HOUSTON AMERICAN ENERGY CORP - Quarter Report: 2008 September (Form 10-Q)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
(Mark
One)
|
x
|
QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF
1934
|
For the
quarterly period ended September 30, 2008
OR
|
o
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
transition period from ___________ to ______________.
Commission
File Number 1-32955
HOUSTON
AMERICAN ENERGY CORP.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
76-0675953
|
|
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification No.)
|
801
Travis Street, Suite 1425, Houston, Texas 77002
(Address
of principal executive offices)(Zip Code)
(713)
222-6966
(Registrant's
telephone number, including area code)
(Former
name, former address and former fiscal year, if changed since last
report)
Indicate
by check mark 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 ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
|
Large
accelerated filer o
|
Accelerated
filer
o
|
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ¨ No x
As of
November 12, 2008, we had 28,100,772 shares of $.001 par value Common Stock
outstanding.
HOUSTON AMERICAN ENERGY
CORP.
FORM
10-Q
|
Page No.
|
||||
|
PART
I. FINANCIAL
INFORMATION
|
||||
|
3
|
||||
|
4
|
||||
|
5
|
||||
|
6
|
||||
|
11
|
||||
|
17
|
||||
|
17
|
||||
|
PART
II OTHER
INFORMATION
|
||||
|
18
|
||||
|
18
|
||||
PART I -
FINANCIAL INFORMATION
|
ITEM
1.
|
Financial
Statements
|
HOUSTON AMERICAN ENERGY CORP.
BALANCE
SHEET
(Unaudited)
|
September 30, 2008
|
December 31, 2007
|
|||||||
|
ASSETS
|
||||||||
|
CURRENT
ASSETS:
|
||||||||
|
Cash
|
$
|
11,853,248
|
$
|
417,818
|
||||
|
Marketable
securities
|
—
|
9,650,000
|
||||||
|
Accounts
receivable
|
760,956
|
577,512
|
||||||
|
Prepaid
expenses
|
50,698
|
49,255
|
||||||
|
Other
current assets
|
1,691,551
|
—
|
||||||
|
Total
current assets
|
14,356,453
|
10,694,585
|
||||||
|
PROPERTY,
PLANT AND EQUIPMENT
|
||||||||
|
Oil
and gas properties – full cost method
|
||||||||
|
Costs
subject to amortization
|
14,621,954
|
12,714,669
|
||||||
|
Costs
not being amortized
|
1,280,298
|
998,806
|
||||||
|
Office
equipment
|
11,878
|
11,878
|
||||||
|
Total
property, plant and equipment
|
15,914,130
|
13,725,353
|
||||||
|
Accumulated
depreciation and depletion
|
(3,838,998
|
)
|
(3,708,308
|
)
|
||||
|
Total
property, plant and equipment, net
|
12,075,132
|
10,017,045
|
||||||
|
OTHER
ASSETS
|
101,453
|
3,167
|
||||||
|
Total
Assets
|
$
|
26,533,038
|
$
|
20,714,797
|
||||
|
LIABILITIES AND SHAREHOLDERS’
EQUITY
|
||||||||
|
CURRENT
LIABILITIES:
|
||||||||
|
Accounts
payable
|
$
|
603,120
|
$
|
260,222
|
||||
|
Accrued
expenses
|
798
|
1,720
|
||||||
|
Foreign
income taxes payable
|
22,489
|
74,141
|
||||||
|
Total
current liabilities
|
626,407
|
336,083
|
||||||
|
LONG-TERM
LIABILITIES:
|
||||||||
|
Reserve
for plugging costs
|
126,212
|
115,061
|
||||||
|
Deferred
rent obligation
|
20,009
|
20,206
|
||||||
|
Total
long-term liabilities
|
146,221
|
135,267
|
||||||
|
SHAREHOLDERS’
EQUITY:
|
||||||||
|
Common
stock, $0.001 par value; 100,000,000 shares authorized; 28,100,772 and
27,920,172 shares outstanding, respectively
|
28,100
|
27,920
|
||||||
|
Additional
paid-in capital
|
23,586,273
|
22,377,831
|
||||||
|
Treasury
stock, at cost; 100,000 shares
|
(85,834
|
)
|
(85,834
|
)
|
||||
|
Retained
earnings (accumulated deficit)
|
2,231,871
|
(2,076,470
|
)
|
|||||
|
Total
shareholders’ equity
|
25,760,410
|
20,243,447
|
||||||
|
Total
liabilities and shareholders’ equity
|
$
|
26,533,038
|
$
|
20,714,797
|
||||
The
accompanying notes are an integral part of these financial
statements
HOUSTON AMERICAN ENERGY CORP.
