U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                Quarterly Report Under Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                     For the Period ended September 30, 2006

                         Commission File Number 0-51414


                               LUCAS ENERGY, INC.
                 (Name of small business issuer in its charter)


           NEVADA                                               98-0417780
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                           Identification Number)


                         3000 Richmond Avenue, Suite 400
                                Houston, TX 77040
                    (Address of principal executive offices)


                                 (713) 528-1881
                     (Telephone number, including area code)


                               James J. Cerna, Jr.
                              520 S. El Camino Real
                                   Suite #432
                               San Mateo, CA 94402
                    Phone: (650) 343-4535 Fax: (650) 240-0259
            (Name, address and telephone number of agent for service)

Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [ ]

There were 27,540,013 shares of Common Stock issued and outstanding as of
October 30, 2006.
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying balance sheets of Lucas Energy, Inc. at September 30, 2006 and
March 31, 2006, and the related statements of operations, stockholders' equity
and cash flows for the three and six months ending September 30, 2006 and 2005,
have been prepared by our management in conformity with United States generally
accepted accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the three and six months ended September
30, 2006, are not necessarily indicative of the results that can be expected for
the fiscal year ending March 31, 2007.

                                       1
<PAGE>
                               LUCAS ENERGY, INC.
                                 Balance Sheet

<TABLE>
<CAPTION>
                                                                           September 30,         March 31,
                                                                               2006                2006
                                                                            ----------          ----------
                                                                           (Unaudited)
<S>                                                                         <C>                 <C>
                                     ASSETS
CURRENT ASSETS
  Cash                                                                      $  437,480          $   59,232
  Oil and gas receivable                                                       149,429              30,222
  Other current assets                                                          10,167               8,614
                                                                            ----------          ----------
      Total Current Assets                                                     597,076              98,068
                                                                            ----------          ----------
OIL AND GAS PROPERTIES, full cost method
  Costs  subject to amortization                                               259,223              61,255
  Costs not subject to amortization                                          3,900,728             531,197
                                                                            ----------          ----------

      Oil and Gas Properties, net                                            4,159,951             592,452
                                                                            ----------          ----------
OTHER ASSETS
  Long-term deposits and bonds                                                  53,141              30,266
                                                                            ----------          ----------

      Total Other Assets                                                        53,141              30,266
                                                                            ----------          ----------

TOTAL ASSETS                                                                $4,810,168          $  720,786
                                                                            ==========          ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued expenses                                     $  213,253          $   42,045
  Income taxes payable                                                          86,030               4,845
                                                                            ----------          ----------

      Total Current Liabilities                                                299,283              46,890
                                                                            ----------          ----------
NON-CURRENT LIABILITIES
  Note payable                                                               2,300,000             125,000
                                                                            ----------          ----------

      Total Liabilities                                                      2,599,283             171,890
                                                                            ----------          ----------
STOCKHOLDERS' EQUITY
  Preferred stock- March 31, 2006, series A; 1,666,667 shares authorized
    of $0.01 par value, 344,250 shares issued and outstanding;                     344
    September 30, 2006, 10,000,000 shares authorized of $0.001 par
    value, no shares outstanding                                                    --
  Common stock- March 31, 2006,10,000,000 shares authorized of
     $0.001 par value,8,000,000 shares issued and outstanding;                   8,000
     September 30, 2006, 100,000,000 shares authorized of $0.001 par
     value, 27,540,013 shares issued and outstanding                            27,540
  Additional paid-in capital                                                 1,937,558             478,236
  Retained earnings                                                            245,787              62,316
                                                                            ----------          ----------

      Total Stockholders' Equity                                             2,210,885             548,896
                                                                            ----------          ----------

TOTAL LIABILITIES AND STOCKHOLDERS'  EQUITY                                 $4,810,168          $  720,786
                                                                            ==========          ==========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       2
<PAGE>
                               LUCAS ENERGY, INC.
                                Income Statements
                                   (Unaudited)

<TABLE>
<CAPTION>
                                  For the Three     For the Three     For the Six      From Inception on
                                  Months Ended      Months Ended      Months Ended       April 6, 2005
                                  September 30,     September 30,     September 30,   Through September 30,
                                      2006              2005              2006                2005
                                  ------------      ------------      ------------        ------------
<S>                               <C>               <C>               <C>                 <C>
REVENUES
  Oil and gas revenues            $    401,063      $     94,703      $    514,421        $    108,401
  Consulting services                   34,000                --            34,000                  --
                                  ------------      ------------      ------------        ------------

