Company Overview: Houston American Energy Corp.

Business Focus

• Type: Independent oil and gas exploration, development, and production company.
• Main Activities:
  • Exploration and development of natural gas and crude oil reserves.
  • Acquisition of mineral interests and properties.
  • Exploitation of existing resources.
  • Active management through opportunistic acquisitions and divestitures.

Principal Operations

• Geographic Areas:
  • U.S. Permian Basin (Texas):
    • Properties in Reeves County and Yoakum County.
    • Focus on Wolfcamp, Bone Spring, and Avalon formations.
    • Interests in 98 net wells, with production in 2024 totaling approximately 3,468 barrels of oil and 53,476 MCF of natural gas.
  • U.S. Gulf Coast (Louisiana):
    • Mineral interest in 2,485 gross acres (23.4% interest). No current wells or development plans.
  • South America (Colombia):
    • Interests through its investment in Hupecol Meta, LLC.
    • Located in the Llanos Basin, covering approximately 639,405 gross acres.
    • Key prospect: CPO-11 block, with interests in the Venus Exploration Area and other sub-blocks.
    • As of December 31, 2024, had 4 wells producing in Colombia.
    • Significant exploration activity included drilling two horizontal wells in 2023.
    • Investment in Hupecol Meta fully impaired in 2024 due to deteriorating earnings prospects.

Financial Highlights (as of December 31, 2024)

• Revenue: Approximately $560,180 from oil and gas sales in 2024, down 30% from $794,027 in 2023.
• Production (excluding operated wells):
  • Oil: 5,992 barrels in 2024 (down from 7,971 barrels in 2023).
  • Natural Gas: 53,476 MCF in 2024 (down from 57,360 MCF in 2023).
  • Natural Gas Liquids: 159,680 gallons in 2024 (down from 179,506 gallons in 2023).
• Employees: 2 full-time employees as of December 31, 2024.
• Market Cap: The aggregate market value of non-affiliate-held voting equity was approximately $14 million as of June 28, 2024.
• Shares Outstanding: 15,686,533 shares as of April 28, 2025.
• Net Loss: Approximately $8.2 million in 2024, increased from about $3.2 million in 2023.
• Profitability: The Company has incurred operating losses annually since 2011, with an accumulated deficit of over $85 million as of December 31, 2024.

Corporate and Operational Strategy

• Focuses on early identification and entry into resource plays.
• Partners with larger operators; does not operate wells directly.
• Aims to capture larger resource potential at lower costs to minimize risks.
• Actively manages assets through acquisitions and divestitures to grow reserves and shareholder value.

Other Key Details

• Assets:
  • Oil and gas properties under full cost method, with valued at approximately $62.8 million (net of depreciation) as of December 31, 2024.
  • Fully impaired investment in Hupecol Meta in 2024.
• Liabilities:
  • Total liabilities of roughly $195,488.
  • Reserve for plugging and abandonment costs of approximately $57,180.
• Personnel: Small staff, no unionized workforce, no significant internal technical capabilities—rely on third-party consultants.
• Revenue Recognition: Primarily from sale of hydrocarbons at delivery points, recognized when control transfers.
• Regulatory Environment: Subject to federal and state regulations, environmental laws, and potential restrictions related to hydraulic fracturing and greenhouse gases.
• Risks: Highly dependent on energy prices, exploration risks, operational risks, and regulatory changes. Significant dependence on third-party operators for drilling and production.

Recent Developments (2024)

• Terminated legacy properties in Colombia, recognizing a loss of ~$2.34 million.
• Investment in Hupecol Meta fully impaired.
• Participating in new drilling in Reeves County, with production expected to start in Q2 2025.
• Capital expenditures in 2024 totaled approximately $1.89 million, mainly related to interests in Hupecol Meta.
• Distributed about $922,719 from Hupecol Meta in 2024.
• Raised proceeds via stock sales (~$2.3 million in private placement and ~$3.9 million in registered offerings).
• Engaged in acquisition negotiations for other companies (AGIG and RPD Technologies).

Summary: Houston American Energy Corp. engages in non-operational exploration, development, and production of oil and natural gas primarily in Texas and Colombia via investments in properties and interests through its affiliated entity Hupecol Meta. It focuses on resource exploration with a small team, relies heavily on partnerships, and has reported continued operating losses, with assets valued mainly based on SEC full-cost accounting principles. Its strategic emphasis is on early resource identification and leveraging partnerships, but it faces significant business risks linked to energy prices, exploration success, and regulatory changes.