STATEMENTS
OF OPERATIONS
(Unaudited)
|
Nine Months Ended
September 30,
|
Three Months Ended
September 30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Revenue:
|
||||||||||||||||
|
Oil
and gas
|
$ | 8,616,868 | $ | 3,153,914 | $ | 2,350,782 | $ | 1,168,829 | ||||||||
|
Total
revenue
|
8,616,868 | 3,153,914 | 2,350,782 | 1,168,829 | ||||||||||||
|
Expenses
of operations:
|
||||||||||||||||
|
Lease
operating expense and severance tax
|
2,789,630 | 1,419,442 | 747,740 | 524,630 | ||||||||||||
|
Joint
venture expenses
|
144,919 | 99,291 | 43,225 | 20,237 | ||||||||||||
|
General
and administrative expense
|
2,616,714 | 1,285,533 | 609,398 | 410,752 | ||||||||||||
|
Depreciation
and depletion
|
913,214 | 1,115,877 | 147,311 | 449,120 | ||||||||||||
|
Gain
on sale of oil and gas properties
|
(7,615,236 | ) | — | — | — | |||||||||||
|
Total
operating expenses
|
(1,150,759 | ) | 3,920,143 | 1,547,674 | 1,404,739 | |||||||||||
|
Income
(loss) from operations
|
9,767,627 | (766,229 | ) | 803,108 | (235,910 | ) | ||||||||||
|
Other
income:
|
||||||||||||||||
|
Interest
income
|
232,870 | 504,763 | 72,427 | 144,209 | ||||||||||||
|
Total
other income
|
232,870 | 504,763 | 72,427 | 144,209 | ||||||||||||
|
Net
income (loss) before taxes
|
10,000,497 | (261,466 | ) | 875,535 | (91,701 | ) | ||||||||||
|
Income
tax expense (benefit)
|
5,130,141 | (99,443 | ) | 76,703 | (366,891 | ) | ||||||||||
|
Net
income (loss)
|
$ | 4,870,356 | $ | (162,023 | ) | $ | 798,832 | $ | 275,190 | |||||||
|
Basic
income (loss) per share
|
$ | 0.17 | $ | (0.01 | ) | $ | 0.03 | $ | 0.01 | |||||||
|
Diluted
income (loss) per share
|
$ | 0.17 | $ | (0.01 | ) | $ | 0.03 | $ | 0.01 | |||||||
|
Basic
weighted average shares
|
28,003,915 | 27,920,172 | 28,100,772 | 27,920,172 | ||||||||||||
|
Diluted
weighted average shares
|
28,165,640 | 27,920,172 | 28,309,632 | 28,021,482 | ||||||||||||
The
accompanying notes are an integral part of these financial
statements
HOUSTON AMERICAN ENERGY CORP.
STATEMENTS
OF CASH FLOWS
(Unaudited)
|
For the Nine Months Ended
September 30,
|
||||||||
|
2008
|
2007
|
|||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
|
Net
income (loss)
|
$
|
4,870,356
|
$
|
(162,023
|
)
|
|||
|
Adjustments
to reconcile net income (loss) to net cash from
operations:
|
||||||||
|
Depreciation
and depletion
|
913,214
|
1,115,877
|
||||||
|
Stock
based compensation
|
833,623
|
294,042
|
||||||
|
Accretion
expense – asset retirement obligation
|
15,546
|
1,881
|
||||||
|
Amortization
of deferred rent
|
(198
|
)
|
—
|
|||||
|
Gain
on sale of oil and gas properties
|
(7,615,236
|
)
|
—
|
|||||
|
Changes
in operating assets and liabilities:
|
||||||||
|
(Increase)
decrease in accounts receivable
|
(172,109
|
)
|
34,601
|
|||||
|
(Increase)
decrease in prepaid expense
|
(30,767
|
)
|
(59,074
|
)
|
||||
|
Increase
in accounts payable and accrued liabilities
|
290,323
|
(175,469
|
)
|
|||||
|
Net
cash provided by (used in) operations
|
(895,248
|
)
|
1,049,835
|
|||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
|
Sale
of marketable securities
|
9,650,000
|
4,150,000
|
||||||
|
Acquisition
of oil and gas properties
|
(7,180,675
|
)
|
(4,660,318
|
)
|
||||
|
Proceeds
from sale of oil and gas properties, net of expenses
|
10,146,655
|
—
|
||||||
|
Increase
in other assets
|
(98,287
|
)
|
—
|
|||||
|
Net
cash provided by (used in) investing activities
|
12,517,693
|
(510,318
|
)
|
|||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
|
Dividends
paid
|
(562,015
|
)
|
—
|
|||||
|
Exercise
of warrants
|
375,000
|
—
|
||||||
|
Net
cash used in financing activities
|
(187,015
|
)
|
—
|
|||||
|
Increase
in cash and equivalents
|
11,435,430
|
539,517
|
||||||
|
Cash,
beginning of period
|
417,818
|
409,008
|
||||||
|
Cash,
end of period
|
$
|
11,853,248
|
$
|
948,525
|
||||
|
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
||||||||
|
Interest
paid
|
$
|
—
|
$
|
—
|
||||
|
Taxes
paid
|
$
|
5,107,652
|
$
|
—
|
||||
|
NONCASH
INVESTING AND FINANCING INFORMATION
|
||||||||
|
Cash
proceeds from sale of oil and gas properties escrowed
|
$
|
1,673,551
|
$
|
—
|
||||
The
accompanying notes are an integral part of these financial
statements
HOUSTON AMERICAN ENERGY CORP.
Notes to
Financial Statements
September
30, 2008
(Unaudited)
NOTE
1. – BASIS OF PRESENTATION
The
accompanying unaudited financial statements of Houston American Energy Corp., a
Delaware corporation (the “Company”) have been prepared in accordance with
accounting principles generally accepted in the United States of America for
interim financial information and with the instructions to Form
10-Q. They do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for a complete financial presentation. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, considered
necessary for a fair presentation, have been included in the accompanying
unaudited financial statements. Operating results for the periods
presented are not necessarily indicative of the results that may be expected for
the full year.
These
financial statements should be read in conjunction with the financial statements
and footnotes, which are included as part of the Company’s Form 10-K for the
year ended December 31, 2007.
NOTE
2. – CHANGES IN PRESENTATION
Certain
financial presentations for the periods presented for 2007 have been
reclassified to conform to the 2008 presentation.
NOTE
3. – RECENT ACCOUNTING PRONOUNCEMENTS
In
September 2006, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 157 “Fair Value Measurements”,
which provides expanded guidance for using fair value to measure assets and
liabilities. SFAS 157 establishes a hierarchy for data used to value assets and
liabilities, and requires additional disclosures about the extent to which a
company measures assets and liabilities at fair value, the information used to
measure fair value, and the effect of fair value measurements on earnings.
Implementation of SFAS 157 is required on January 1, 2008. The adoption of SFAS
157 did not have a material impact on the Company’s results of operations or
financial position.