      Total Revenues                   435,063            94,703           548,421             108,401

  Lease operating expenses              65,719            37,597           104,800              40,055
  Depreciation and depletion           106,360            19,941           127,818              21,699
                                  ------------      ------------      ------------        ------------

      Gross Profit                     262,984            37,165           315,803              46,647
                                  ------------      ------------      ------------        ------------
EXPENSES
  Professional fees                      7,957                --            14,308                 785
  General and administrative            41,343            11,073            67,356              17,578
                                  ------------      ------------      ------------        ------------

      Total Expenses                    49,300            11,073            81,664              18,363
                                  ------------      ------------      ------------        ------------

INCOME FROM OPERATIONS                 213,684            26,092           234,139              28,284
                                  ------------      ------------      ------------        ------------
OTHER EXPENSES
  Sale of assets                            --                --            81,534                  --
  Interest income                        2,546                 6             4,160                  11
  Interest expense                     (52,082)           (1,547)          (55,176)             (1,547)
                                  ------------      ------------      ------------        ------------

      Total Other Expenses             (49,536)           (1,541)           30,518              (1,536)
                                  ------------      ------------      ------------        ------------

NET INCOME BEFORE INCOME TAXES         164,148            24,551           264,657              26,748

INCOME TAX EXPENSE                      43,942             3,318            81,186               3,353
                                  ------------      ------------      ------------        ------------

NET INCOME                        $    120,206      $     21,233      $    183,471        $     23,395
                                  ============      ============      ============        ============

BASIC INCOME PER SHARE            $       0.00      $       0.00      $       0.01        $       0.00
                                  ============      ============      ============        ============

FULLY DILUTED INCOME PER SHARE    $       0.00      $       0.00      $       0.01        $       0.00
                                  ============      ============      ============        ============
WEIGHTED AVERAGE NUMBER
 OF SHARES OUTSTANDING              27,450,562        23,780,011        27,358,961          23,780,011
                                  ============      ============      ============        ============
FULLY DILUTED AVERAGE NUMBER
 OF SHARES OUTSTANDING              27,450,562        23,780,011        27,358,961          23,780,011
                                  ============      ============      ============        ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>
                               LUCAS ENERGY, INC.
                       Statements of Stockholders' Equity
                                   (Unaudited)

<TABLE>
<CAPTION>
                                              Preferred Stock             Common Stock        Additional
                                            -------------------       --------------------      Paid-In      Retained
                                            Shares       Amount       Shares        Amount      Capital      Earnings
                                            ------       ------       ------        ------      -------      --------
<S>                                        <C>          <C>         <C>            <C>        <C>            <C>
Balance at inception on April 6, 2005            --       $  --            --      $    --    $        --    $     --

Common shares issued for cash at
 $0.01 per share                                 --          --     5,200,000        5,200         49,800          --

Common shares issued for cash
 paid for  oil leases at $0.08 per share         --          --     2,800,000        2,800        222,230          --

Preferred shares issued for cash at
 $0.60 per share                            325,000         325            --           --        194,675          --

Preferred shares issued for services
 rendered at $0.60 per share                 19,250          19            --           --         11,531          --

Net income for the period from
 inception on April 6, 2005 through
 March 31, 2006                                  --          --            --           --             --      62,316
                                          ---------       -----    ----------      -------    -----------    --------

Balance, March 31, 2006                     344,250         344     8,000,000        8,000        478,236      62,316

Recapitalization                           (344,250)       (344)   17,340,013       17,340        (16,996)         --

Common shares issued for cash at
 $0.50 per share                                 --          --     1,980,000        1,980        988,020          --

Stock issuance costs                             --          --            --           --        (61,482)         --

Common shares issued for wells at                --          --       220,000          220        549,780
 $2.50 per share

Net income for the six months ended
 September 30, 2006                              --          --            --           --             --     183,471
                                          ---------       -----    ----------      -------    -----------    --------

