Lucas Energy Inc. said one of its subsidiaries has secured a $1 million loan, which it will use to participate in drilling and completing a pair of wells in the Eagle Ford Shale.

Meanwhile, shareholders in the Houston-based company met at a special meeting Tuesday and approved the purchase of working interests (WI) in certain oil and natural gas properties from Segundo Resources and other sellers, and voted in favor of five proposals to collectively issue more than 13 million shares of common stock to finance the acquisitions.

According to an 8-K filed Thursday with the U.S. Securities and Exchange Commission (SEC), Lucas’s wholly-owned subsidiary, CATI Operating LLC, borrowed $1 million from its senior lender, Louise Rogers, as evidenced through a promissory note. The loan has an interest rate of 12% per annum and matures on or before Nov. 9.

Pursuant to the terms of the promissory note, 80% of the cash generated by CATI is to first be paid toward the loan, with the remaining 20% available for leasing and other operating expenses and capital expenditures, as approved by Rogers’s designated representatives. In a statement Thursday, Lucas said CATI will use the funds to participate in the drilling and completion of two wells under a joint operating agreement (JOA) with Lonestar Resources Inc. CATI has an 8% WI in two wells: the Cyclone #9H and #10H.

“This represents another step in the growth and expansion of our assets and our company. It is anticipated that the wells will enhance our reserve portfolio and production in addition to securing the leaseholds of the locations,” said Lucas CEO Anthony Schnur.

The JOA with Lonestar covers more than 1,450 gross acres. Lucas’s participation will vary from an 8-14% WI in the units.

Last December, Lucas announced that it was entering the Midcontinent after acquiring assets from 21 separate sellers (see Shale Daily, Dec. 31, 2015). The acquisition includes WI in producing properties and undeveloped acreage, mainly in Central Oklahoma’s Hunton formation.

According to a Schedule 14A Lucas filed with the SEC in July, shareholders approved the issuance of 13,009,664 shares of common stock to the sellers, plus 552,000 shares of Series B Preferred Stock to one of the sellers and its affiliate.

The 14A said the assets include WI in producing properties and undeveloped acreage in Texas and Oklahoma, including varied interests in two largely contiguous acreage blocks in the liquids-rich Midcontinent, plus related wells, leases, records, equipment and agreements and producing shale properties in Glasscock County, TX. Production from the acquired assets totaled about 1,000 net boe/d, of which 53% are liquids from 114 producing wells. The bulk of the production is from approximately 43,000 gross (9,900 net) acres in the Hunton formation.

“Obtaining shareholder approval for the purchase agreement and financial transactions was a critical step toward closing the pending acquisition of producing properties and undeveloped acreage in Texas and Oklahoma,” Schnur said. “We view the special shareholder meeting’s approval as a sign of shareholder support for our strategy of expanding the company’s scale and strengthening its financial flexibility.”

Although Lucas had planned to change its name to Camber Energy, the name change proposal did not receive the required majority vote of more than 50% at the special meeting. The company said it plans to resubmit the idea for another shareholder vote sometime in the future, more than likely at the annual shareholder meeting expected to be held in March 2017.