In
December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” which
revises SFAS No. 141 and changes multiple aspects of the accounting for business
combinations. SFAS No. 141R requires the acquirer to recognize most identifiable
assets acquired, liabilities assumed, and noncontrolling interests in the
acquiree at their full fair value on the acquisition date. Goodwill is to be
recognized as the excess of the consideration transferred plus the fair value of
the noncontrolling interest over the fair values of the identifiable net assets
acquired. Subsequent changes in the fair value of contingent consideration
classified as a liability are to be recognized in earnings, while contingent
consideration classified as equity is not to be remeasured. Costs such as
transaction costs are to be excluded from acquisition accounting, generally
leading to recognizing expense and additionally, restructuring costs that do not
meet certain criteria at acquisition date are to be subsequently recognized as
post-acquisition costs. SFAS No. 141R is effective for business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. The Company is
currently evaluating the impact that this issuance will have on its financial
position and results of operations.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities—an amendment of FASB Statement No.
133”. SFAS 161 requires entities that utilize derivative
instruments to provide qualitative disclosures about their objectives and
strategies for using such instruments, as well as any details of
credit-risk-related contingent features contained within
derivatives. SFAS 161 also requires entities to disclose additional
information about the amounts and location of derivatives located within the
financial statements, how the provisions of SFAS 133 has been applied, and the
impact that hedges have on an entity’s financial position, financial
performance, and cash flows. SFAS 161 is effective for fiscal years
and interim periods beginning after November 15, 2008, with early application
encouraged. The Company currently does not anticipate the adoption of
SFAS 161 will have a material impact on the disclosures already
provided.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”, which identifies the sources of accounting
principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States of America (the GAAP hierarchy). This Statement is
effective 60 days following the SEC’s approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles”. The Company does
not expect the adoption of SFAS 162 to have a material effect on its financial
statements or related disclosures.
In June
2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities”
(“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting
and, therefore, need to be included in computing earnings per share under the
two-class method described in SFAS No. 128, “Earnings Per Share.” FSP EITF
03-6-1 is effective for the Company as of January 1, 2009 and in accordance with
its requirements it will be applied retrospectively. The Company does not expect
the adoption of FSP EITF 03-6-1 to have a material impact on its consolidated
financial statements.
NOTE
4. – MARKETABLE SECURITIES
During
the nine months ended September 30, 2008, the Company held marketable
securities, which consisted of investments in corporate and municipal bonds. At
September 30, 2008, the Company held no marketable securities. The
Company accounted for its investments in marketable securities pursuant to SFAS
No. 115 "Accounting for
Certain Investments in Debt and Equity Securities", and classified all of
its marketable securities as available-for-sale. Accordingly, the investments
were carried at fair market value with unrealized gains and losses, net of tax,
reported as a separate component of stockholders equity. Realized gains and
losses and declines in value determined to be other then temporary in nature
were included in interest income, net. There were no unrealized gains or losses
associated with these marketable securities at December 31, 2007 as the cost
approximated fair market value. There were no realized gains or losses during
the three month or nine month periods ending September 30, 2008.
NOTE
5. – STOCK-BASED COMPENSATION EXPENSE
On
January 1, 2006, the Company adopted Statement of Financial Accounting Standards
123R, “Share-Based
Payments”, or SFAS 123R. The Company periodically grants options to
employees, directors and consultants under the Company’s 2005 Stock Option Plan
and the Company’s 2008 Equity Incentive Plan. These are accounted for in
accordance with the provisions of SFAS 123R and Emerging Issues Task Force
Abstract No. 96-18, “Accounting for Equity Instruments
That are Issued to Other Than Employees for Acquiring or in Conjunction with
Selling, Goods or Services” as well as other authoritative accounting
pronouncements. The Company is required to make estimates of the fair value of
the related instruments and recognize expense over the period benefited, usually
the vesting period.
Stock
Option and Warrant Activity
A summary
of stock option activity and related information for the nine months ended
September 30, 2008 is presented below:
|
Options
|
Weighted-Average Exercise
Price
|
Aggregate Intrinsic Value
|
||||||||||
|
Outstanding
at January 1, 2008
|
339,000
|
$
|
3.12
|
$1,085,280
|
||||||||
|
Granted
|
1,053,333
|
$
|
7.20
|
—
|
||||||||
|
Exercised
|
—
|
—
|
—
|
|||||||||
|
Forfeited
|
—
|
—
|
—
|
|||||||||
|
Outstanding
at September 30, 2008
|
1,392,333
|
$
|
6.21
|
$
|
1,085,280
|
|||||||
|
Exercisable
at September 30, 2008
|
339,000
|
$
|
3.12
|
$
|
1,085,280
|
|||||||
On June
2, 2008, the Company granted to the Company’s two principal officers a total of
1,050,000 options to purchase shares of the Company’s common
stock. The exercise price is $7.20 per share. The options
have a term of ten years and 900,000 of the options vest over six years and
150,000 of the options vest over three years.
Also on
June 2, 2008, the Company granted to a director 3,333 options to purchase shares
of the Company’s common stock. The options vest immediately, have an
exercise price of $7.20 per share and a term of ten years.
The above
options were valued at a total of $5,314,327 using the Black-Scholes
option-pricing model and the following parameters: (1) 3.88%
risk-free discount rate, (2) expected volatility of 73.82%, (3) zero expected
dividends, and (4) an expected option life for each grant calculated pursuant to
the terms of SAB 107 as the options granted qualify as ‘plain vanilla’ under
that literature.
At
September 30, 2008, the Company had remaining 190,000 warrants outstanding with
a remaining contractual life of 2.57 years. The weighted average
exercise price for all remaining outstanding warrants was $3.00. The
warrants had an intrinsic value of $630,800 at September 30, 2008.
The
closing price of the Company’s common stock on September 30, 2008 was
$6.32.