Balance, September 30, 2006               $      --       $  --    27,540,013      $27,540    $ 1,937,558    $245,787
                                          =========       =====    ==========      =======    ===========    ========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>
                               LUCAS ENERGY, INC.
                            Statements of Cash Flows
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                For the Six          From Inception on
                                                                Months Ended           April 6, 2005
                                                                September 30,       Through September 30,
                                                                    2006                    2005
                                                                -----------             -----------
<S>                                                             <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                    $   183,471             $    23,395
  Adjustments to reconcile net loss to net cash
   used by operating activities:
     Preferred stock issued for services                                 --                  11,550
     Depreciation and depletion                                     127,818                  21,699
     Gain on sale of assets                                         (81,534)                     --
  Changes in operating assets and liabilities
     Increase in accounts receivable                               (119,207)                (43,607)
     Increase in other current assets                                (1,553)                 (8,614)
     Increase in other assets                                       (22,875)                 (2,866)
     Increase in accounts payable and accrued expenses              252,393                  17,914
                                                                -----------             -----------

         Net Cash Provided by Operating Activities                  338,513                  19,471
                                                                -----------             -----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Sale of operating interest                                        302,975                      --
  Purchase of property and equipment                             (3,366,758)               (668,457)
                                                                -----------             -----------

         Net Cash Used by Investing Activities                   (3,063,783)               (668,457)
                                                                -----------             -----------
CASH FLOWS FROM FINIANCING ACTIVITIES
  Proceeds from the sale of common stock                            990,000                 280,030
  Proceeds from the sale of preferred stock                              --                 140,000
  Proceeds from notes payable                                     2,300,000                 275,000
  Repayment of note payable                                        (125,000)                     --
  Payment of stock offering costs                                   (61,482)                     --
                                                                -----------             -----------

         Net Cash Provided by Financing Activities                3,103,518                 695,030
                                                                -----------             -----------

NET INCREASE IN CASH                                                378,248                  46,044

CASH AT BEGINNING OF PERIOD                                          59,232                      --
                                                                -----------             -----------
CASH AT END OF PERIOD                                           $   437,480             $    46,044
                                                                ===========             ===========

SUPPLIMENTAL DISCLOSURES OF CASH FLOW INFORMATION

  CASH PAID FOR:
    Interest                                                    $        --             $        --
    Income Taxes                                                $        --             $        --

  NON-CASH FINANCING ACTIVITIES
    Preferred stock issued for services                         $        --             $    11,550
    Common stock issued for wells                               $   550,000             $        --
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>
                                LUCAS ENERGY INC.
                     (Formerly Panorama Investments, Corp.)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2006


1. BASIS OF PRESENTATION

The unaudited financial information furnished herein reflects all adjustments,
which in the opinion of management are necessary to fairly state the Company's
financial position and the results of its operations for the periods presented.
This report on Form 10-QSB should be read in conjunction with the Company's
financial statements and notes thereto included in the Company's Form 10-KSB for
the fiscal year ended March 31, 2006. The Company assumes that the users of the
interim financial information herein have read or have access to the audited
financial statements for the preceding fiscal year and that the adequacy of
additional disclosure needed for a fair presentation may be determined in that
context. Accordingly, footnote disclosure, which would substantially duplicate
the disclosure contained in the Company's Form 10-KSB for the fiscal year ended
November 30, 2005, has been omitted. The results of operations for the three and
six month periods ended September 30, 2006 are not necessarily indicative of
results for the entire year ending March 31, 2007.

2. NATURE OF OPERATIONS

a) Organization

The Company was incorporated in the State of Nevada, U.S.A., on December 16,
2003. The Company's principal offices are in Houston, Texas. Lucas Energy, Inc.
("the Subsidiary") was originally incorporated in the State of Nevada on April
6, 2005 for the purpose of acquiring and operating certain oil and gas leases in
the state of Texas. Currently, the Company operates fifteen separate oil and gas
leases. In conjunction with the acquisition of the Subsidiary, the Company
changed its fiscal year end to March 31. The shareholders of the Subsidiary
became the controlling shareholders of the Company, accordingly the acquisition
of the Subsidiary was accounted for as a reverse merger whereby the historical
financial statements are presented as the financial statements of the Company.

b) Development Stage Activities

Prior to the acquisition of Lucas Energy, Inc., the Company was classified as a
development stage enterprise.

3. SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States. Because a precise
determination of many assets and liabilities is dependent upon future events,
the preparation of financial statements for a period necessarily involves the
use of estimates which have been made using careful judgment.

