Private Equity Strategies

Lucas Energy Ventures: Upstream Oil & Gas Private Equity

Lucas Capital Management as a firm has focused on investing in oil, gas and the broader energy spectrum since 1996. Lucas Energy Ventures was formed in 2004, and since that time LCM has raised and invested three institutional oil and gas private equity funds, Lucas Energy Ventures I, II, and III (the LEV Funds). We have a breadth of oil and gas experience, including production operations, drilling and completing wells, overseeing construction projects relating to facilities, reservoir valuation, auditing and engineering, significant transactional work, company management and managing oil and gas assets as investor, operator and capital provider. The LEV Funds invest through portfolio companies and alongside trusted operating partners who possess local knowledge and experience within key regions of North America.

Our understanding of the critical activities involved in making oil & gas investments work is a key driver of success. This understanding aids our efforts in helping managers design teams for each asset and to manage its investments. We seek to procure the right assets, engage the right operating teams and design the right investment structures to facilitate our investment objectives.

A significant component of our investment strategy is acquiring producing properties and reinvesting cashflow to enhance the value of assets through drilling, recompletions, workovers, implementation of operational efficiencies and other projects as appropriate. Drilling focuses on developing proved reserves, but also includes low to moderate risk exploration. We do not operate wells or facilities. Where the investment opportunity includes operating rights we typically invest through portfolio companies. Where the investment opportunity is pure non-operating interests, we typically invest in direct ownership alongside trusted operating partners.

Investments are primarily structured in two ways:

1) Controlling Equity — equity investments with appropriate incentive structures for management teams, and

2) Direct Working Interest non-operated working interest alongside trusted operating partners.

The structuring decision is dictated by the character of the underlying asset and the needs of the portfolio company or operating partner, but our investment objectives, governance objectives and time horizon remain the consistent. The Investment Committee manages each investment decision through multiple stage gates to ensure capital discipline before the initial investment decision, as well as after, to limit exposure to unsuccessful projects and increase allocations to successful projects as appropriate. We welcome the opportunity to speak with you regarding your capital needs.