Stock
Grants
During
the nine months ended September 30, 2008, the Company’s shareholders approved
and the Company granted 55,600 shares of restricted common stock with immediate
vesting to the Company’s two principal officers. The Company
recognized compensation expense of $400,320 based upon the stock price at the
grant date attributable to these grants, which were originally approved, subject
to stockholder approval, in 2007 by the Company’s Board of Directors and then
later approved by the Company’s stockholders and issued in June
2008
Share-Based
Compensation Expense
The
following table reflects share-based compensation recorded by the Company for
the nine months ended September 30, 2008 and 2007:
|
Nine Months Ended
September 30,
|
||||||||
|
2008
|
2007
|
|||||||
|
Share-based
compensation expense included in reported net income
(loss)
|
$
|
833,626
|
$
|
294,042
|
||||
|
Earnings
per share effect of share-based compensation expense
|
$
|
(0.03
|
)
|
$
|
(0.01
|
)
|
||
The
following table reflects share-based compensation recorded by the Company for
the three months ended September 30, 2008 and 2007:
|
Three Months Ended
September 30,
|
||||||||
|
2008
|
2007
|
|||||||
|
Share-based
compensation expense included in reported net income
(loss)
|
$
|
256,023
|
$
|
41,166
|
||||
|
Earnings
per share effect of share-based compensation expense
|
$
|
(0.01
|
)
|
$
|
(0.00
|
)
|
||
At
September 30, 2008, total unrecognized stock-based compensation expense related
to non-vested stock options and grants of restricted common stock was
$4,966,116.
NOTE
6. – SALE OF OIL AND GAS PROPERTIES
Gain
on Sale of Oil and Gas Properties
In June
2008, the Company, through Hupecol Caracara LLC as owner/operator under the
Caracara Association Contract, sold all of its interest in the Caracara
Association Contract and related assets for a total cash consideration of
$11,917,418. At December 31, 2007, the estimated proved reserves
associated with these assets totaled 755,474 barrels of oil, which represented
37.89% of our estimated proved oil and natural gas reserves. Sales of
oil and gas properties under the full cost method of accounting are accounted
for as adjustments of capitalized costs with no gain or loss recognized, unless
the adjustment significantly alters the relationship between capitalized costs
and reserves. Since the sale of these oil and gas properties would
significantly alter the relationship, we recognized a gain on the sale of
$7,615,236 computed as follows:
|
Proceeds
from the sale
|
$
|
11,917,418
|
||
|
Add:
Transfer of asset retirement and other obligations
|
46,633
|
|||
|
Less:
Transaction costs
|
(370,908
|
)
|
||
|
Carrying
value of oil and gas properties
|
(3,977,907
|
)
|
||
|
Carrying
value of other assets
|
-
|
|||
|
Net
gain on sale
|
$
|
7,615,236
|
The
carrying value of the properties sold was computed by allocating total
capitalized costs within the non-U.S. full cost pool between properties sold and
properties retained based upon the ratio of proved reserves sold and those
proved reserves retained to total estimated proved reserves prior to the
sale.
The
following is a reconciliation of 2008 year-to-date activity in our non-U.S. full
cost center:
|
Evaluated
|
Unevaluated
|
|||||||
|
Oil
and gas properties -
|
||||||||
|
Balance
beginning of year
|
$
|
9,289,675
|
$
|
13,330
|
||||
|
Costs
incurred year-to-date
|
6,649,371
|
74,784
|
||||||
|
Sale
of Caracara properties
|
(4,760,441
|
)
|
-
|
|||||
|
Balance,
September 30, 2008
|
$
|
11,178,605
|
$
|
88,114
|
||||
|
Accumulated
depreciation, depletion and amortization -
|
||||
|
Balance
beginning of year
|
$
|
(1,468,827
|
)
|
|
|
Provision
for DD&A
|
(656,337
|
)
|
||
|
Sale
of Caracara properties
|
782,534
|
|||
|
Balance,
September 30, 2008
|
(1,342,630
|
)
|
||
|
Net
capitalized costs
|
$
|
9,924,089
|
||
The
following table presents pro forma data that reflects revenue, income from
continuing operations, net income and income per share for the three and nine
months ended September 30, 2008 and September 30, 2007 as if the Caracara
transaction had occurred at the beginning of the periods.
|
Pro-Forma
Information
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Oil
and gas revenue
|
$
|
2,350,782
|
$
|
376,300
|
$
|
5,612,003
|
$
|
991,740
|
||||||||
|
Income
from operations
|
824,561
|
(639,229
|
)
|
(70,203
|
)
|
(1,757,219
|
)
|
|||||||||
|
Net
income (loss)
|
$
|
820,285
|
$
|
191,625
|
$
|
(24,459
|
)
|
$
|
(568,042
|
)
|
||||||
|
Basic
income (loss) per share
|
$
|
.03
|
$
|
.01
|
$
|
(0.00
|
)
|
$
|
(0.02
|
)
|
||||||
|
Diluted
Income (loss) per share
|
$
|
.03
|
$
|
.01
|
$
|
(0.00
|
)
|
$
|
(0.02
|
)
|
||||||
Other
Current Assets
Pursuant
to the terms of the sale of the Caracara assets, on the closing date of the
sale, a portion of the purchase price was deposited in escrow to settle
post-closing adjustments under the purchase and sale agreement. The
funds deposited in escrow will be released to the Company, or to the purchaser,
based on post-closing adjustments 12 months following closing. The
Company’s proportionate interest in the escrow deposit, totaling $1,673,551, has
been recorded as Other Current Assets.
The net
proceeds and the gain realized from the sale of the Caracara assets may be
adjusted based on post-closing adjustments.
Colombian
Taxes
Colombian
taxes attributable to the sale of the Caracara assets, totaling $4,394,575, were
recorded and paid at the time of closing.
NOTE
7. – EXECUTIVE COMPENSATION
During
the nine months ended September 30, 2008, the Company recognized compensation
expense, in addition to salaries, to its two executive officers consisting of
(1) $400,320 attributable to grants of 55,600 shares of restricted stock
discussed above in Note 5, (2) payment of cash bonuses totaling $750,000, which
bonuses were contingent on the completion of the sale of the Caracara assets and
were paid in June 2008, and (3) $433,303 attributable to grants of stock
options.