The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:

                                       6
<PAGE>
                                LUCAS ENERGY INC.
                     (Formerly Panorama Investments, Corp.)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2006


3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

a) Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses for the reporting period. Actual
results could differ from these estimates.

b) Financial Instruments

The Company's financial instruments consist of cash, and accounts payable and
accrued liabilities. Unless otherwise noted, it is management's opinion that
this Company is not exposed to significant interest or credit risks arising from
these financial instruments. The fair value of these financial instruments
approximate their carrying values, unless otherwise noted.

c) Foreign Currency Translation

The Company's functional currency is the U.S. dollar. Transactions in foreign
currency are translated into U.S. dollars as follows:

     i)   monetary items at the rate prevailing at the balance sheet date;
     ii)  non-monetary items at the historical exchange rate;
     iii) revenue and expense at the average rate in effect during the
          applicable accounting period.

d) Basic and Diluted Loss Per Share

Basic loss per share is calculated using the weighted average number of shares
issued and outstanding during the year. Diluted loss per share is calculated
using the treasury stock method.

e) New Accounting Standards

Management does not believe that any recently issued, but not yet effective,
accounting standard, if currently adopted, could have a material effect on the
accompanying financial statements.

                                       7
<PAGE>
                                LUCAS ENERGY INC.
                      (Formerly Panorama Investment Corp.)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2006


4. SIGNIFICANT EVENTS

ACQUISITION AND SHARE EXCHANGE AGREEMENT:

On May 19, 2006, the Company entered into an Acquisition and Share Exchange
Agreement (the "Acquisition Agreement"), pursuant to which the Company acquired,
through an exchange transaction, all of the issued and outstanding capital stock
of privately held, Lucas Energy Resources, Inc., formerly known as Lucas Energy,
Inc. ("Lucas Energy Resources"), from Lucas Energy Resources' shareholders.
Lucas Energy is an independent oil and gas company that is building a
diversified portfolio of oil and gas assets in the United States. The
transaction was contingent upon the satisfaction of certain circumstances,
including the issuance and transfer of certain of the Company's shares to the
former Lucas Energy Resources shareholders and completion of certain corporate
actions by both companies and their shareholders. The terms of the Acquisition
Agreement were satisfied and the transaction was completed on June 16, 2006. In
conjunction with the transaction, the Company has amended its Articles of
Incorporation to change the Company's name, has forward split it common stock on
a 2.4 to 1 ratio, and has changed its trading symbol on the OTC-BB to "LUCE".

The terms of the Acquisition Agreement required that of all of the Lucas Energy
Resources shareholders agree to exchange their shares, including preferred and
common classes, for an aggregate of 21,800,011 (forward split adjusted) of the
Company's common shares in a specified Closing Transaction which occurred June
13, 2006. The transaction required transfer of 2,640,000 outstanding "control"
shares to Lucas Energy Resources' private shareholders and required the issuance
of an additional 19,160,011 shares to Lucas Energy Resources' private
shareholders, for a total new issuance relating to the transaction of 21,800,011
common shares.

In May 2006, the Company completed a private placement of 1,980,000 shares of
its common stock at $0.50 per share for gross cash proceeds of $990,000.

In August 2006, the Company issued 220,000 shares of its common stock valued at
$2.50 per share for interests in 9 oil properties.

                                       8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION RESULTS OF
        OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2006

We realized revenues of $435,063 for the quarter. $401,063 was from the sale of
oil and gas during the quarter ended September 30, 2006 compared to $94,703 in
the same quarter of 2005. Similarly, we incurred lease operating expenses of
$65,719 during the quarter ended September 30, 2006 compared to $37,597 for the
same quarter of 2005. In 2006, we recorded depreciation and depletion expense of
$106,360 for our oil production compared to $19,941 in 2005. During the quarter
we realized consulting income of $34,000 while we had no consulting income in
2005.

We incurred operating expenses of $49,300 for the three month period ended
September 30, 2006 compared to $11,073 for the corresponding quarter of 2005.
These expenses consisted of general operating expenses incurred in connection
with the day to day operation of our oil production business and the preparation
and filing of our periodic reports. The increase relates to our acquisition of
additional oil properties subsequent to September 30, 2005. We expect our
revenues and well operating expenses to continue to grow as we repair and
improve the wells we have purchased.

Our net income from operations for the three months ended September 30, 2006 was
$120,206. Our income from operations for the three months ended September 30,
2005 was $21,233. The increase relates to our acquisition of additional oil
properties subsequent to September 30, 2005.

