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To: Madharry who wrote (44037)	8/22/2011 12:05:33 PM
From: E_K_S	Read Replies (1) \| Respond to of 78476

Hi Madharry - When LEI announced their JV with HilCorp in July 2010, they gave up 85% of their interest in their leases for $8.9 million in cash. This cash inflow should support their drilling operations for another year (maybe). Lucas Energy Closes Part II of Eagle Ford Shale Joint Venture Monday, July 05, 2010 From the article:...Lucas Energy, Inc., an independent oil and gas company based in Houston, Texas, announces that the Company has closed the second part of its Eagle Ford joint venture with Hilcorp Energy I, L.P., an affiliate of Hilcorp Energy Company, one of the largest privately owned oil and gas companies in the United States. Hilcorp Energy I, L.P. has acquired interests in additional leases in the Company's Eagle Ford acreage in Gonzales County, Texas. Additional Eagle Ford properties will be part of a third closing that is expected to take place by the end of July. To date, Lucas has received $8.9 million for an 85% working interest in approximately 10,500 acres in Gonzales County, Texas...." They did two other JV in 2011 (1) Seidler Oil & Gas, LP on 4/2011 and (2) Marathon Oil (East Texas) LP, a subsidiary of Marathon Oil Corporation (NYSE: MRO) on 4/2011. Both of these are 50% deals and they received some cash but not as much as in the HilCorp deal. Cash reserves will be tight going forward. -------------------------------------------------------------------------------------------------------------- They have to pay for their proportion of expenses in their JV deals (15% w/ HillCorp & 50% w/ Marathon) as well as 100% for their company owned operations. Hopefully, the added BOPD production from 2011/2012 will generate the necessary cash flow to operate their company owned wells and have enough left over to complete one or two additional wells each year. It cost about $3M to complete a retrofit fracking well which is primarily their expertise. They take old non producing wells and use the new fracking technology to make them productive again. It's still a speculation. EKS