EXHIBIT 10.7

EMPLOYMENT AGREEMENT

This Employment Agreement (thereafter referred as "Agreement") is made effective
on September 2, 2008, by and between Lucas Energy Inc., a Nevada corporation
(hereinafter referred to as "Lucas," "Company," or "Employer"), and W. A. Sikora
(hereinafter referred to as "Executive").  

WITNESSETH:

WHEREAS, Lucas is engaged in the business of the up-stream oil and gas industry;
and

WHEREAS, Executive is to be employed by Lucas as its President and Chief
Executive Officer, and

WHEREAS, Lucas desires to engage Executive as its President and Chief Executive
Officer; and

WHEREAS, Executive is desirous of accepting employment in such a position
pursuant to the terms and conditions, and for the consideration, hereinafter set
forth;

NOW THEREFORE, for and in consideration of the mutual promises, covenants and
obligations contained herein, Lucas and Executive agree as follows.

ARTICLE 1.
EMPLOYMENT AND DUTIES

1.1

Employment; Effective Date

Effective as of September 2, 2008 (the "Effective Date").

1.2

Position

Lucas hereby agrees to employ Executive, and Executive hereby accepts employment
as Lucas President and Chief Executive Officer upon the terms and conditions
hereinafter set forth, each Party expressly revoking any and all prior
employment agreements to which the Parties may be mutually subject.  As
President and Chief Executive Officer, Executive shall serve Lucas and its
affiliates on a full-time basis subject to the supervision and control of the
Board of Directors (hereinafter referred to as the "Board").  Executive hereby
agrees to serve Lucas in such capacity for the period commencing on the
Effective Date and ending on the Termination of this agreement pursuant to
Section 2.1 below.

1.3

Services of Executive

During the Term of this Agreement (as hereinafter defined), the Executive shall
perform the services hereunder (i) for the compensation set forth herein and
without additional compensation unless otherwise agreed to between Lucas and the
Executive, (ii) in such employment capacity for Lucas or any subsidiary or
affiliate thereof to which he may be directed by the Board of Lucas or of any
such subsidiary or affiliate, or (iii) as a member of the Board of Lucas or of
any subsidiary or affiliate thereof if so elected by the shareholders of Lucas
or any such subsidiary or affiliate.  In that regard, Lucas intends to appoint
the Executive as its representative on the Board of Directors of Lucas and for
each of its subsidiaries which is involved in the service operations and which
report directly to the Executive.  Lucas may also utilize the Executive in any
other work or activity in furtherance of

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the business of Lucas in which his talents may be applied in a manner
commensurate with his position, training, knowledge, skills and abilities.

1.4

Duties and Services

Executive agrees to serve in the position referred to in Section 1.2 and to
perform diligently and to the best of his abilities the duties and services
appertaining to such offices.  Executive shall also perform such other duties
and services appropriate to such position which the parties mutually may agree
upon from time to time.  In addition, Executive agrees to provide such other and
unrelated services and duties as may be mutually agreed upon by Lucas and
Executive.

1.5

Other Interests

Executive agrees, during the period of his employment by Lucas, to devote
substantially all of his business time, energy and best efforts to the business
and affairs of Lucas and its affiliates and not to engage, directly or
indirectly, in any other business or businesses, whether or not similar to that
of Lucas, except with the consent of the Board of Directors of Lucas (the
"Board").  The foregoing notwithstanding, the parties recognize and agree that
Executive may engage in other business activities that do not conflict with the
business and affairs of Lucas or interfere with Executive's performance of his
duties hereunder, which shall be at the sole determination of the Board.

1.6

Duty of Loyalty

.  Executive acknowledges and agrees that Executive owes a fiduciary duty of
loyalty to act at all times in the best interests of Lucas.  In keeping with
such duty, Executive shall make full disclosure to Lucas of all business
opportunities pertaining to Lucas's business and shall not appropriate for
Executive's own benefit business opportunities concerning Lucas's business.

ARTICLE 2.
TERM AND TERMINATION OF EMPLOYMENT

2.1

Term

Unless terminated at an earlier date in accordance with Section 2.2 of this
Agreement, the initial term of Executive's employment hereunder shall be for a
period of two (2) years, commencing on the Effective Date ("Initial Term").
 Thereafter, the term of this Agreement shall be automatically extended for
successive one year periods (each an "Additional Term") unless either party
objects to such extension by written notice to the other party at least one (1)
year prior to end of the Initial Term or any Additional Term.  The Initial Term
and any Additional Terms shall be referred to collectively as the "Term."
 Except for termination pursuant to Section 2.2 below, the Company acknowledges
and agrees that it will not terminate this Agreement during the Initial Term.

