Lucas reaches settlement with Victory, completes sale of acreage in Texas

Lucas Energy Inc. (NYSE MKT: LEI) has entered into a settlement agreement and mutual release with Victory Energy Corp. As part of the settlement, Lucas will transfer certain properties to Victory including a 3.27581% leasehold working interest (WI) in the Dingo Unit and a 1.481330% leasehold WI in the Platypus Unit; and Victory will assign two Karnes County wellbores (the Boggs Unit No. 1H and the Boggs Unit No. 2H) to Earthstone Energy/Oak Valley Resources.

Regarding the pre-merger funding agreements and amounts paid by Victory, the settlement includes the return of a net of an aggregate of $54,020 in pre-drilling costs from Oak Valley Resources to be paid to Lucas and, finally, the forgiveness by Victory of debt Lucas owed in the amount of $600,000 in consideration for the issuance by Lucas of 1.1 million shares of common stock. A concurrent settlement agreement between Lucas, Victory, and Oak Valley Resources has also been entered into.

All parties have agreed to a mutual release of all claims under the settlement agreement, including counterclaims, legal actions, contract obligations, suits, losses, and any or all other obligations except in the event of a dispute or breach by Lucas or Victory arising from certain actions or omissions with regard to the agreement.

In a separate transaction with Earthstone and its affiliate, Oak Valley Resources, Lucas has sold 139.04 net acres of oil and gas properties located in Karnes County, Texas, while retaining the right to participate in future operations for up to 20% of an 8/8ths interest. The total consideration paid for the property was approximately $350,000.

"With our entry into these settlements, we can once again concentrate our efforts toward moving the company forward," said Lucas CEO Anthony C. Schnur. "To that end, we are pursuing opportunities where ready capital is available, whether that is from professional investment funds or potential business combination partners."

 

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