SIX MONTHS ENDED SEPTEMBER 30, 2006

We realized revenues of $514,421 from the sale of oil and gas during the half
year ended September 30, 2006 compared to $108,401 in the same period of 2005.
We started operations on April 6, 2005. Similarly, we incurred lease operating
expenses of $104,800 during the six months ended September 30, 2006 compared to
$40,055 for the same period of 2005. In 2006, we recorded depreciation and
depletion expense of $127,818 for our oil production compared to $21,699 in
2005. During the quarter we realized consulting income of $34,000 while we had
no consulting income in 2005. We expect our revenues and well operating expenses
to continue to grow as we repair and improve the wells we have purchased.

We incurred operating expenses of $81,664 for the six month period ended
September 30, 2006 compared to $18,363 for the corresponding six months of 2005.
These expenses consisted of general operating expenses incurred in connection
with the day to day operation of our oil production business and the preparation

                                       9
<PAGE>
and filing of our periodic reports. The increase relates to our acquisition of
additional oil properties subsequent to September 30, 2005.

Our net income from operations for the six months ended September 30, 2006 was
$183,471. Our income from operations for the six months ended September 30, 2005
was $23,395. The increase relates to our acquisition of additional oil
properties subsequent to September 30, 2005.

We also recorded a gain on the sale of oil properties of $81,534 during the six
months ended September 30, 2006. We had no such gain in the corresponding period
of 2005.

LIQUIDITY AND CAPITAL RESOURCES

We realized cash from operations of $338,513 during the six months ended
September 30, 2006 compared to cash provided of $19,471 during the six months
ended September 30, 2005.

We used $3,366,758 of our cash to purchase oil properties during the six months
ended September 30, 2005 compared to $668,457 for the same period in 2006. We
received cash of $302,975 from the sale of oil properties in 2006 compared to
$-0- for the same period of 2005.

We received cash of $280,030 from the sale of shares of our common stock in
September 30, 2005 quarter compared to $990,000 in the 2006 quarter. We borrowed
$2,300,000 in 2006 compared to the $275,000 borrowed in 2005. We used $125,000
to repay notes payable during the September 30, 2006 six months.

We expect our current cash balance of $437,480 at September 30, 2006 to satisfy
our cash requirements for the next 12 months. We expect to be able to satisfy
our cash requirements for at least the next twelve months without having to
raise additional funds or seek bank loans. However, if we identify additional
oil and gas projects that we want to purchase, we may choose to raise additional
monies through sales of our equity securities or through loans from banks or
third parties to make the acquisitions.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements.

MILESTONES OF BUSINESS OPERATIONS

On May 19, 2006, Lucas Energy, Inc., formerly known as, Panorama Investments,
Corp. (the "Company" or "Lucas Energy") entered into an Acquisition and Share
Exchange Agreement (the "Acquisition Agreement"), pursuant to which the Company
has acquired, through an exchange transaction, all of the issued and outstanding

                                       10
<PAGE>
capital stock of privately held, Lucas Energy Resources, Inc., formerly known as
Lucas Energy, Inc. ("Lucas Energy Resources"), from Lucas Energy Resources'
shareholders. Lucas Energy is an independent oil and gas company that is
building a diversified portfolio of oil and gas assets in the United States. The
transaction was contingent upon the satisfaction of certain circumstances,
including the issuance and transfer of certain Lucas Energy shares to the former
Lucas Energy Resources shareholders and completion of certain corporate actions
by both companies and their shareholders. The terms of the Acquisition Agreement
were satisfied and the transaction was completed on June 16, 2006. In
conjunction with the transaction, Lucas Energy, Inc., has Amended its Articles
of Incorporation to change the Company's name, has forward split it common stock
on a 2.4 to 1 ratio, and has changed its trading symbol on the OTC-BB to "LUCE".

The terms of the Acquisition Agreement required that of all of the Lucas Energy
Resources shareholders agree to exchange their shares, including preferred and
common classes, for an aggregate of 21,800,011 (forward split adjusted) Lucas
Energy common shares in a specified Closing Transaction which occurred June 13,
2006. The transaction required transfer of 2,640,000 outstanding "control"
shares to Lucas Energy Resources' private shareholders and required the issuance
of an additional 19,160,011 shares to Lucas Energy Resources' private
shareholders, for a total new issuance relating to the transaction of 21,800,011
common shares.

CRITICAL ACCOUNTING POLICIES

The unaudited financial statements as of September 30, 2006 included herein have
been prepared without audit pursuant to the rules and regulations of the U.S.
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with general
accepted accounting procedures have been condensed or omitted pursuant to such
rules and regulations. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. It is suggested that these financial statements be read in
conjunction with our November 30, 2005 audited financial statements and notes
thereto, which can be found in our Form 10K-SB filing on the SEC website at
www.sec.gov under our SEC File Number 0-51414.

