Wednesday Morning, July 25th
SITE NEWS
New IceMD Recording:
Understanding Medical Labels;
Hidden Treasure News:
Lucas Energy Announces $12 Million Private Placement of Restricted Common Stock and Warrants
HOUSTON- (July 25, 2007) Lucas Energy, Inc. (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. (read the full article below)
The Ice Man feels this is big news for LUCE. Now he thinks they could earn 40 cents, then 70. They could also go onto the ASE, and sell for maybe 20 times earnings. So in six months LUCE could be trading at 7 to 8 - a great investment.
Dow Stock News
Boeing (BA) on Wednesday said second-quarter net income rose to $1.1 billion, or $1.35 a share, from a loss of $160 million, or 21 cents a share in the year-ago period. The aerospace giant said revenue jumped 14% to $17 billion. Earnings from operations rose to $1.5 billion from a loss of $48 million. Analysts surveyed by Thomson Financial forecast earnings of $1.16 a share and revenue of $16.2 billion, on average. The Chicago-based conglomerate said it's lifting its 2007 profit outlook on a stronger commercial planes business to $4.80 to $4.95 per share, up from $4.55 to $4.75 per share, compared to the latest Wall Street estimate of $4.91 a share. - MarketWatch
Reuters reports that Microsoft (MSFT) has signed a deal with Electronic Arts (ERTS) to put advertising into some of hte game publisher's most popular video games. back to top
Ice Man Stocks
For a printable version of the Ice Man's picks, <print.shtml>click here.
Breakouts the Ice Man may consider trading:
MDTH - 34.60
Regular Trades the Ice Man may consider:
SWWC - 15.15
Depressed stocks the Ice Man may buy:
ILF - 213.20 G
RIO - 49.50 G
CCJ - 40
RTP - 281 G
SSRI - 36
SBS - 46 G
PCAR - 89 G
RBN - 53.15 G
UBB - 121.50 G
FMCN - 39.90 G
BKX - 106.55 G
FRO - 45.80 G
BCO - 63 G
ATW - 69 G
TWIN - 68.70 G
EXC - 72.75 G
CMI - 106.50 G
EXPE - 24.60 G
INSP - 20.60 G
SKX - 27.20 G
FTEK - 28.75 G Dollar Man Ideas:
DUSA - 2.85 B
HEB - 1.40
DRL - 1.60
ANO - 3
Media Commentators
Cramer's Comments:
Bullish: PEP, TXN, CSCO
Barrons Online:
HD - a Bargain at this price for a patient investor
Zacks:
Likes - PCU, AMLN
Ice Cold Commentators
Break Man Video Summary:
Break out buy watch list for short term gains July 25 includes: VLO, SONC, BBI, TWX, FLML, XLNX, MIR, SANM, MDRX, CRZO All short sales today.
Several candidates for break out or pullback plays for at least short term gains by buying the break out on good volume and selling at least some on the first day. http://stocktiger.com
Swing Man Market Recap:
CNBC Fast Money Review
1. BIGGEST DROP IN FOUR MONTHS: FACTOR #1
The headline: Dow Gets Pummeled 226 Points on Fear Easy Money From Credit Market Drying Up...
Borrowing for Corporations Gets More Expensive, Will the Stock Market Suffer? ...
Bolling tells the panel, don’t worry. He likes the long term chart of the S&P.
BIGGEST DROP IN FOUR MONTHS: FACTOR #2
The headline: Small-Cap Russell 2000 Drops 3% as Smaller Companies Vulnerable to Higher Rates...
Najarian: iShares Russell 2000 Index (IWM) has had a huge run. Feels if you own IWM it’s time to take money off the table.
BIGGEST DROP IN FOUR MONTHS: FACTOR #3
Najarian: global growth isn’t over, long-term he’s positive.
Thinks investors should stay out of financials such as LEH and GS. He doesn’t like BX either.
Adami: believes in global expansion and expects few more days of nonsense. Says this market is just fine.
Macke: GS is a sell at $200. It’s worth noting on Tuesday July 24th GS closed at $198.15.
