Lucas Energy Announces $12 Million Private Placement of Restricted Common Stock and Warrants


Lucas Energy, Inc. (OTCBB:LUCE), a U.S. based independent oil and gas company, today announced it has received $12 million in subscriptions to purchase restricted shares of the Company's common stock at a price of $1.15 per share and warrants to purchase common stock at a price of $2.00 per share. As of July 20, 2007, the Company has cleared funds for the purchase of 6,956,522 shares of restricted, common stock from 25 investors. The Company received total net proceeds of $7,280,000 from these share sales. The Company has issued those shares and has also issued 6,956,522 warrants to purchase shares of common stock to those investors. Upon receipt of the remaining $4 million, the Company will issue the corresponding numbers of shares and warrants to the investors. Both the stock and warrants issued are restricted from sale for a period of at least one year under Rule 144.

"The Company intends to use the proceeds from the transaction to immediately begin a well defined program of drilling laterals in its existing well locations that the company acquired over the last two years, to eliminate all of its outstanding indebtedness, and, possibly, for acquiring attractive existing oil and gas properties," said James Cerna, Jr., CEO of Lucas Energy Inc.

"This funding is a very significant milestone for Lucas Energy. The additional funding allows us to dramatically and aggressively drive the Company into our second and most attractive phase of development. Over the last two years, Lucas has been able to acquire 43 leases totaling over 10,000 acres with more than $36 mil in PV-10 reserves. This funding is the catalyst for us to magnify the value of those acquisitions, and drive our cash flow to attractive, record new levels. Lucas has an unusual expertise in acquiring and developing underutilized properties, and this funding will clearly allow us to showcase the Company's value and dramatic growth potential over the next 2 to 4 quarters. We are very pleased with the quality and number of institutional investors in this funding. Diversifying and broadening the number of large experienced energy investors supporting our activities was one of our goals."

JMP Securities LLC and Viewpoint Securities LLC were joint lead placement agents of the offering.

Any brokers involved in the sales of these shares received a cash commission equal to 9% of the amount raised and warrants to purchase shares of restricted common stock equal to 9% of the number of shares sold by that broker. Therefore, the Company issued an additional 626,087 warrants to purchase shares of restricted common stock and $720,000 as commissions to the brokers. . The brokers also received 626,087 warrants to purchase shares of common stock at a price of $2.00 per share. The shares were sold to accredited investors under the auspices of Rule 506 of Regulation D.

The shares of common stock issued in the private placement have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This communication shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

LUCAS ENERGY, Inc. (OTCBB: LUCE - News; is an independent crude oil and gas company building a diversified portfolio of valuable oil and gas assets in the United States. The company is focused on identifying underperforming oil and gas assets, which are revitalized through a meticulous process of evaluation, application of modern well technology, and stringent management controls. This process allows the company to increase its reserve base and cash flow while significantly reducing the risk of traditional exploration projects. The Company's headquarters are located at 3000 Richmond Avenue, Suite 400, Houston, Texas 77098.

The statements in this press release regarding any implied or perceived benefits from existing of oil and gas field properties, actual reserves and revenues to be derived from the reserves, plans to drill additional oil and gas wells, anticipated revenues, the acquisition of additional oil or gas leases, maintaining mineral lease rights, and any other effects resulting from any of the above are forward-looking statements. Such statements involve risks and uncertainties, including, but not limited to, the continued production of gas at historical rates, costs of operations, delays, and any other difficulties related to producing minerals such as oil or gas, continued maintenance of the oil field and properties, price of oil or gas, marketing and sales of produced minerals, risks and effects of legal and administrative proceedings and governmental regulation, future financial and operational results, competition, general economic conditions, and the ability to manage and continue growth.

The reserve values stated in the March 31, 2007 report are estimates and should not be interpreted as being exact quantities. They may or may not be actually recovered and the revenues stated in the report may be more or less than what will ultimately be recovered. While the reserve estimates presented in the report were believed reasonable at March 31, 2007, several factors may lead to a future revision of the reserve estimates presented in the report, including general economics, the Company's operations and reservoir performance.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include market conditions and those set forth in reports or documents we file from time to time with the SEC. We undertake no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

This Press Release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. A statement identified by the words "expects," "projects," "plans," "feels," "anticipates" and certain of the other foregoing statements may be deemed "forward-looking statements." Although Lucas Energy believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this press release. These include risks inherent in the drilling of oil and natural gas wells, including risks of fire, explosion, blowout, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks inherent in oil and natural gas drilling and production activities, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of drilling operations; risks with respect to oil and natural gas prices, a material decline in which could cause the Company to delay or suspend planned drilling operations or reduce production levels; and risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in oil and gas prices and other risk factors.

Source: Lucas Energy, Inc.