in April, which results in a revised net asset value for Lucas of approximately $6 per share currently."
The reason for the management update is based on the following major changes in key assumptions that have occurred since April 1, 2010: (a) Lucas collected data from 151 Eagle Ford wells in its area of activity, which averages 394,000 BOE of recoverable reserves from each lateral well bore versus the 150,000 BOE assumed by third party reserve engineers in April; (b) the number of lateral well bores with Eagle Ford potential owned by Lucas has increased from 10 wells at April 1, 2010 to 51 wells at September 30, 2010; and (c) the oil prices assumed at the time of the Garb report were assumed to average $67.48 per barrel versus the $73.19 per barrel average at September 30, 2010.
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