NOTE
8. – ISSUANCES OF COMMON STOCK
During
the nine months ended September 30, 2008, the Company issued 125,000 shares of
common stock for $375,000 to a single investor pursuant to the exercise of an
outstanding warrant.
The
shares were offered and sold in a private transaction pursuant to the exemption
from registration provided by Section 4(2) of the Securities Act of
1933. The investor was an "accredited investor" as defined in Rule
501 promulgated under the Securities Act.
NOTE
9. – DIVIDEND
During
the quarter ended September 30, 2008, we declared and paid cash dividends to our
shareholders of $0.02 per share, or an aggregate of $562,015.
NOTE
10. - GEOGRAPHICAL INFORMATION
The
Company currently has operations in two geographical areas, the United States
and Colombia. Revenues for the nine months ended September 30, 2008 and Long
Lived Assets as of September 30, 2008 attributable to each geographical area are
presented below:
|
Nine Months Ended September 30,
2008
|
||||||||
|
Revenues
|
Long Lived Assets, Net
|
|||||||
|
United
States
|
$
|
410,268
|
$
|
2,151,043
|
||||
|
Colombia
|
8,206,600
|
9,924,089
|
||||||
|
Total
|
$
|
8,616,868
|
12,075,132
|
|||||
|
ITEM
2.
|
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Forward-Looking
Information
This Form
10-Q quarterly report of Houston American Energy Corp. (the “Company”) for the
quarter and nine months ended September 30, 2008, contains certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, which are intended to be covered by the safe harbors created
thereby. To the extent that there are statements that are not
recitations of historical fact, such statements constitute forward-looking
statements that, by definition, involve risks and uncertainties. In
any forward-looking statement, where the Company expresses an expectation or
belief as to future results or events, such expectation or belief is expressed
in good faith and believed to have a reasonable basis, but there can be no
assurance that the statement of expectation or belief will be achieved or
accomplished.
The
actual results or events may differ materially from those anticipated and as
reflected in forward-looking statements included herein. Factors that
may cause actual results or events to differ from those anticipated in the
forward-looking statements included herein include the Risk Factors described in
Item 1A of this report and of the Company’s Form 10-K for the year ended
December 31, 2007.
Readers
are cautioned not to place undue reliance on the forward-looking statements
contained herein, which speak only as of the date hereof. The Company
believes the information contained in this Form 10-Q to be accurate as of the
date hereof. Changes may occur after that date, and the Company will
not update that information except as required by law in the normal course of
its public disclosure practices.
Additionally,
the following discussion regarding the Company’s financial condition and results
of operations should be read in conjunction with the financial statements and
related notes contained in Item 1 of Part 1 of this Form 10-Q, as well as the
Risk Factors in Item 1A and the financial statements in the Company’s Form 10-K
for the fiscal year ended December 31, 2007.
Critical
Accounting Policies
The
Company’s discussion and analysis of its financial condition and results of
operations are based upon the Company’s financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The Company believes certain critical
accounting policies affect its more significant judgments and estimates used in
the preparation of its financial statements. A description of the
Company’s critical accounting policies is set forth in the Company’s Form 10-K
for the year ended December 31, 2007. As of, and for the nine months
ended, September 30, 2008, there have been no material changes or updates to the
Company’s critical accounting policies other than the following updated
information relating to Unevaluated Oil and Gas Properties:
-- Unevaluated Oil and Gas
Properties. Unevaluated oil and gas properties not subject to
amortization include the following at September 30, 2008:
|
September 30, 2008
|
||||
|
Acquisition
costs
|
$
|
58,097
|
||
|
Evaluation
costs
|
1,201,577
|
|||
|
Retention
costs
|
20,624
|
|||
|
Total
|
$
|
1,280,298
|
||
The
carrying value of unevaluated oil and gas prospects include $88,114 expended for
properties in the South American country of Colombia at September 30,
2008. We are maintaining our interest in these properties and
development has or is anticipated to commence within the next twelve
months.
Current
Year Developments
Drilling
Activity
During
the nine months ended September 30, 2008, we drilled 12 international wells in
Colombia, as follows:
|
▪
|
Ten wells were drilled on
concessions in which we hold a 12.5% working interest; of which, at
September 30, 2008, seven were in production, two were dry holes and one
was awaiting completion.
|
|
▪
|
One well was drilled on a
concession in which we hold a 6.25% working interest and was a dry
hole.
|
|
▪
|
One well drilled on a concession
in which we hold a 1.6% working interest, was sold as part of the Caracara
transaction and was in production at the time of that
sale.
|
During
the nine months ended September 30, 2008, one domestic well, the Petro Hunt
Wilberts A. Sons et.al. well, located in Louisiana on our North Bayou Henry
lease, was drilled and was a dry hole. The well drilled on our Caddo
Lake prospect during the fourth quarter of 2007 was waiting on a pipeline
connection and completion at September 30, 2008. Subsequent to
September 30, pipeline construction and connection to the well was completed and
well completion operations began.
At
September 30, 2008, we planned to drill two domestic wells on the Home Run and
West Klondite prospects in Louisiana and eight additional international wells
over the balance of 2008.
Sale
of Caracara Assets
In June
2008, we, through Hupecol Caracara LLC as owner/operator under the Caracara
Association Contract, sold all of our interest in the Caracara Association
Contract and related assets. As a result of the sale of the Caracara
assets, we received net proceeds, after deduction of fees and expenses of the
transaction, of $11,546,510, realized a gain on the sale of $7,615,236 and
eliminated from oil and gas properties costs subject to amortization associated
with the Caracara assets totaling $3,977,907.
Pursuant
to the terms of the sale of the Caracara assets, on the closing date of the
sale, a portion of the purchase price was deposited in escrow to settle
post-closing adjustments under the purchase and sale agreement. The
funds deposited in escrow will be released to us, or to the purchaser, based on
post-closing adjustments 12 months following closing. Our
proportionate interest in the escrow deposit, totaling $1,673,551, has been
recorded as Other Current Assets.
