美国
证券交易委员会
华盛顿，DC 20549
表格
(马克 一)
| 根据1934年证券交易法第13或第15(d)节提交的季度报告 |
截至季度结束
或者
| 根据1934年证券交易法第13或15（d）节提交的过渡报告书 |
在从___________过渡到____________的过渡期间。
委员会文件号
（公司章程中指定的准确公司名称）
（国家或其他管辖区的 公司成立或组织） |
（美国国内国税局雇主 唯一识别号码） |
（地址 主要行政办公室）（邮政编码）
根据交易所法规（17 CFR 240.14a-12）第14a-12规定的招股材料
(公司更名、更改地址和更改财年情况的以往名称、以前地址和以前财年，如与上次报告有所改变)
根据法案第12(b)节注册的证券:
每个类型的标题 |
交易 标的 |
在注册的每个交易所上，请使用你的moomoo账号访问该功能。 | ||
请通过勾选来指示登记人（1）在过去12个月内（或在登记人要求提交此类报告的较短期间内）是否已提交根据1934年证券交易法第13条或第15(d)条要求提交的所有报告，以及（2）在过去90天内是否受此类提交要求的约束。
通过勾选圆圈表明注册者是否在过去12个月内(或注册者需要提交这些文件的较短期限内)已经递交规章S-T(本章第232.405条)规定的每个交互式数据文件。
请用勾选标记指示登记人是大型加速报告人、加速报告人、非加速报告人、小型报告公司或新兴成长公司。 请在《交易所法》第120亿.2条中查看"大型加速报告人"、"加速报告人"、"小型报告公司"和"新兴成长公司"的定义。（选择一项）：
| 大型加速文件提交人 | ☐ | 加速文件提交人 | ☐ | ☒ | |
| 小型报告公司 | 新兴成长公司 |
如果是新兴成长型企业，请打勾，以表明注册人已选择不使用遵守《证券交易法》第13(a)条所规定的任何新的或修订后的财务会计准则的延长过渡期。 ☐
请在复选标记中表明注册申请人是否是外壳公司（如《交易所法》120亿.2规定）。是 ☐ 否
截至2024年11月14日，我们拥有 $，总股数 面值普通股流通在外。
休斯敦美国能源公司
☒季度报告，根据1934年证券交易法第13条或第15（d）条
指数
| 页码 | ||
| 部分 一. | 财务信息 | 3 |
| 项目 1. | 基本报表 | 3 |
| 2024年9月30日的合并资产负债表（未经审计）和2023年12月31日 | 3 | |
| 截至2024年9月30日和2023年9月30日的三个月和九个月的未经审计的综合经营表 | 4 | |
| 截至2024年9月30日和2023年9月30日的三个月和九个月的未经审计的股东权益变动表 | 5 | |
| 截至2024年9月30日和2023年的现金流量表（未经审计） | 6 | |
| 合并财务报表附注（未经审计） | 7 | |
| 项目 2. | 分销计划 | 12 |
| 项目 3. | 有关市场风险的定量和定性披露 | 15 |
| 项目 4. | 控制和程序 | 15 |
| 第二部分 | 其他信息 | 16 |
| 项目 6. | 展示资料 | 16 |
| 2 |
| 项目 1 | 财务报表 |
第I部分 - 财务信息
休斯敦美国能源公司
汇总资产负债表
2024年9月30日 | 2023年12月 | |||||||
| (未经审计) | ||||||||
| 资产 | ||||||||
| 流动资产 | ||||||||
| 现金 | $ | $ | ||||||
| 应收账款 – 石油和燃料币销售 | ||||||||
| 预付的费用和其他流动资产 | ||||||||
| 总流动资产 | ||||||||
| 物业和设备 | ||||||||
| 石油和燃料币资产， 完全成本法 | ||||||||
| 需摊销的成本 | ||||||||
| 办公设备 | ||||||||
| 总计 | ||||||||
| 累计 消耗、折旧、摊销和减值 | ( | ) | ( | ) | ||||
| 资产及设备，净值 | ||||||||
| 股权投资 – Hupecol Meta LLC | ||||||||
| 使用权资产 | ||||||||
| 其他资产 | ||||||||
| 总资产 | $ | $ | ||||||
| 负债和股东权益 | ||||||||
| 流动负债 | ||||||||
| 应付账款 | $ | $ | ||||||
| 应计费用 | ||||||||
| 当前 租赁负债部分 | ||||||||
| 总流动负债合计 | ||||||||
| 开多期债务 | ||||||||
| 租赁负债，净额 当前部分 | ||||||||
| 拨备 用于封堵和放弃费用 | ||||||||
| 总计 开多负债 | ||||||||
| 总负债 开多 | ||||||||
| 承诺和 contingencies | ||||||||
| 股东权益 | ||||||||
| 普通股，每股面值 $，授权股数：百万股；发行股数：分别为2024年6月30日和2023年12月31日：百万股；流通股数：分别为2024年6月30日和2023年12月31日：百万股; 授权的股份 已发行且在外流通的股份 | ||||||||