Bolling: doesn’t agree with Macke. He says GS is a buy below $200.
BIGGEST DROP IN FOUR MONTHS: FACTOR #4
The headline: CFC (Countrywide) Says More Mortgage Borrowers Falling Behind on Payments
Bolling: The Street expected negative news from CFC Tuesday, the more they talked the more their stock moved lower.
Macke: credit fears likely take a pillar of support out market. Thinks there will be buying opportunities.
2.AFTER HOURS ACTION:
The headline: AMZN Soars 12% After Hours On Blowout Profit.
Macke says AMZN did well in North America which was a surprise. Says not to chase stock, instead he prefers NILE on a dip.
Also a smart way to trade this trend is to buy FDX.
Najarian says AMZN is also exploding in China and the stock is a big win
3. WHAT BP MEANS FOR ENERGY TRADE:
The headline: BP Profit Tumbles Nearly 13% Excluding 1-Time Gains.
Bolling: There could be big problems at BP. He cautions to wait and hear from other big oil companies before drawing conclusions.
He concedes oil could be losing ground.
4. The Top 3
Fallen Idol
With iPhone mania in full effect, AAPL stock might seem like it is the greatest. Monday shares traded at an all-time high.
On Tuesday, shares dropped over 6% after T reported disappointing activation numbers for the iPhone.
Macke: the stock is long overdue for a pullback. Bolling: says AAPL up 45% year to date, likes the stock long term.
Najarian: believes the iPhone with 4G memory is being returned at a rapid pace. Says only the 8G iPhone is doing well.
Feels the better trade is NOK.
Adami: If AAPL trades 100 million shares Wednesday he’s out.
(If that happens, 150 million shares will have traded over a 2-day period and says, that level of volume signals the top to him.)
Is Dealmaking Done? One of the biggest casualties of credit drying up may be dealmaking.
Sources close to Fast Money say investment banking could be done for the summer.
Dylan Ratigan says he’s hearing that M&A will slow down considerably over the next month.
Adami: agrees with Dylan, doesn’t think all dealmaking is over. Says that US corporations have great balance sheets.
Companies such as PFE, MSFT, and XOM have more money than ever.
Najarian: AIG has a huge amount of cash on its balance sheet.
Bolling: deals scheduled for August are already in due diligence. Doesn’t think they will be derailed.
Top Gun
Earnings from LMT, the nation's largest defense contractor pushed its shares even higher.
NOC also came out with earnings above forecasts. Will defense stocks continue?
Adami: defense will likely be flat in ’08 and up again in ’09. Recommends taking profits in LMT. BA is the stock to watch.
Bolling: If BA doesn’t do well get out of HON. Conversely, if Boeing does well, add to your position in HON.
5. Your Best Sell-Off Proof Trades
Macke: buy COST if it drops below $60.
Bolling: admits he lost a lot of money in the market Tues., but not ready to bail out.
It’s OK not to take on any new positions.
Najarian: Buy defensive stocks, thinks BIIB and AMLN are buys.
6. Final Trade: Your First Move For Wednesday
Bolling recommends quick, tight stops on GOOG and IBM. “If they tick down a dollar or so, get out.
Adami: VOD down over 3% Tue., could represent a buying opportunity.
Najarian likes TEVA. Generic pharmas are hot.
Macke is staying cool. He reiterates that COST under 60 is a buy.
News and Events Digest
Breaking News
Eagle Bulk Shipping Inc., operator of a fleet of dry bulk ships, said Wednesday it agreed to buy 26 Supramax vessels for $1.1 billion from the parent of Anemi Maritime Services, a private Greek shipping company, more than doubling Eagle's fleet to 49.
