Lucas Energy Inc. (NYSE MKT: LEI) has entered into a Lease Acquisition and Participation Agreement with a privately-held, Houston, Texas-based oil and gas holding company to acquire a leasehold position in the Permian Basin in Texas.
Under the Agreement, Lucas Energy will purchase the initial lease comprised of 16,322 gross, 3,630 net, mineral acres, and the parties have agreed to form an area of mutual interest (the "AMI") on the Central Basin Platform of the Permian Basin covering approximately twenty thousand (20,000) net mineral acres.
This transaction represents the opening of a new core area where the company will operate the properties and own a 90% working interest and the partner will hold a 10% working interest in the initial leases and all subsequently acquired leases. The initial cash consideration paid by Lucas Energy is $1.43 million, in exchange for access to the Partner's regional, technical database and the company's 90% interest in the initial leases. Over $1.1 million of this amount is being deferred until on or before January 31, 2017, pending title approval. As additional leases are acquired under the AMI, the company will pay the partner its lease acquisition costs and grant an incentive overriding royalty interest. Upon meeting certain acreage acquisition goals based on size and location of the properties, Lucas Energy will also issue to the partner 200,000 unregistered shares of its common stock and pay the partner an acreage fee based on the total leasehold and brokerage costs.
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.