| 额外实收资本 | ||||||||
| 累计亏损 | ( | ) | ( | ) | ||||
| 股东权益合计 | ||||||||
| 负债和股东权益总计 | $ | $ | ||||||
附注是这些未经审计的基本报表的一部分。
| 3 |
休斯敦美国能源公司
综合损益表
截至2024年和2023年9月30日的九个月
(未经审计)
| 九个月 | 三个月 | |||||||||||||||
| 截至9月30日， | 截至9月30日， | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 石油和燃料币营业收入 | $ | $ | ||||||||||||||
| 营业费用 | ||||||||||||||||
| 租赁营业费用和离职税 | ||||||||||||||||
| 一般和行政费用 | ||||||||||||||||
| 折旧和递耗 | ||||||||||||||||
| 总营业费用 | ||||||||||||||||
| 营运亏损 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他收入，净额 | ||||||||||||||||
| 利息收入 | ||||||||||||||||
| 其他收入 | ||||||||||||||||
| 总其他收入 | ||||||||||||||||
| 税前净(亏损)收入 | ( | ) | ( | ) | ||||||||||||
| 所得税费用 | ||||||||||||||||
| 净利润（损失） | $ | ( | ) | $ | ( | ) | ||||||||||
| 基本和稀释（亏损） 每普通股的收益 | $ | ) | $ | ) | ||||||||||||
| 基于和稀释的加权 普通股平均在外流通股份数 | ||||||||||||||||
附注是这些未经审计的基本报表的一部分。
| 4 |
休斯敦美国能源公司
股东权益变动表
截至2024年和2023年9月30日的三个月和九个月
(未经审计)
| 额外内容 | ||||||||||||||||||||
| 普通 股票 | 实缴 | 累积 | ||||||||||||||||||
| 股份 | 金额 | 资本 | 赤字 | 总计 | ||||||||||||||||
| 2023年12月31日的余额 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| 基于股票的薪酬 | — | |||||||||||||||||||
| 净损失 | — | ( | ) | ( | ) | |||||||||||||||
| 2024年3月31日结存余额 | ( | ) | ||||||||||||||||||
| 股票酬勞 | — | |||||||||||||||||||
| 淨虧損 | — | ( | ) | ( | ) | |||||||||||||||
| 2024年6月30日余额 | ( | ) | ||||||||||||||||||
| 股票酬勞 | — | |||||||||||||||||||
| 淨虧損 | — | ( | ) | ( | ) | |||||||||||||||
| 截至2024年9月30日的余额 | $ | $ | $ | ( | ) | |||||||||||||||
| 额外内容 | ||||||||||||||||||||
| 普通 股票 | 实缴 | 累积 | ||||||||||||||||||
| 股份 | 金额 | 资本 | 赤字 | 总计 | ||||||||||||||||
| 截至2022年12月31日的余额 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| 基于股票的补偿 | — | |||||||||||||||||||
| 普通股发行 | ||||||||||||||||||||
| 净亏损 | — | |||||||||||||||||||
| 截至2023年3月31日的余额 | ( | ) | ||||||||||||||||||
| 基于股票的补偿 | — | |||||||||||||||||||
| 普通股发行 | ||||||||||||||||||||
| 净亏损 | — | ( | ) | ( | ) | |||||||||||||||
| 截至2023年6月30日的余额 | ( | ) | ||||||||||||||||||
| 基于股票的补偿 | — | |||||||||||||||||||
| 净利润 | — | |||||||||||||||||||
| 截至2023年9月30日的余额 | $ | $ | $ | ( | ) | $ | ||||||||||||||
附注是这些未经审计的基本报表的一部分。
| 5 |
休斯敦美国能源公司
现金流量表
2024年和2023年截至2024年9月30日的九个月
(未经审计)
截至九个月年底 9月30日 | ||||||||
| 2024 | 2023 | |||||||
| 经营活动产生的现金流量 | ||||||||
| 净亏损/收益 | $ | ( | ) | $ | ||||
