Lucas Energy Inc. (AMEX: LEI) shares are continuing to rally in today�s trading as oil prices soar. Lucas Energy stock is currently trading at $4.33, up 35.67% from its previous close. Lucas Energy shares touched the high of $4.43 and lowest price in today�s session is $3.63. In the last three trading sessions Lucas Energy shares gained more than 100%.
Lucas Energy recently closed its previously announced $6 million financing, to a select group of institutions and Hall Phoenix Inwood, an affiliate of Hall Phoenix Energy. The company agreed to raise almost $6 million from the sale of about 2.5 million units in a registered direct offering at a price of $2.38 per unit.
Also, the company completed and tested the Hilcorp Energy Company operated Hagen EF No.2H Eagle Ford horizontal well. The well will be put on production, flowing, to recover oil and a portion of the load water. The well may be put on artificial lift after few weeks. The company expects that the well will meet, or exceed, its expectations of a 500 BOPD IP (initial test potential) and will increase the company’s net production, cash flow from producing wells, and net proved producing reserves significantly. The company has a 15% carried working interest in the two Hilcorp operated Hagen EF wells. If the two wells perform as anticipated, then the company�s net production will increase by approximately 150 BOPD before payment of royalty.
The company also entered into a letter of intent that provides rights to buy up to a 77.5% interest in, and operatorship of, the Hospah field from a private company for an aggregate of $20.5 million. The company funded the purchase of an undivided 7.56% interest in the property for $2 million, and plans to purchase the balance of the interests, subject to funding. The acquisition includes six shallow producing units and more than 100 existing well bores drilled to the Hospah oil and Dakota gas formations in McKinley County, New Mexico. The production averaged approximately 100 barrels per day of light sweet crude in 2010. The company expects that daily production can be increased to 500 barrels of oil and 2 million cubic feet of gas in the first year at a capital cost under $9 million. The development plan covers deepening certain wells and using them to re-inject formation water into non-producing zones, putting existing wells back on production, and by removing carbon dioxide from the natural gas to bring it up to pipeline quality.
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