Lucas Energy Announces Fiscal 2008 Year-End Results

Reports Record Revenue and Cash Flow

HOUSTON, June 19, 2008 (PRIME NEWSWIRE) -- Lucas Energy, Inc. (AMEX:LEI), a U.S.-based independent oil and gas company, today announced financial results for the fiscal year ended March 31, 2008.

Financial Highlights

  --  Revenue from oil and gas sales increased 136% to $3,070,668
      for the year ending March 31, 2008 from $1,296,084 for the year
      ending March 31, 2007.
  --  Comprehensive net income rose 288% to $1.25 million or $0.13
      per basic share outstanding (based on 9.3 million shares)
      compared to $322,000, or $0.05 per basic share outstanding
      (based on 7.0 million shares).
  --  Cash flow as measured by EBITDAS (a non-GAAP measure)* for the
      full fiscal year increased to $995,767, or $0.11 per basic
      share, compared to $829,982, or $0.09 per basic share.
  --  Shareholders' equity increased 170% to $20.1 million from $7.4
      million in the year-ago period.
  --  Completed a private placement that provided net proceeds of
      $11.4 million during the second quarter of fiscal 2008 and
      used the funds to repay the $2.3 million note payable, acquire
      oil and gas property and equipment, and begin drilling program.

Operational Highlights

  --  Net value of oil and gas properties increased 92% from
      $9,457,541 for the period ended March 31, 2007 to $18,132,229
      for the period ended March 31, 2008. The Company now has
      11,274 net acres with 43 net wells.
  --  Oil production for the quarter ending March 31, 2008 was
      17,710 BOEs (barrels of oil equivalent, gross) compared to
      10,298 BOEs for the quarter ending March 31, 2007, an increase
      of 72%. Production in March 2008 hit an all-time monthly high
      of 7,618 BOEs compared to 3,437 BOEs produced in March 2007,
      for an increase of 121%.
  --  Announced that the drilling program at the Company's
      Cone-Dubose Unit No.1 well, the fifth well brought on line
      in a series of ten wells planned in the area, yielded an initial
      production rate of 100 barrels of oil per day (BOPD).
      Production has now stabilized at 40 BOPD.
  --  Acquired a majority of the working interest in the Hines Unit
      No.1 well in Gonzales County, Texas, a straight-hole completion
      in the Austin Chalk formation in a 160-acre unit south of the
      city of Gonzales County, Texas and is just west of the Lucas
      Energy Hagen Ranch No.3 well.
  --  G.G. Griffin No. 5 well, located south of Wrightsboro, Texas,
      in Gonzales County, commenced production on February 11, 2008.
      The well initially tested at 20 BOPD and 33 BWPD and has not
      yet been stimulated.
  --  Subsequent to the end of the year, entered into a contract
      with Houston Pipe Line, a division of ETC, a public energy
      company, to connect several of Lucas' key gas producing wells
      into a central metering point in Gonzales County, Texas.

Corporate Milestones

  --  Annual reserve report updated by Forrest A. Garb & Associates,
      Dallas, for the period ended March 31, 2008 showed proved
      reserves of 1,797,230 barrels of oil, 64% of which is
      classified as Proved Undeveloped, and 96.01 MMcf of natural
      gas, all of which is classified as Proved Developed Producing.
      These reserves have a PV-10 of $90,135,530.
  --  Named the fastest-growing company in the Oil & Gas Journal 200
      group for the third quarter, 2007, based on its 153% increase
      in stockholders' equity to $19 million in the third quarter
      2007 from $7.5 million at March 31, 2007.
  --  Moved off bulletin board and commenced trading on American
      Stock Exchange on February 12, 2008.

For the year ended March 31, 2008, net income was $22,602 compared to $322,128 for the full year ended March 31, 2007, primarily due to the increase in operating expenses that occurred in the fourth fiscal quarter 2008. Comprehensive net income was $1.25 million or $0.13 per basic compared to $322,000, or $0.05 per basic share outstanding. The increase in comprehensive net income was primarily due to the recording of a non-cash gain of $1.2 million on marketable securities.