2.2

Lucas's Right to Terminate

Notwithstanding the provisions of paragraph 2.1, Lucas shall have the right to
terminate Executive's employment under this Agreement at any time for the
following reasons:

(i)

upon Executive’s death;

(ii)

upon the inability of Executive to perform the essential duties of his position
by reason of illness, physical or mental disability or other incapacity
(specifically excluding Executive's U.S. immigration status) for a period of one
(1) calendar year or any shorter periods aggregating one (1) year in any
two-year period ("Disability"); or

(iii)

for "Cause," which shall mean Executive (A) has engaged in gross negligence or
willful misconduct in the performance of the duties required of him hereunder,
(B) has willfully refused without proper legal reason to perform the duties and
responsibilities required of him hereunder, (C) has breached any material
provision of this Agreement or any material

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corporate policy maintained and established by Lucas that is of general
applicability to the Company's employees and such breach is not cured within
thirty (30) days from the date of receipt of written notice from Employer by
Executive regarding the alleged breach, (D) has willfully engaged in conduct
that he knows or should know is materially injurious to Lucas or any of its
affiliates, or (E) has been convicted of, or pleaded no contest to any felony,
provided, however, that Executive's employment may be terminated for Cause only
if such termination is approved by at least a majority of a quorum (as defined
in Lucas's By-Laws) of the members of the Board after Executive has been given
written notice by Lucas of the specific reason for such termination and an
opportunity for Executive, together with his counsel, to be heard before the
Board.

(iv)

Termination without “cause” at any time, provided the Company provides thirty
(30) days notice or payment in lieu regardless of the age of the contract,
provided, however, that Executive’s employment may be terminated without Cause
only if such termination is approved by at least a majority of a quorum (as
defined in Lucas’s by-Laws) of the members of the Board after Executive has been
given written notice by Lucas regarding termination and an opportunity for
Executive, together with his counsel, to be heard before the Board.

2.3

Key Employee's Rights to Terminate

Notwithstanding the provisions of Sections 2.1 and 2.2, Executive shall have the
right to terminate his employment under this Agreement for any of the following
reasons:

(i)

for "Good Reason," which shall mean, within sixty (60) days of and in connection
with or based upon (A) a material breach by Lucas of any material provision of
this Agreement, (B) a significant reduction in the nature or scope of
Executive's duties and responsibilities, (C) the assignment to Executive of
duties and responsibilities that are materially inconsistent with the position
referred to in Section 1.1, or (D) any requirement that Executive relocate to a
site more than fifty (50) miles from his present business address (unless such
move is within twenty-five (25) miles of Executive's present home address)
provided, however, that prior to Executive's termination for Good Reason,
Executive must give written notice to Lucas of any such breach, reduction,
assignment or requirement and such breach, assignment or requirement must remain
uncorrected for ten (10) days following such written notice; or

(ii)

at any time for any reason whatsoever, in the sole discretion of Executive,
provided that the Executive gives Lucas thirty (30) days written notice.

2.4

Deemed Resignations

Any termination of Executive's employment shall constitute an automatic
resignation of Executive as an officer of Lucas and each affiliate of Lucas, and
an automatic resignation of Executive from the Board (if applicable) and from
the board of directors of any affiliate of Lucas.

2.5

Involuntary Termination After "Change of Control."

   In the event of a "Change of Control" as defined below, Lucas shall have the
right to terminate Executive's employment and this Agreement at will.  Should
Lucas exercise this option to involuntarily terminate Executive during the
pendency of this Agreement for any reason other than as specified in
Section 2.2(iii) within twelve (12) months following a defined Change of
Control, Executive shall be entitled to an immediate cash payment equal in
amount to twelve (12)

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months of compensation based upon a monthly proration of his Form W-2 earning
from Lucas in the year preceding such termination and (ii) the fair value of
eighteen months of Executive's then current fringe benefits provided by
Company..

In the event there is a Change of Control during the pendency of this Agreement,
and Lucas gives Executive notice of intent to not thereafter renew the Agreement
for a successive term, should Executive be involuntarily terminated from
employment after expiration of the Agreement and within twelve (12) months
following the Change of Control, Executive shall be entitled to an immediate
cash payment in the amount set forth in the preceding paragraph.  The
contractual right to such payment is expressly agreed to be a covenant which
shall survive expiration of this Agreement, and be enforceable hereunder.

