HOUSTON, Oct. 2, 2012 (GLOBE NEWSWIRE) -- Lucas Energy, Inc. (NYSE:LEI), an independent oil and gas company (the "Company" or "Lucas"), today announced that the Company has executed a term sheet for a Participation Agreement (commonly called a "joint venture" in the industry) with Milestone Energy, LLC ("Milestone") for the development of oil and gas properties located in the Gonzales, Wilson, and Karnes Counties, Texas area of the Eagle Ford/Austin Chalk Trend. The binding provisions of the term sheet call for Milestone to contribute 80% of the cost or value of the acreage to be developed and the Company to contribute 20%, and Milestone will be responsible for 100% of the drilling and completion cost, as well as project generation fees. The Company anticipates Milestone contributing from between $40 million and $100 million to the joint venture pursuant to the terms of a final Participation Agreement.
Milestone Energy, LLC is a Texas limited liability company privately owned and organized by a group of investors located in mainland China and Hong Kong. Milestone is headquartered in Houston, Texas. Milestone primarily seeks multi-well crude oil investments via participation programs which give them direct ownership positions in the wells. Milestone adheres to a stringent project selection process and vigorous risk-reward analysis to maximize its returns for its investors.
Lucas will be the operator of the properties, contributing its expertise and knowledge of the area as well as making available to the Joint Venture certain acreage it has acquired in the past. Milestone will earn an 80% working interest in those properties in which Lucas has an undivided interest, and 80% of the Company's working interest where it has a divided interest in such properties. Lucas will retain 20% of its current working interest in such properties, with all such working interests being subject to the terms of the final Participation Agreement. The formal Participation Agreement is expected to be finalized, and drilling is anticipated to begin, in late October 2012.
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