Lucas Energy, Lucas Energy News, Investing in Lucas Energy
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Investors have recently been avoiding small-cap companies. However, Lucas Energy is a small-cap company that has achieved substantial earnings and revenue growth.
Investors have recently been avoiding small-cap companies. However, Lucas Energy is a small-cap company that has achieved substantial earnings and revenue growth.
The announcement of a share buyback always marks a time to take notice. A stock buyback signals that the company believes its shares are undervalued. Moreover, a share repurchase program boosts demand for the stock as well as the company’s EPS (earnings per share). Lucas Energy Inc (LEI) has recently announced that its board has approved a stock buyback program worth as much as one million common shares over the next 18 months. The Houston, Texas-based independent oil and gas company has 10.2 million shares outstanding. Lucas Energy’s CEO James Cerna said, “Trading at one-third our net asset value of $90 million (at March 31) we believe our company’s current share value is largely unrecognized.”
Lucas Energy, through its subsidiary, Lucas Energy Resources Inc, engages in the acquisition and operation of oil and gas properties in Texas. The company recently reported its results for the fiscal year ended March 31, 2008. Lucas Energy’s EPS jumped 288% to $0.13 from $0.05 in the prior year, driven by a non-cash gain of $1.2 million on marketable securities. Revenues surged almost 136% to $3.07 million, falling marginally short of the consensus expectations. The company achieved record expansion in production and also benefited from the continued upturn in commodity prices. Lucas Energy has been investing significantly in its future growth and raised equity to reduce its debt burden.
The company has recently been focusing on acquiring additional acreage in South Texas. Lucas Energy is also endeavoring to improve its maintenance activities so that it can reduce downtime for its wells. Moreover, it has recently completed a natural gas pipeline, connecting the Hagen #3 well, piping about 30 mcf of natural gas per day. The company was cited by leading energy industry trade publication Oil & Gas Journal as one of the 50 fastest growing oil and gas companies.
After having reached a 52-week high of $9.80 on September 4 last year, shares declined steadily till mid-March. Shares recovered and then slipped again and are currently trading close to their 52-week low of $2.32.
In these uncertain times, small-cap companies are being shunned by investors. This has created a good buying opportunity into a company that has bright prospects. The stock buyback may also be seen as a good indicator to invest in Lucas Energy.
Alternatio Cirqui, EconomyWatch.com Energy Correspondent