The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States. Because a precise
determination of many assets and liabilities is dependent upon future events,

                                       11
<PAGE>
the preparation of financial statements for a period necessarily involves the
use of estimates which have been made using careful judgment.

The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:

a) Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses for the reporting period. Actual
results could differ from these estimates.

b) Financial Instruments

The Company's financial instruments consist of cash, and accounts payable and
accrued liabilities. Unless otherwise noted, it is management's opinion that
this Company is not exposed to significant interest or credit risks arising from
these financial instruments. The fair value of these financial instruments
approximate their carrying values, unless otherwise noted.

c) Foreign Currency Translation

The Company's functional currency is the U.S. dollar. Transactions in foreign
currency are translated into U.S. dollars as follows:

     i)   monetary items at the rate prevailing at the balance sheet date;
     ii)  non-monetary items at the historical exchange rate;
     iii) revenue and expense at the average rate in effect during the
          applicable accounting period.

d) Basic and Diluted Loss Per Share

Basic loss per share is calculated using the weighted average number of shares
issued and outstanding during the year. Diluted loss per share is calculated
using the treasury stock method.

e) New Accounting Standards

Management does not believe that any recently issued, but not yet effective,
accounting standard, if currently adopted, could have a material effect on the
accompanying financial statements.

                                       12
<PAGE>
FORWARD LOOKING STATEMENTS

Some of the statements contained in this Form 10-QSB that are not historical
facts are "forward-looking statements" which can be identified by the use of
terminology such as "estimates," "projects," "plans," "believes," "expects,"
"anticipates," "intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to be cautious of
the forward-looking statements, that such statements, which are contained in
this Form 10-QSB, reflect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No assurances can be
given regarding the achievement of future results, as actual results may differ
materially as a result of the risks we face, and actual events may differ from
the assumptions underlying the statements that have been made regarding
anticipated events.

All written forward-looking statements made in connection with this Form 10-QSB
that are attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these cautionary statements. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.

The safe harbors of forward-looking statements provided by the Securities
Litigation Reform Act of 1995 are unavailable to issuers not subject to the
reporting requirements set forth under Section 13(a) or 15(D) of the Securities
Exchange Act of 1934, as amended. As we have not registered our securities
pursuant to Section 12 of the Exchange Act, such safe harbors set forth under
the Reform Act are unavailable to us.

ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including
our principal executive officer and the principal financial officer, we have
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as of the end of the period
covered by this report. Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the evaluation date that
our disclosure controls and procedures were effective such that the material
information required to be included in our Securities and Exchange Commission
reports is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms relating to our company, particularly during
the period when this report was being prepared.

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Additionally, there were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
evaluation date. We have no identified any significant deficiencies or material
weaknesses in our internal controls, and therefore there were no corrective
actions taken.

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

NONE.

ITEM 2. CHANGES IN SECURITIES

The following unregistered securities have been issued since April 1st, 2006:

     Date             No. of Shares       Title       Valued At        Reason
     ----             -------------       -----       ---------        ------
     May 2006          1,980,000         Common        $0.50            Cash
     August 2006         220,000         Common        $2.50            Wells

During the third quarter, the company achieved pre-negotiated financial
benchmarks associated with the Medium Term Note dated August 8, 2006. Because
financial results for the quarter met and exceeded both revenue and EBITDA
targets, the company has executed its "performance based call option" and has
returned 500,000 shares of stock to the treasury. This results in a reduction of
shares outstanding from 28,040,013 to 27,540,013 at no cost to the company.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

The following exhibits are included with this registration statement filing.
Those marked with an asterisk and required to be filed hereunder, are

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incorporated by reference and can be found in their entirety in our original
Form 10-SB Registration Statement, filed under SEC File Number 0-51414, at the
SEC website at www.sec.gov:

   Exhibit No.                          Description
   -----------                          -----------
     31.1            ss. 302 Certification of Principal Executive Officer,
                     Principal Accounting Officer
     32.1            ss. 906 Certification of Principal Executive Officer,
                     Principal Accounting Officer

                                   SIGNATURES

Pursuant to the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

November 1, 2006

Lucas Energy, Inc., Registrant


By: /s/ James J. Cerna
---------------------------------
James J. Cerna,
President and Chief Executive Officer, Principal Accounting Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

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