Eagle expects to receive the ships between 2008 and 2012. It said 21 of the 26 have long-term charters up to 2018, with minimum revenue from the charters of $1 billion
Amazon’s profit more than tripled, boosted by soaring U.S. sales and robust demand for a new membership program. Its shares surged 18% after hours. - WSJ
GlaxoSmithKline (GSK) Europe's largest drugmaker, announced it would lift its stock buyback authorization to 12 billion pounds ($24.7 billion) an increase of 7.7 billion pounds, after reporting a 1.3% profit rise for the second quarter. Its profit rose to 1.33 billion pounds, or 23.7 pence a share, with revenue down 2% to 5.67 billion pounds. Sales of Avandia products for diabetes dropped 22% to 349 million pounds after the publication of an article in New England Journal of Medicine raised health concerns. Analysts were looking for earnings of 24.3 pence a share on revenue of 5.72 billion pounds. The company still sees annual earnings per share growth between 8% and 10% at constant exchange rates. - MarketWatch
Panera Bread Co. reported Tuesday that its profit for the second quarter dropped 7 percent primarily due to customers' shift to lower-margin foods such as outsourced soufflés, scones and muffins. - bizjournals
P.F. Chang's China Bistro Inc. on Wednesday lowered its profit forecast for 2007 in anticipation of sluggish sales at many of its restaurants.
The restaurant operator now expects to earn $1.34 per share on revenue of $847.2 million for the full year. That is down from a prior forecast for earnings of $1.38 per share on revenue of $850.4 million. - AP
Hudson City Bancorp, Inc. (HCBK) said Wednesday its board has approved a buyback of about 10%, or, 51.4 million of its common shares. The bank said there are still 15.8 million shares to be repurchased under a previously existing buyback. - MarketWatch
Media Summary:
According to Reuters, Amazon's (AMZN) sales and earnings rose and the stock was up almost 20% after hours.
Reuters writes that the CEO of XM Satellite (XMSR) will step down next month.
Reuters writes that Honda (HMC) quarterly sales moved up and its raised guidance for the rest of the year.
The Wall Street Journal writes that Chrysler's bankers are beginning to discuss the chances that they cannot raise all $20 billion in loans being sought from investors.
The Wall Street Journal writes that investors are concerned that mortgage company CountryWide (CFC) cannot shield itself from the deteriorating market in home loans.
The Wall Street Journal writes that Nintendo's profits rose four-fold in the last quarter and it raised its full-year guidance.
The New York Times writes that Toyota (TM) is testing a plug-in hybrid which would compete with products from GM (GM).
The FT writes that SAC Capital, the huge hedge fund, is considering selling 20% of itself to private interests.
The FT reports that the former CFO of YouTube will take the same position with social network site MySpace.
Barron's reports that RF Micro Devices (RFMD) guided above Wall St. expectations.
Bloomberg reports that the short interest in Baidu (BIDU) is rising as its stock price goes up and Google (GOOG) presses to take more market share from its in China.
M&A Activity:
Medical-diagnostics provider Dade Behring Holdings Inc. (DADE) has been sounding out potential buyers and could be close to striking a deal, possibly with Germany's Siemens AG, The Wall Street Journal Online reported on Wednesday. - Reuters
IPO Central:
Reinsurer Validus Holdings (VR) priced its 15.2 million share initial public offering at $22 each. The offering proceeds will be used to repay interim financing for the acquisition of Talbot Holdings Ltd., to support the future growth of Validus Re and for general corporate purposes.
Economic Data:
10:00 Existing home sales
10:30 Crude Inventories
2:00 Fed’s Beige Book
Recent Stock Split Announcements:
On July 18, FMC Technologies, Inc. (NYSE:FTI) announced that its board of directors approved a 2:1 stock split to be payable on August 31, 2007.
On July 19, Textron Inc. (NYSE:TXT) announced that its board of directors approved a 2:1 stock split to be payable on August 24, 2007.
Companies that have previously announced stock splits which become effective in the next several trading days.
Ex-Date Split Symbol Company
7/30 3:1 GMCR Green Mountain Coffee Roasters
7/31 3:2 DIOD Diodes Incorporated
7/31 2:1 CTRP Ctrip.com International
8/3 2:1 SJR Shaw Communications, Inc.
