Lucas Energy Total Return Partners II, LP seeks to deliver an attractive total return through investments primarily in energy equities and secondarily in other natural resource related equities. The managers believe that we are entering a long cycle in which the supply of energy and other resources will be hard pressed to meet growing global demand, leading to a period of generally strong commodity prices. The Fund will hold a portfolio of securities chosen to maximize a) the quantity of resources indirectly owned, and b) the cash flow benefits of owning scarce resources in an environment of strong commodity prices. Specifically, the Fund operates as an asset oriented value buyer - seeking to identify the companies which offer the lowest cost, most durable reserves and cash flow. Moreover, the Fund will be particularly attuned to opportunities in the Royalty Trust sector, which allows investors to share directly in the cash flows from mature resource properties (in essence in the same way as REITs allow investors to share in real estate returns). Key metrics in our energy investing are the projected durability of company's reserves (reserve life or the R to P Ratio), the cost to investors of a company's underlying reserves ($ Enterprise Value per Barrel of Oil Equivalent Reserves), and the estimated present value of anticipated trust distributions (as calculated by a proprietary model). The Fund will have a bias toward securities which provide a high level of cash flow distribution - Royalty Trusts, MLPs, Timber REITs, Energy Service Trusts, direct ownership of private royalty properties etc. The Fund manages risk through extensive diversification (typically upwards of 125 positions), a constant rotation to value in which appreciated securities are sold to buy less fully appreciated ones, limited use of leverage, a move to increased cash levels during periods of short term euphoria, and selective shorting. We believe our greatest margin of safety is achieved by holding deep value with minimal leverage so that the portfolio can weather short-term drops in commodity and/or stock prices. We are comfortably long biased investors, and generally expect to keep short positions to below 25% of exposure. It is our expectation that Global oil production is likely to grow very slowly beyond current levels. This will make likely Oil Replacement a central economic theme for coming decades. We plan to position the portfolio for this by 1) Owning as much long lived oil production as we can, while 2) recognizing the growth which must occur in other energy areas - Natural gas, Gas-to-liquids technology, Coal, Coal-to-liquid technology, Wind Power, Biomass, Nuclear etc. The Manager has set guidelines of a maximum 140% total exposure, and 120% net exposure. No more than 15%, and generally less than 10%, of the Fund will be invested in non-exchange traded securities. With its focus on hard assets the Fund is seeking to provide excellent inflation protection.