* In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Lucas Energy uses EBITDAS, a non-GAAP measure of operating income (loss), net income (loss) and income (loss) per share, which are adjustments from results based on GAAP to exclude Depreciation and Amortization, Interest expense/income, Taxes and Stock options expenses, as reconciled in the financial statements below. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors.)

Operating Expenses:

  --  Lease operating expenses increased from $337,162 for fiscal
      year 2007 to $727,968 for fiscal year 2008. This increase is
      due to an increase in the number of producing wells.
  --  Depreciation and depletion, a non-cash expense, increased from
      $153,903 for fiscal year 2007 to $697,599 for fiscal year 2008.
      This increase is due to the significant increase in the number
      of producing wells along with increases in production rates.
  --  General and administrative expenses increased from $184,237
      for the period ending March 31, 2007 to $1,597,412 for the
      period ending March 31, 2008 principally due to a $653,000
      increase in salaries reflecting a growth in staff, $290,000
      in legal and professional fees associated with the listing on
      the American Stock Exchange and Sarbannes-Oxley compliance

Management Comments

James J. Cerna, Chief Executive Officer of Lucas Energy, said: "Our results reflect an impressive year of financial and operational achievements. Our production and resulting revenues continued to accelerate in the fourth quarter and resulted in a strong finish to fiscal 2008. We achieved a record increase in production and benefited from continued increases in commodity prices. Operating as a public company, we invested in building the appropriate infrastructure to support our future growth, which resulted in significant increases to our operating costs, many of which are non-recurring costs. Our balance sheet improvement was due in part to the successful equity raise allowing us to repay all our debt. We used the remaining portion of the proceeds to acquire key strategic properties, and today we sit with 11,274 net acres with 43 net wells and a portfolio of producing oil and gas assets with a reserve valuation of $90 million."

Mr. Cerna concluded, "We had a very exciting and productive first year as a public company. Beyond the financial and operating metrics we also achieved a listing of our common shares on the American Stock Exchange, received recognition by the Oil & Gas Journal, a top energy industry trade publication, as one of its 50 fastest growing oil and gas companies, and we began a program to introduce our company to the investment community. We believe that the stage is set for continued growth in fiscal year 2009."

About Lucas Energy, Inc.

Lucas Energy, Inc. 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 Lucas Energy logo is available at

Forward-Looking Statement

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. The complete filing is available at

                           LUCAS ENERGY, INC.
                       Consolidated Balance Sheets
               For the Years Ended March 31, 2008 and 2007

                                            March 31,    March 31,
                                              2008         2007
                                           -----------  -----------
  Cash                                     $ 1,142,386  $   710,018
  Marketable securities                      2,388,355           --
  Oil and gas receivable                       559,886      131,485
  Other current assets                          38,849       70,823
                                           -----------  -----------

   TOTAL CURRENT ASSETS                      4,129,476      912,326


  Properties subject to amortization        18,978,699    9,623,745
  Accumulated depletion                       (846,470)    (166,204)
                                           -----------  -----------

   OIL AND GAS PROPERTIES, NET              18,132,229    9,457,541

 Fixed assets, net of accumulated
  depreciation of $363 and $0, respectively      2,255           --

 Other assets                                   51,766       56,123
                                           -----------  -----------

   TOTAL ASSETS                            $22,315,726  $10,425,990
                                           ===========  ===========

  Accounts payable and accrued expenses    $ 1,174,737  $   386,004
  Accrued interest payable                          --       52,766
                                           -----------  -----------

   TOTAL CURRENT LIABILITIES                 1,174,737      438,770

  Note payable                                      --    2,300,000
  Asset retirement obligation                  141,512      111,022
  Deferred tax liabilities                     834,126      132,185
                                           -----------  -----------