Upgrades and Downgrades by Sector:
Aerospace
LMT Lockheed Martin Friedman Billings Price Target Raised Outperform $110 to $120
NOC Northrop Grumman Friedman Billings Price Target Raised Mkt Perform $75 to $80
Alternative Energy
BIOF Biofuel Energy JP Morgan Initiated at Overweight
Biotech
CRH CRH Plc. UBS Upgraded from Neutral to Buy
ILMN Illumina Leerink Swann Upgraded from Mkt Perform to Outperform
ILMN Illumina Cowen & Co Upgraded from Neutral to Outperform
BIOF Biofuel Energy Citigroup Initiated at Buy $16
CHTP Chelsea Therapeutics Oppenheimer Initiated at Buy $10
GPCB GPC Biotech Needham & Co Downgraded from Buy to Hold
Business Services
FIS Fidelity National Information Services Barrington Research Price Target Raised Outperform $57 to $60
PFWD Phase Forward Friedman Billings Price Target Raised Mkt Perform $15 to $16.50
Chemicals-Ethanol
VSE VeraSun Energy Citigroup Initiated at Buy $19
Computer Hardware
STX Seagate Tech Robert W. Baird Upgraded from Neutral to Outperform $25 to $30
SYPR Sypris Solutions Robert W. Baird Upgraded from Neutral to Outperform $8 to $12
CERN Cerner Caris & Company Price Target Raised Average $52 to $53
EMC EMC Corp Needham & Co Price Target Raised Buy $20 to $22
EMC EMC Corp RBC Capital Mkts Price Target Raised Sector Perform $15 to $17
CSCD Cascade Microtech Merriman Curhan Ford Downgraded from Buy to Neutral
CSCD Cascade Microtech Needham & Co Cut Price Target Buy $18 to $14
Computer Services
CHINA CHINA - initiated with a Buy at MONT
Computer Software
MANH Manhattan Assoc JP Morgan Upgraded from Underweight to Neutral
MANH Manhattan Assoc RBC Capital Mkts Price Target Raised Sector Perform $28 to $30
MANH Manhattan Assoc Cantor Fitzgerald Price Target Raised Hold $28 to $29
VOCS Vocus RBC Capital Mkts Price Target Raised Outperform $27 to $32
Construction
JEC Jacobs Stifel Nicolaus Downgraded from Buy to Hold
JEC JEC - downgraded to Stifel Nicolaus
Educational Services
REVU Princeton Review Stifel Nicolaus Upgraded from Hold to Buy $9.50
Finance Companies
CFC Countrywide Keefe Bruyette Upgraded from Underperform to Mkt Perform $34 to $29
ACAS American Capital Piper Jaffray Downgraded from Outperform to Market Perform
ALD Allied Capital Piper Jaffray Downgraded from Outperform to Market Perform
CFC Countrywide Friedman Billings Downgraded from Mkt Perform to Underperform $36 to $25
MCGC MCG Capital Piper Jaffray Downgraded from Outperform to Market Perform
Foods
HAIN Hain Celestial UBS Upgraded from Neutral to Buy
PPC Pilgrim's Pride BMO Capital Markets Upgraded from Market Perform to Outperform
Health-Beauty Prod
IPAR Inter Parfums Piper Jaffray Downgraded from Outperform to Market Perform
IPAR Inter Parfums Oppenheimer Downgraded from Buy to Neutral $31 to $26
Healthcare
NEOG Neogen Roth Capital Price Target Raised Buy $33 to $35
VRTX Vertex Pharm Stifel Nicolaus Price Target Raised Buy $31 to $35
RESP Respironics Caris & Company Price Target Raised Above Average $45 to $50
AMSG AmSurg RBC Capital Mkts Price Target Raised Sector Perform $23 to $25
Heavy Machinery
CR Crane Friedman Billings Upgraded from Mkt Perform to Outperform $47 to $54
Household Goods
KMB Kimberly-Clark Citigroup Upgraded from Sell to Hold
Industrial Equipment
IEX IDEX Corp RBC Capital Mkts Price Target Raised Sector Perform $38 to $40
IEX IDEX Corp Friedman Billings Price Target Raised Mkt Perform $37 to $40
