Lucas Energy Inc., Houston, has agreed to partner with a private Houston-based oil and gas holding company in the Permian basin of Texas, and will change its name to Camber Energy Inc. to reflect the firm's new operational focus.
Under Lucas Energy's lease acquisition and participation agreement with the privately held company, Lucas Energy will purchase the initial lease comprised of 16,322 gross, 3,630 net mineral acres, and the firms will form an area of mutual interest (AMI) on the Central Basin Platform covering 20,000 net mineral acres.
Lucas Energy will operate the properties and own 90% working interest and the partner will hold 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 its 90% interest in the initial leases.
In the Central Basin Platform, Lucas Energy notes the San Andres is found at relatively shallow depths and has similar attributes to the firm's dewatering Hunton play in Oklahoma. The firm believes it has certain advantages in initiating a development program in the San Andres.
Both the Hunton and San Andres are highly water-saturated carbonates where the production profile appears to be optimized by a dewatering process that slowly depressurizes the formation allowing fuller depletion of the reservoir.
Lucas Energy says it will transfer its more than 20-year technical knowledge of the Hunton to its development and production of the San Andres. To date, the horizontal development of the San Andres has been largely dominated by private exploration and production companies, many of which are backed by leading private equity firms, Lucas Energy notes.
Multiple acreage targets in the AMI have already been mutually identified, and the new partners plan to secure additional leases over the term of the agreement. Drilling is expected to commence upon the acquisition of additional acreage and is anticipated to occur in this year's second half.
Lucas Energy says its name change, effective Jan. 5, reflects the strategic shift from its Austin Chalk and Eagle Ford roots to the addition of shallow oil and gas reserves with longer-lived, lower-risk production profiles.
The firm also has hired Thomas E. Hardisty as senior vice-president, land and business development; and J. Mark Bunch as senior vice-president, engineering and operations.
Hardisty brings more than 30 years of oil industry experience as a petroleum land management professional, and Bunch is a petroleum engineer with more than 35 years of operational and managerial experience in oil and gas exploration, development, and acquisitions.