For purposes of this Agreement, a "Change of Control" shall be deemed to have
taken place if: (i) a third person, including a "group" as determined in
accordance with Section 13(d)(3) of the Securities Exchange Act of 1934, becomes
the beneficial owner of shares of Lucas having forty-five percent (45%) or more
of the total number of votes that may be cast for the election of directors of
Lucas; or (ii) as a result of, or in connection with, any cash tender or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions
(a "Transaction"), the persons who were directors of Lucas before the
Transaction shall cease to constitute a majority of the Board of Lucas or any
successor to Lucas.

ARTICLE 3.
COMPENSATION AND BENEFITS

3.1

Base Salary

During the first twelve month period of the initial term of this Agreement,
Executive shall receive a minimum annual base salary of $125,000 ("Base
Salary").  The Base Salary shall be reviewed and increased by the Board (or a
committee or designee thereof) after the first twelve (12) months of employment.
Such increase shall be not less than $50,000.  Thereafter, Executive's annual
Base Salary shall be reviewed by the Board (or a committee or designee thereof)
on an annual basis from the Effective Date (or more frequently, should the Board
decide to do so), and, in the sole discretion of the Board (or such committee or
designee thereof), such annual Base Salary may be increased, but not decreased,
effective as of any date determined by the Board.  Executive's annual base
salary shall be paid in equal installments, less amounts for withholding of
taxes or the amounts pursuant to Section 6.2 below, in accordance with Lucas's
standard policy regarding payment of compensation to employees but no less
frequently than monthly.

3.2

Bonuses

Executive shall be eligible to participate in Lucas's Bonus Plan and Lucas's
Long Term Incentive Compensation Program as approved from time to time by the
Board (or a committee or designee thereof).

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3.3

Issuance of Restricted Stock and Stock Options

  :

(i)

Issuance of Restricted Stock from previous CEO:  James Cerna will grant 19,230
of his personal shares to Executive.  Grant schedule will be agreed upon between
the Executive and Mr. Cerna

(ii)

Issuance of Nonqualified Stock Options:  Lucas will grant 200,000 stock options
based on the price at the time of this agreement 9-2-08 ($2.60).  Company shall
provide, pursuant to an Executive Stock Option Plan with a 2 year term to be
implemented by Company, stock options with vesting as set forth on below.

(i)

3-1-09 : 50,000 shares

9-1-09:  50,000 shares

3-1-10:  50,000 shares

9-1-10:  50,000 shares

(iii)

Except for termination of this Agreement for cause pursuant to Section 2.2(iii),
any termination of this Agreement by Company shall cause the immediate vesting
of any unvested restricted stock, options or warrants awarded hereunder or
pursuant to any future award by Company to Executive.

Further stock and stock option allocations awards will be based on a combination
of the performance of Executive and Lucas.  

3.4

Other Perquisites

During his employment hereunder, Executive shall be afforded the following
benefits as incidences of his employment.

(i)

Vacation:  Executive shall be entitled to ten (10) business days of paid
vacation for each calendar year of employment beginning on August 26, 2008 of
Executive's employment.  Such vacation must be taken at a time mutually
convenient to Lucas and Executive.  All vacation days must be taken during the
year it is earned and cannot be carried forward into a future year without the
written consent of Lucas, which will not be unreasonably withheld.

(ii)

Personal Leave:  Executive shall be entitled to five (5) days paid time each
fiscal year effective from April 15, 2007.  Unused personal leave benefits
cannot be carried forward into a future year without the written consent of
Lucas.  The following rule shall apply:

If Executive is unable to work for more than five (5) days because of personal
business, and if Executive's unused personal leave is insufficient for such
period, the Executive's unused vacation time shall be applied to such absence.

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(iii)

Holidays:  Executive shall be entitled to holidays with pay during each calendar
year in accordance with Lucas's posted holiday schedule.