The net
proceeds and the gain realized from the sale of the Caracara assets may be
adjusted based on post-closing adjustments.
Colombian
taxes attributable to the sale of the Caracara assets, totaling $4,394,575, were
recorded and paid at the time of closing.
Production
from the Caracara prospect accounted for $0 and $3,004,865 of our revenues
during the quarter and nine months ended September 30, 2008.
Lease
operating expense from the Caracara prospect accounted for $20,716 and $464,790
of our lease operating expense during the quarter and nine months ended
September 30, 2008.
Leasehold
Activity
During
the nine months ended September 30, 2008, we acquired, through our 1.594674%
interest in Hupecol Caracara LLC, an interest in the La Cuerva Contract covering
approximately 75 square miles in Colombia.
During
the nine months ended September 30, 2008, we acquired interests in two
additional prospects in South Louisiana for which we advanced leasehold costs of
approximately $7,770. We sold our interest in one of the prospects –
the North Henry Bayou prospect – during the nine month period, retaining a 4.5%
carried interest in the prospect, for which we received $60,301 and sold our
interest in the second prospect – the Home Run prospect – during the nine month
period for which we received $213,395.
Seismic
Activity
During
the nine months ended September 30, 2008, our operator in Colombia acquired
approximately 65 miles of additional seismic and geological data. The additional
data relates primarily to prospects in which we hold a 12.5% working interest.
Our share of the costs of such data acquisition was $309,061. The
operator also acquired additional seismic data on the La Cuerva
prospect. Our share of this cost was $41,030.
At
September 30, 2008, we planned to shoot an additional 41 square miles combined
of seismic on the Las Garzas and Leona contracts over the balance of
2008.
Executive
Compensation – Restricted Stock, Stock Options and Bonus Payments
During
the nine months ended September 30, 2008, the Company recognized compensation
expense, in addition to salaries, to its two executive officers consisting of
(1) $400,320 attributable to grants of 55,600 shares of restricted stock
discussed above in Note 5, (2) payment of cash bonuses totaling $750,000, which
bonuses were contingent on the completion of the sale of the Caracara assets and
were paid in June 2008, and (3) $433,303 attributable to grants of stock
options.
Dividend
During
the quarter ended September 30, 2008, we declared and paid cash dividends to our
shareholders of $0.02 per share, or an aggregate of $562,015.
Macroeconomic
Impact on Oil and Natural Gas Prices
Late in
the third quarter of 2008 and accelerating during the early fourth quarter of
2008, the United States and global economies suffered a severe disruption in
credit and financial markets that have been accompanied by economic contraction
and a sharp drop in the price of oil and natural gas due to a projected decline
in demand for oil and natural gas. We have not historically entered
into hedging transactions to reduce our exposure to commodity price
risks. As a result of such macroeconomic conditions and our unhedged
position, we anticipate the prices at which we sell oil and natural gas will
decline markedly during the fourth quarter of 2008 and for the foreseeable
future and that our total revenues and profitability will decline as
well.
Results
of Operations
Oil and Gas
Revenues. Total oil and gas revenues increased 101.1% to
$2,350,782 in the quarter ended September 30, 2008 when compared to the quarter
ended September 30, 2007. For the first nine months of 2008, oil and gas
revenues increased 173.2%, to $8,616,868, when compared to the first nine months
of 2007.
The
increase in oil and gas revenue for both the quarter and nine months over 2007
is principally due to increased production resulting from the development of the
Colombian fields, particularly fields in which we hold a higher working interest
(12.5%), and higher oil prices, partially offset by the sale of 34 producing
wells as part of the Caracara transaction during the second quarter of 2008.
During the third quarter of 2008, we had interests in 12 producing wells in
Colombia and 7 producing wells in the U.S as compared to 31 producing wells in
Colombia and 8 producing wells in the U.S. during the 2007 third
quarter.
Oil and
gas revenues from the Caracara prospect totaled $0 and $3,004,865 during the
quarter and the nine months ended September 30, 2008, respectively, as compared
to oil and gas revenues of $ 792,529 and $ 2,162,174 during the quarter and nine
months ended September 30, 2007.
The
following table sets forth a comparison of hydrocarbon prices for the quarter
and nine month periods:
|
Quarter Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
|
Hydrocarbon
prices:
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
|
Oil
– Average price per barrel
|
$
|
99.74
|
$
|
62.57
|
$
|
99.46
|
$
|
61.12
|
||||||||
|
Gas
– Average price per mcf
|
$
|
11.89
|
$
|
6.33
|
$
|
10.33
|
$
|
6.68
|
||||||||
As noted
above, we anticipate that our average prices realized from the sale of oil and
gas will decline markedly in the fourth quarter of 2008.
The
following table sets forth a comparison of oil and gas sales by region for the
quarter and nine month periods.
|
Quarter Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||||
|
Sales:
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Oil
|
Colombia
|
$
|
2,191,499
|
$
|
896,463
|
$
|
8,206,600
|
$
|
2,751,117
|
||||||||
|
US
|
52,678
|
40,979
|
146,153
|
102,777
|
|||||||||||||
|
Total
– Oil
|
$
|
2,244,177
|
$
|
937,442
|
$
|
8,352,753
|
$
|
2,853,894
|
|||||||||
|
Gas
|
Colombia
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
|
US
|
106,605
|
231,387
|
264,115
|
300,020
|
|||||||||||||
|
Total
– Gas
|
$
|
106,605
|
$
|
231,387
|
$
|
264,115
|
$
|
300,020
|
|||||||||
Natural
Gas production was down in the third quarter of 2008 as compared to the third
quarter of 2007 due to natural production declines related to our domestic
wells.
