HISTORIC OIL PRICES SPURS A REBIRTH OF A NEW AMERICAN ROUGHNECK
HOUSTON, TEXAS – The U.S. Energy Industry will celebrate its most significant anniversary on January 10th, 2007 – the 106th commemoration of the Lucas Gusher – which became in 1901 one of America’s most prolific and powerful economic icons, and permanently redefining the expectations of an entire industry. From this unknown area in Texas known as Spindletop in 1901 came 3,593,113 barrels of oil; and by 1902 the field produced 17,420,949 barrels.
Many of the big oil companies have long since moved away from these earlier finds, but with the surge in oil prices after September 11th, many of the capped domestic wells are being revived at the hands of a new breed of American Roughneck…who carries a laptop, drives a 4x4, and comes armed to the oil fields of East Texas with an MBA and a Wall Street pedigree.
The State of Texas is home to more than 355,000 oil and natural gas wells. More than 15,000 of those are inactive wells – some of them sitting idle for more than 20 years – classified as “orphaned” by the Texas Railroad Commission. According to some estimates, the total Texas oil reserves are calculated to be 11.15 billion barrels. As of September 11, 2001, when the price of oil was $25, this would value Texas reserves at $278 billion. With today’s prices, the same reserves would top $700 billion – a half-trillion-dollar increase. This windfall is resurrecting an old occupation, the American Roughneck, with some new features, especially in Texas.
Exploration costs remain high, causing some to rethink the approach to a business over a century old. The new Wildcat and Roughneck are now scouring places like Eastern Texas for capped wells that they can revitalize…and finding them.
One such example of this new entrepreneurial breed is found in the two-year old Lucas Energy, Inc. The success of Lucas Energy is found in its ability to increase profitability, revenues and assets without high overhead and costs usually connected to oil and gas exploration. The company’s recent six-month results are very impressive: revenues improved by 406% to $548,421 for the six-month period ended September 30, 2006, as compared to revenues of $108,401 for the same six-month period of 2005; net income also increased 684% to $183,471 from $23,395 for the same period.
