Ladies and Gentlemen, today we bring to you one of the most unique AND also profitable energy plays we’ve come across in quite some time.

Lucas Energy Inc. (OTCBB: LUCE), a Houston-based independent oil and gas organization with approximately 34 properties, has posted seven consecutive quarters of profits, executed eight strategic acquisitions over roughly the past seven months, and seen its 4th quarter net income and profits grow by 310% and 234% respectively over the same time period during ’05.

So how is Lucas Energy Inc. any different than all of the other big Texas energy plays?

Well, by developing an extremely effective proprietary evaluation technology that allows the company to exploit undervalued properties housing proven oil & gas reserves (all acquired properties hold a minimum of between 30%-50% of their total historical reserve).

Obviously a company notching seven consecutive quarters of profitability (basically since its financial inception), with significant revenues ($910,788 for 9 month period ending 12/31/06) is a lean, mean fighting machine, but these guys seem to have really found their niche.

By staying profitable and leaving cash in the bank, the company intelligently stays away from auctions and multi-million dollar loans and leverages its gold old Texas connections to broker deals with local land owners.

Please keep in mind that the maximum expenditure allowed for strategic acquisitions is $250K and that LUCE only bids on mature properties with significant proven existent reserves. The economics here just make sense. Operating with a gross margin right around 80% for the past three quarters, Lucas Energy obtains an average ROI of just 12 months for its newly acquired properties.

After tuning into a recent CEO interview from smallcapvoice.com we learned that cost’s associated with each strategic acquisition break down as follows:

$60,000 – Pump equipment
$90,000 – In-ground Development (i.e. use of proprietary technology to find correct drill spots)
$100,000 – Drilling, cleaning, etc

At $50 dollars per barrel, the company is able to achieve, as stated above, an average ROI of 12 months. According to LUCE, only new equipment is used for drilling and excavating, which leads to less downtime and increased productivity. In addition, the company’s strict management team assures that the majority of cash generated from sales is used to fund new ventures that will positively impact the bottom line.

By focusing on mature, underdeveloped gas & oil properties, often overlooked by industry giants, Lucas Energy is quickly building a formidable presence in the U.S. energy market. Although a current price of $2.63 may be alarming to some readers, we feel that current levels are indeed something to be excited about.

James J. Cerna, Chief Executive Officer recently stated that ``Our expectation is that production from the existing portfolio will easily generate $2.25 - 2.75 million in oil revenues for the 2007 calendar year.'' By our accounts, if LUCE is able to execute even a small fraction of the acquisitions it did in ’06, revenues and profits could be again off the charts.