Lucas Energy, Inc. has signed a binding participation agreement with Oak Valley Resources, LLC ("OVR"), to jointly develop the Company's Karnes County, Texas acreage in the Eagle Ford shale formation.
At closing Lucas will receive $444,000 for a 50% working interest on approximately 400 acres. OVR will manage the drilling of the wells and each company will bear 50% of the drilling and completion costs. Once the wells are on production and initial oil sales begin, all revenues and operating costs will also be split between the parties on a 50%/50% basis. The first well is expected to be spudded no later than December 2014. The joint venture expects to drill a minimum of four wells on the property.
"We are pleased to finalize this joint venture agreement with a respected and experienced independent operator to begin to develop our Eagle Ford reserves in south Texas. Our objective is to continue to focus on drilling our most valuable asset, our Eagle Ford shale acreage, in order to maximize production and grow cash flow," said Anthony C. Schnur, Chief Executive Officer of Lucas, who continued, "Further we will continue to seek appropriate opportunities to work with OVR on future drilling projects."