(iv)

Other Company Benefits:  Executive and, to the extent applicable, Executive's
spouse, dependents and beneficiaries, shall be allowed to participate in all
benefits, plan, and programs, including improvements or modifications of the
same, which are now, or may hereafter be, available to other employees of Lucas.
 Such benefits, plans and programs shall include, without limitation, any profit
sharing, thrift plan, life insurance, disability insurance, pension plan
(company supported), supplemental retirement plan, vacation and sick leave plan,
and the like which may be maintained by Lucas.  Lucas shall not, however, by
reason of this paragraph be obligated to institute, maintain, or refrain from
changing, amending or discontinuing, any such benefit plan or program, so long
as such changes are similarly applicable to employees generally.

3.5

Business and Entertainment Expenses

Subject to Lucas's standard policies and procedures with respect to
reimbursement as applied to its employees generally, Lucas shall promptly
reimburse Executive for, or pay on behalf of Executive, reasonable and
appropriate expenses incurred by Executive for business related purposes,
including travel, dues and fees to industry and professional organizations,
subscriptions to professional and business publications, costs of entertainment
and business development, and mobile phone expenses.

3.6

Directors Fees.  Executive shall be granted the appropriate directors fees and
stock grants as determined by the compensation committee.

ARTICLE 4.
MISCELLANEOUS

4.1

Notices

All notices required or permitted under this Agreement shall be in writing and
shall be deemed delivered when delivered in person or deposited in the United
States mail, postage paid, addressed as follows:

If to the Company

 

To:

Lucas Energy, Inc.

ATTN: Peter Grunebaum, Chairman Compensation Committee, and Dieterich & Mazarei,
Legal Counsel

3000 Richmond Ave, Suite 400

Houston, TX 77098

  

If to Executive

 

To:

W.A. Sikora

9595 Doliver Drive

Houston, TX 77063

  

Such addresses may be changed from time to time by either party providing
written notice in the manner set forth above.

4.2

Applicable Law

This agreement is entered into under, and shall be governed for all purposes by,
the laws of the State of Texas.

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4.3

No Waiver

No failure by either party hereto at any time to give notice of any breach by
the other party of or to require compliance with, any condition or provision of
this Agreement shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.

4.4

Severability

If a court of competent jurisdiction determines that any provision of this
Agreement is invalid or unenforceable, then the invalidity or unenforceability
of that provision shall not affect the validity or enforceability of any other
provision of this Agreement, and all other provisions shall remain in full force
and effect.

4.5

Counterparts

This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all of which together will constitute one and
the same Agreement.

4.6

Withholding of Taxes and Other Employee Deductions

Lucas may withhold from any benefits and payments made pursuant to this
Agreement all federal, state, city and taxes as may be required pursuant to any
law or governmental regulation or ruling and all other normal employee
deductions made with respect to Lucas's employees generally.

4.7

Headings

The paragraph headings have been inserted for purposes of convenience and shall
not be used for interpretive purposes.

4.8

Gender and Plurals

Wherever the context so requires, the masculine gender includes the feminine or
neuter, and the singular number includes plural and conversely.

4.9

Affiliate

As used in this Agreement, the term "affiliate" shall mean any entity which owns
or controls, is owned or controlled by, or is under common ownership or control
with Lucas.

4.10

Assignment

This Agreement shall be binding upon and inure to the benefit of Lucas and any
successor of the Company, by merger or otherwise.  Except as provided in the
preceding sentence, this Agreement, and the rights and obligations of the
parties hereunder, are personal and neither this Agreement, nor any right,
benefit, or obligation of either party hereto, shall be subject to voluntary or
involuntary assignment, alienation or transfer, whether by operation of law or
otherwise, without the prior written consent of the other party.

4.11

Term

This Agreement has a term co-extensive with the term of employment provided in
Section 2.1.  Termination shall not affect any right or obligation of any party
that is accrued or vested prior to such termination.

4.12

Entire Agreement

Except as specifically referenced herein, this Agreement constitutes the entire
agreement of the parties with regard to the subject matter hereof, and contains
all the covenants, promises, representations, warranties and agreements between
the parties with respect to employment of Executive by Lucas.  Without limiting
the scope of the preceding sentence, all understandings and agreements preceding
the date of execution of this Agreement and relating to the subject matter
hereof are hereby null and void and of no further force and effect.  Any
modifications or amendments will be made in writing and signed by both parties
and will form part of this agreement.

[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the 2nd
day of September, 2008, to be effective as of the Effective Date.

EMPLOYER:
Lucas Energy, Inc.

[leiexhibit107001.jpg] [leiexhibit107001.jpg]

By:  CEO James J Cerna

EXECUTIVE:

By:

______________________________

W.A. Sikora

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