PNR Pentair Friedman Billings Price Target Raised Mkt Perform $35 to $38
JOYG U.S. Coal market under pressure says JOYG
Insurance
AGP Amerigroup CIBC Wrld Mkts Upgraded from Sector Underperform to Sector Outperform
BER W.R. Berkley Citigroup Upgraded from Hold to Buy
SEAB Seabright Insurance Holdings Friedman Billings Upgraded from Mkt Perform to Outperform $21 to $22
MTG MGIC Investment Friedman Billings Downgraded from Outperform to Mkt Perform $65 to $55
PMI PMI Group Friedman Billings Downgraded from Outperform to Mkt Perform $60 to $44
RDN Radian Group Friedman Billings Downgraded from Outperform to Mkt Perform $62.78 to $53
ZNT Zenith National Insurance Friedman Billings Cut Price Target Outperform $58 to $56
Major Pharmaceutical
SPPI Spectrum Pharma Brean Murray Upgraded from Sell to Hold
GSK GlaxoSmithKline Bear Stearns Downgraded from Peer Perform to Underperform
SPPI Spectrum Pharma Friedman Billings Downgraded from Outperform to Mkt Perform $12.25 to $5.50
PHRM Pharmion Friedman Billings Cut Price Target Outperform $44 to $34
Manufacturing
HOKU HOKU Scientific Piper Jaffray Downgraded from Outperform to Underperform
HOKU HOKU - downgraded at Piper with $8 price target
Mining - Minerals
BTU Peabody Energy AG Edwards Downgraded from Buy to Hold
BTU Peabody Energy Caris & Company Cut Price Target Above Average $56 to $52
BTU Peabody Energy RBC Capital Mkts Cut Price Target Outperform $60 to $56
Mining - Steel & Iron
NUE Nucor CIBC Wrld Mkts Upgraded from Sector Perform to Sector Outperform
AKS AKS - price target raised to $38 but downgraded to sell at SOLE
Motor Vehicles
CVGI Commercial Vehicle Group Robert W. Baird Downgraded from Outperform to Neutral $21 to $16
PCAR PCAR - downgraded at Morgan Stanley
Oil and Gas
ESV Ensco RBC Capital Mkts Price Target Raised Sector Perform $62 to $77
SII Smith Intl Calyon Securities Price Target Raised Add $62 to $68
WFT Weatherford Friedman Billings Price Target Raised Mkt Perform $60 to $62
XTO XTO Energy RBC Capital Mkts Price Target Raised Sector Perform $63 to $66
NBR Nabors Ind RBC Capital Mkts Cut Price Target Sector Perform $44 to $39
Paper and Packaging
AVY Avery Dennison JP Morgan Upgraded from Neutral to Overweight
RYN Rayonier Citigroup Upgraded from Sell to Hold
Personal Services
NTRI Nutrisystem Lehman Brothers Downgraded from Overweight to Equal-weight
WTW Weight Watchers Lehman Brothers Downgraded from Equal-weight to Underweight
NTRI Nutrisystem Lazard Capital Cut Price Target Buy $80 to $75
Real Estate
MSW Mission West Stifel Nicolaus Upgraded from Hold to Buy $13.55
Regional Banks
CBH Commerce Bancorp RBC Capital Mkts Cut Price Target Sector Perform $28 to $27
FTBK Frontier Fincl Friedman Billings Cut Price Target Underperform $21 to $20
IBCP Independent Bank RBC Capital Mkts Cut Price Target Sector Perform $16 to $14
SBIB Sterling Banc RBC Capital Mkts Cut Price Target Sector Perform $13 to $12
SNV Synovus Stifel Nicolaus Cut Price Target Buy $35 to $34
REITs
BDN Brandywine Realty Wachovia Upgraded from Underperform to Mkt Perform
LRY Liberty Prop Wachovia Downgraded from Outperform to Mkt Perform
Restaurants
DPZ Domino's Pizza Friedman Billings Price Target Raised Outperform $23 to $24
RUTH Ruths Chris Steak House JP Morgan Initiated at Overweight
CAKE Cheesecake Factory Friedman Billings Cut Price Target Outperform $34 to $33
PNRA Panera Bread Friedman Billings Cut Price Target Mkt Perform $56 to $48