   TOTAL LIABILITIES                         2,150,375    2,981,977
                                           -----------  -----------

  Preferred stock, 10,000,000 shares
   authorized of $0.001 par value, no
   shares issued and outstanding                    --           --
  Common stock, 100,000,000 shares
   authorized of $0.001 par value,
   10,246,156 and 7,448,107 shares issued
   and outstanding, respectively                10,246        7,448
  Additional paid-in capital                18,518,806    7,052,121
  Retained earnings                            407,046      384,444
  Accumulated other comprehensive income     1,229,253           --
                                           -----------  -----------

   TOTAL STOCKHOLDERS' EQUITY               20,165,351    7,444,013
                                           -----------  -----------

    EQUITY                                 $22,315,726  $10,425,990
                                           ===========  ===========

                             Lucas Energy, Inc.
                      Consolidated Statements of Operations
                   For the Years Ended March 31, 2008 and 2007

                                              For the      For the
                                             Year Ended   Year Ended
                                              March 31,    March 31,
                                                2008        2007
                                             ----------- -----------
  Oil and gas revenues                       $ 3,070,668 $ 1,296,084
  Consulting income                               10,000      34,000
                                             ----------- -----------
   Total Revenues                              3,080,668   1,330,084

  Lease operating expenses                       727,968     337,162
  Depreciation, depletion, and amortization      697,599     153,903
  General and administrative                   1,597,412     184,237
                                             ----------- -----------
   Total Expenses                              3,022,979     675,302
                                             ----------- -----------

 INCOME FROM OPERATIONS                           57,689     654,782
                                             ----------- -----------
  Interest income                                135,479      17,297
  Interest expense                              (101,877)   (222,611)
                                             ----------- -----------
   Total Other Income (Expenses)                  33,602    (205,314)
                                             ----------- -----------

 NET INCOME BEFORE INCOME TAXES                   91,291     449,468

 INCOME TAX EXPENSE                               68,689     127,340
                                             ----------- -----------

 NET INCOME                                  $    22,602 $   322,128
                                             =========== ===========

  SECURITIES, NET OF TAX                       1,229,253          --
                                             ----------- -----------

 COMPREHENSIVE INCOME                        $ 1,251,855 $   322,128
                                             =========== ===========

 BASIC                                       $      0.00 $      0.05
                                             =========== ===========
 DILUTED                                     $      0.00 $      0.05
                                             =========== ===========

 BASIC                                         9,313,674   6,996,041
                                             =========== ===========
 DILUTED                                      11,177,515   6,996,041
                                             =========== ===========

                               months ended     Twelve months
                                  3/31/08       ended 3/31/07
 GAAP Net Income                     22,602            322,128
  Stock Option Expense              105,000
  Interest Expense                  101,877            222,611
  Taxes                              68,689            127,340
  D,D, &A                           697,599            153,903
 EBITDAS                            995,767            829,982
 EBITDA/Basic Share                   $0.11              $0.09


                                Year ended       Amount       %
                                 March 31,      Increase/  Increase/
                              2008      2007   (Decrease) (Decrease)

 Oil (barrels) net of
  royalty                     36,728    21,502    15,226      71%
 Natural gas (thousand cubic
  feet)                        1,712     2,310      (598)    (26%)
 Total (barrels oil
  equivalent)                 37,013    21,887    15,126      69%

 Oil (barrels per day)           100        59        41      69%
 Natural gas (thousand cubic
  feet per day)                    5         6        (1)    (17%)

 Total (barrels oil
  equivalent per day)            101        60        41      68%

 Average Sales Price:
 Oil (per barrel)           $  86.46  $  59.68  $  23.78      40%
 Natural gas (per thousand
  cubic feet)               $   6.06  $   6.03  $   0.03       1%
CONTACT:  Lucas Energy, Inc.
          Investor Relations
          Brad Holmes
          James Cerna, Chief Executive Officer