Lease Operating
Expenses. Lease operating
expenses, excluding joint venture expenses relating to our Colombian operations
discussed below, increased 42.5% to $747,740 in the 2008 quarter from $524,630
in the 2007 quarter. For the nine months ended September 30, 2008,
lease operating expenses, excluding joint venture expenses, increased 96.5%, to
$2,789,630, compared to the 2007 six month period.
The
increase in lease operating expenses was attributable to the increase in the
number of wells operated during the 2008 period and increased activities on
prospects in which we hold a higher working interest (12.5%) during 2008 as
compared to 2007, partially offset by the elimination of lease operating
expenses on the Caracara prospect following the sale of the prospect in June
2008.
|
Quarter Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
|
Lease
Operating Expenses:
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
|
Colombia
|
$
|
714,443
|
$
|
472,089
|
$
|
2,673,584
|
$
|
1,321,744
|
||||||||
|
U.S.
|
33,297
|
52,541
|
116,046
|
97,698
|
||||||||||||
|
Total
|
$
|
747,740
|
$
|
524,630
|
$
|
2,789,630
|
$
|
1,419,442
|
||||||||
Joint Venture
Expenses. Our allocable share of joint venture expenses
attributable to the Colombian Joint Venture totaled $43,225 during the 2008
quarter and $20,237 for the 2007 quarter. For the nine months ended September
30, 2008, joint venture expenses for Colombia totaled $144,919 as compared to
$99,291 for the nine months ended September 30, 2007. The increase in
joint venture expenses was attributable to an increase in drilling activity in
concessions in which we own a higher working interest.
Depreciation and Depletion
Expense. Depreciation and depletion expense was $147,311 and
$449,120 for the quarters ended September 30, 2008 and 2007, respectively, and
$913,214 and $1,115,877 for the nine months ended September 30, 2008 and 2007,
respectively. The decrease for both the quarter and nine months is
due to the sale of our interest in the Caracara prospect, partially offset by a
71.58% increase in the depletable cost pool attributable to drilling results on
prospects in which we hold a higher working interest (12.5%).
General and Administrative
Expenses. General and administrative expense increased by
48.4% to $609,398 during the quarter ended September 30, 2008 from $410,752 in
the 2007 quarter. For the nine months ended September 30, 2008,
general and administrative expenses increased 103.6%, to $2,616,714, compared to
the 2007 nine month period. The increase in general and
administrative expense was primarily attributable to increases, during the
second quarter, in compensation expense relating to one time restricted stock
grants ($400,320) and cash bonuses payable on closing of the Caracara sale
($750,000).
Gain on sale of oil & gas
properties. The sale of our Caracara assets resulted in a gain of
$7,615,236 during the quarter and nine months ended September 30,
2008. The gain realized may be subject to adjustment based on
post-closing adjustments.
Other
Income. Other income consists of interest earned on cash
balances and marketable securities.
Interest
income decreased 49.8% from $144,209 during the quarter ended September 30, 2007
to $72,427 during the quarter ended September 30, 2008 and decreased 53.9% from
$504,763 during the nine months ended September 30, 2007 to $232,870 during the
nine months ended September 30, 2008. The decrease in interest income
was attributable to reduced interest rates on short term cash
investments.
Income Tax
Expense. Income tax expense increased to $76,703 during the
2008 quarter compared to a tax benefit of $366,891 during the 2007
quarter. For the nine months ended September 30, 2008, income tax
expense increased to $5,130,141, as compared to a tax benefit of $261,466 during
the 2007 period. The increase in income tax expense during the 2008 quarter was
attributable to the increase in revenue and profitability of operations in
Colombia and the increase during the nine month period was attributable to the
sale of the Caracara assets and, to a lesser extent, the increase in revenue and
profitability of operations in Colombia. Income tax expense during
the 2008 and 2007 periods was entirely attributable to operations in
Colombia. The Company recorded no U.S. income tax liability in the
2008 or 2007 periods.
Financial
Condition
Liquidity and Capital
Resources. At September 30, 2008, we had a cash balance of
$11,853,248 and working capital of $13,730,046 compared to a cash balance of
$417,818 and working capital of $10,358,502 at December 31, 2007. The increase
in working capital during the period was primarily attributable to the receipt
of proceeds from the sale of the Caracara assets and, to a lesser extent,
increased revenues from wells producing in Colombia.
Operations
used cash during the 2008 period totaled $895,248 as compared to $1,049,835 of
cash provided by operations during the 2007 period. The adverse
change in operating cash flows was attributable to taxes arising from the sale
of the Caracara assets ($4,394,575) and the payment of cash bonuses ($750,000)
during the 2008 period.
Investing
activities provided $12,517,693 during the 2008 period compared to $510,318 used
during the 2007 period. The funds provided by investing activities
reflect the receipt of proceeds from the sale of the Caracara assets
($9,872,959) and the Home Run and North Henry Bayou prospects ($273,696), as
well as the sale of marketable securities $9,650,000 during the 2008 period and
the sale of marketable securities $4,150,000 during the 2007
period. Funds used in investing activities consisted primarily of
investments in oil and gas properties and assets of ($7,180,675) during the 2008
period and ($4,660,318) during the 2007 period.
Financing
activities used $187,015 during the 2008 period, consisting of cash dividends
paid in the amount of $562,015, partially offset by the receipt of $375,000 from
the exercise of outstanding warrants. We had no financing activities
during the 2007 period.
Capital and Exploration Expenditures
and Commitments. Our principal capital and exploration
expenditures relate to ongoing efforts to acquire, drill and complete
prospects. We expect that future capital and exploration expenditures
will be funded principally through funds generated from operations and funds on
hand, including funds generated from the sale of our interest in the Caracara
prospect.
During
the nine months of 2008, we invested approximately $7,180,675 for the
acquisition and development of oil and gas properties, consisting of (1)
drilling of twelve wells in Colombia ($6,193,176), (2) seismic and geological
costs in Colombia ($488,740), (3) delay rentals on U.S. properties ($33,458),
(4) leasehold costs on U.S. properties ($6,475) and (5) capital expenditures on
U.S. wells ($458,826).