Retail Trade
AMZN Amazon.com Lehman Brothers Upgraded from Underweight to Equal-weight
AMZN Amazon.com Bear Stearns Upgraded from Underperform to Peer Perform
AMZN Amazon.com RBC Capital Mkts Upgraded from Sector Perform to Outperform
AMZN Amazon.com JP Morgan Upgraded from Underweight to Neutral
AMZN Amazon.com Credit Suisse Upgraded from Neutral to Outperform
PSS Payless Shoe KeyBanc Capital Mkts / McDonald Upgraded from Buy to Aggressive Buy $42
AMZN Amazon.com Deutsche Securities Price Target Raised Buy $80 to $100
EZPW EZCORP Roth Capital Price Target Raised Buy $20 to $21
CMRG Casual Male Stifel Nicolaus Initiated at Buy $14
SKX Skechers USA First Albany Downgraded from Buy to Neutral
Savings & Loan
WBS Webster Financial RBC Capital Mkts Price Target Raised Sector Perform $45 to $46
WBS Webster Financial Friedman Billings Price Target Raised Mkt Perform $43 to $44
Semiconductors
ANAD Anadigics Charter Equity Upgraded from Mkt Perform to Buy
CAMD California Micro AG Edwards Upgraded from Hold to Buy $6
LRCX Lam Research Caris & Company Upgraded from Average to Above Average
ANAD Anadigics Needham & Co Price Target Raised Buy $14.50 to $16
ANAD Anadigics Roth Capital Price Target Raised Buy $16.50 to $17
CEVA Ceva Ferris Baker Watts Price Target Raised Buy $8.50 to $10
LLTC Linear Tech First Albany Price Target Raised Buy $42 to $45
LRCX Lam Research Needham & Co Price Target Raised Buy $62 to $80
RFMD RF Micro Device CIBC Wrld Mkts Price Target Raised Sector Outperform $8 to $9
RFMD RFMD - Jefferies says is a long term buy
Telecommunications
ALSK Alaska Comms Lehman Brothers Upgraded from Underweight to Equal-weight
PLT Plantronics Kaufman Bros Upgraded from Sell to Hold $20 to $25
GRMN Garmin CIBC Wrld Mkts Price Target Raised Sector Outperform $79 to $89
TLAB Tellabs Robert W. Baird Price Target Raised Neutral $10 to $14
TLAB Tellabs Friedman Billings Price Target Raised Mkt Perform $11 to $12
TNB Thomas & Betts RBC Capital Mkts Price Target Raised Outperform $71 to $73
AXE Anixter Stifel Nicolaus Downgraded from Buy to Hold
CTC Co de Telecomm Citigroup Downgraded from Buy to Hold
TU Telus Matrix Research Downgraded from Buy to Hold
RVSN RADVision RBC Capital Mkts Cut Price Target Sector Perform $23 to $22
Transpo-Railroads
BNI Burl Nrth Santa Fe Calyon Securities Price Target Raised Neutral $73 to $90
Transportation
ATB Arlington Tankers Cantor Fitzgerald Price Target Raised Hold $23 to $26
FRO Frontline Jefferies & Co Price Target Raised Hold $39 to $44
OSG Overseas Shipholding Jefferies & Co Price Target Raised Buy $84 to $124
TK Teekay Shipping Jefferies & Co Price Target Raised Hold $59 to $64
TNP Tsakos Energy Jefferies & Co Price Target Raised Buy $85 to $98
OSG Overseas Shipholding Banc of America Sec Downgraded from Buy to Neutral
Travel Services
EXPE Expedia Matrix Research Upgraded from Sell to Hold
Wireless Services
RCI Rogers Comms RBC Capital Mkts Price Target Raised Top Pick $52 to $59
___________________________
Lucas Energy Announces $12 Million Private Placement of Restricted Common Stock and Warrants
HOUSTON- (July 25, 2007) Lucas Energy, Inc. (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; www.lucasenergy.com) 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.
CONTACT INFORMATION:
Corporate: James Cerna, Jr. CEO, Lucas Energy, Inc. (713) 528-1881
Media: Anthony DiMaio, Anthem Communications (917) 449-1177