At
September 30, 2008, our only material contractual obligation requiring
determinable future payments was a lease relating to the Company’s executive
offices which was unchanged when compared to the 2007 Form 10-K.
At
September 30, 2008, our acquisition and drilling budget for the balance of 2008
totaled approximately $3,000,000, which consisted of the drilling of eight wells
in Colombia, two wells in the United States, and seismic and infrastructure
cost. Our acquisition and drilling budget has historically been
subject to substantial fluctuation over the course of a year based upon
successes and failures in drilling and completion of prospects and the
identification of additional prospects during the course of a year.
Management
anticipates that our current financial resources combined with expected
operating cash flows will meet our anticipated objectives and business
operations, including planned property acquisitions and drilling activities, for
at least the next 12 months without the need for additional
capital. Management continues to evaluate producing property
acquisitions as well as a number of drilling prospects. It is
possible, although not anticipated, that we may require and seek additional
financing if additional drilling prospects are pursued beyond those presently
under consideration.
Off-Balance
Sheet Arrangements
We had no
off-balance sheet arrangements or guarantees of third party obligations at
September 30, 2008.
Inflation
We
believe that inflation has not had a significant impact on operations since
inception.
|
ITEM
3.
|
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET
RISK
|
We are
exposed to a variety of risks, including commodity price risks associated with
the price of oil and gas and interest rate risk associated with our investment
of excess funds. There have been no material changes in our commodity
price risk management strategy and, therefore, the risk profile of our oil and
gas operations remains substantially unchanged from the description in our
Annual Report on Form 10-K for the year ended December 31, 2007.
Due to
unfavorable market conditions for auction rate securities, during the first nine
months of 2008, we liquidated all of our marketable securities at their face
value and, at September 30, 2008, held no marketable securities. Accordingly, we
are no longer exposed to the interest rate risk described in our Annual Report
on Form 10-K for the year ended December 31, 2007.
|
ITEM
4.
|
CONTROLS AND
PROCEDURES
|
Evaluation
of Disclosure Controls and Procedures
Under the
supervision and the participation of our management, including our principal
executive officer and principal financial officer, we conducted an evaluation as
of September 30, 2008 of the effectiveness of the design and operation of our
disclosure controls and procedures, as such term is defined under Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934, as amended. Based on this
evaluation, our principal executive officer and our principal financial officer
concluded that our disclosure controls and procedures were effective as of
September 30, 2008.
Changes
in Internal Control over Financial Reporting
Except as
noted below, no change in our internal control over financial reporting (as
defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred
during the quarter ended September 30, 2008 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.
Weaknesses
in internal control over financial reporting identified in our Form 10-K for the
year ended December 31, 2007, related to (1) deficiencies in segregation of
duties and (2) deficiencies in the treasury control process.
The
deficiencies in segregation of duties arose from the fact that the company
maintains a one person internal accounting staff that does not allow for the
segregation of accounting, financial reporting and oversight
functions. The lack of segregation of duties in the accounting
function has existed since the company’s inception and has been identified by
management of the company as a weakness since inception. As noted in
our Form 10-K, we have taken no action to remedy the lack of segregation of
duties and have no plans to take any such action because the size and scope of
operations of our business do not, in management’s opinion, merit the addition
of accounting and financial reporting staff.
The
deficiency in the treasury control process arose from the occasional failure to
review bank reconciliations prepared by a part-time consultant. The
deficiency was identified by our audit firm in connection with the audit of our
2007 financial statements. We have since formalized our process of
reviewing and approval of bank reconciliations. As a result, we
believe the deficiency in treasury control process has been
remedied. We incurred no material costs associated with remediation
of the treasury control process deficiency.
PART
II
|
ITEM 1A.
|
RISK
FACTORS
|
The
following amendment and addition to the risk factors included under this
Item 1A reflect the current conditions of the capital and energy markets,
which present uncertainties to all companies that rely on capital markets for
liquidity or financing or operate in the energy markets. The information in this
Item 1A should be considered in conjunction with the other risk factors
identified in Item 1A of our 2007 Annual Report on Form 10-K/A filed on October
3, 2008.
We
May Be Affected by General Economic Conditions
The
disruption experienced in U.S. and global credit markets during second half of
2008 has resulted in projected decreases in demand for oil and natural gas,
resulting in a sharp drop in energy prices, and has affected the availability
and cost of capital. Prolonged negative changes in domestic and
global economic conditions or disruptions of either or both of the financial and
credit markets may have a material adverse effect on our results of operations,
financial condition and liquidity. At this time, it is unclear
whether and to what extent the actions taken by the U.S. government, including,
without limitation, the passage of the Emergency Economic Stabilization Act of
2008 and other measures currently being implemented or contemplated, will
mitigate the effects of the crisis. With respect to Houston American
Energy, while we have no immediate need to access the credit markets in the
foreseeable future, the impact of the current crisis on our ability to obtain
financing in the future, if needed, and the cost and terms of same, is
unclear. From an operating standpoint, the current crisis has
resulted in a steep decline in the price of oil and natural gas and will result
in reduced revenues and reduced profitability and, if prices continue to
decline, may result in deterioration of our financial position.
|
ITEM
6.
|
EXHIBITS
|
|
Exhibit
|
||
|
Number
|
Description
|
|
|
Certification
of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
||
|
Certification
of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
||
|
Certification
of CEO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
|
||
|
Certification
of CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of
2002
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on behalf by the undersigned thereunto duly
authorized.
|
HOUSTON
AMERICAN ENERGY CORP.
|
||
|
By:
|
/s/
John Terwilliger
|
|
|
John
Terwilliger
|
||
|
CEO
and President
|
||
|
By:
|
/s/
James J. Jacobs
|
|
|
James
J. Jacobs
|
||
|
Chief
Financial Officer
|
||
Date:
November 12, 2008
18