| 用于调节净利润（损失） 以匹配运营中使用的净现金： | ||||||||
| 折旧和递耗 | ||||||||
| 资产养老 义务的递增 | ||||||||
| 股票酬勞 | ||||||||
| 使用资产摊销 | ||||||||
| 经营性资产负债的变化： | ||||||||
| 应收账款减少（增加） | ( | ) | ||||||
| 从Hupecol Meta，LLC应计收益分配减少（增加） | ( | ) | ||||||
| 预付款项和其他流动资产增加 | ( | ) | ( | ) | ||||
| 应付账款和应计费用增加 | ||||||||
| 经营租赁负债减少 | ( | ) | ( | ) | ||||
| 经营活动提供的净现金（使用） | ( | ) | ( | ) | ||||
| 投资活动产生的现金流量 | ||||||||
| 资本投入款 用于股权投资 | ( | ) | ( | ) | ||||
| 投资活动使用的净现金 | ( | ) | ( | ) | ||||
| 筹资活动产生的现金流量 | ||||||||
| 发行普通股予现金收益 净的发行成本 | ||||||||
| 筹资活动提供的净现金流量 | ||||||||
| 现金流量的净增加额 | ( | ) | ( | ) | ||||
| 期初现金 | ||||||||
| 期末现金 | $ | $ | ||||||
| 补充现金流量资料 | ||||||||
| 已支付利息 | $ | $ | ||||||
| 已缴纳的税款 | $ | $ | ||||||
| 补充的非现金投资和融资 活动 | ||||||||
| 资产退休责任估计变化，净值 | $ | $ | ||||||
应计石油和燃料币开发成本变动 | $ | $ | ||||||
| 应计股权投资款项变动 投资款项及分配变动 | $ | $ | ||||||
附注是这些未经审计的基本报表的一部分。
| 6 |
休斯敦美国能源公司
合并财务报表附注
(未经审计)
注意 1 - 报告的基础及重要会计政策
附带的未经审计的合并基本报表来自休斯顿美国能源公司，一家特拉华州公司（“公司”）， 已按照美国通用会计原则针对中期财务信息以及10-Q表格的指导原则编制。它们未包含美国通用会计原则所要求的所有信息和脚注， 以进行完整的财务报告。在管理层看来，所有调整， 仅由正常的经常性调整组成，被认为对公正呈现是必要的，已包含在附带的 未经审计的合并基本报表中。所呈现期间的经营结果不一定能反映出 预计全年可能的结果。
这些未经审计的综合财务报表应与公司的经审计的综合财务报表及附注一起阅读，这些内容作为截至2023年12月31日的公司10-k表格的一部分。
合并
相关的合并基本报表包括公司的所有账户及其子公司（HAEC Louisiana E&P, Inc.）。 所有重大内部公司余额和交易在合并中已被消除。
流动性 和资本要求
附带的合并基本报表是基于公司将持续经营的假设编制的，这意味着在这些合并基本报表的发行日期之后的十二个月内，将在正常的业务过程中实现资产并满足负债。自2011年以来，公司持续亏损，累计赤字为$
公司相信，它有能力从手头现金中资助其运营成本和预期钻探操作，至少持续到这些基本报表发出后的十二个月。
2024年及以后的实际钻井时间和数量将主要由公司的土地运营商控制，具体取决于多个因素，包括但不限于融资可用性、该土地上现有油井的表现、能源价格和行业板块的状况与前景、钻探和完工服务及设备的成本，以及公司或其运营商无法控制的其他因素。
如果公司追求额外的土地收购或扩大钻井计划，公司可能需要超出手头资源的额外资金。尽管公司可能通过其他途径寻求额外资金，比如“市场上的”普通股销售和私人股票和债券的销售，但目前并没有任何提供额外资金的承诺，拥有有限的普通股用于支持筹资努力，公司也无法保证能够以可接受的条件或根本无法获得必要的资金来资助其钻井、收购或其他成本的份额。如果因为任何原因，公司无法为其钻井和竣工成本提供资金，它将放弃参与该井的一个或多个。在这种情况下，公司可能会受到处罚，或者可能会失去其在未能履行资金义务而拥有权益的潜在权益，并可能需要削减业务并放弃机会。
会计 原则及估算的使用
合并基本报表已按照美国普遍接受的会计原则编制。在编制基本报表时，管理层会进行知情的判断和估计，这些判断和估计会影响基本报表日期的资产和负债报告金额，以及在报告期间的收入和支出报告金额。管理层会持续检讨其估计，包括与潜在事项如诉讼、环保母基负债、所得税及相关的估值准备金、有证明储量的石油和燃料币的确定以及资产养老义务相关的估计。事实和情况的变化可能会导致估计的修订，实际结果可能与这些估计不同。
| 7 |
信用风险的集中度
潜在将公司置于信用风险集中的金融工具包括现金、现金及等价物（如有）和任何有价证券（如有）。截至2024年9月30日，公司的现金存款超出了FDIC当前的承保利息轴承账户上限$
基本每股盈余（亏损）是通过将可分配给普通股东的净亏损除以期间加权平均的普通股发行量来计算的。稀释后每股盈余反映了若行使或转换证券或其他合同为普通股，然后分享公司收益所可能发生的稀释。在公司报告净亏损的期间，稀释性证券被排除在计算稀释后每股净亏损金额之外，因为这样的影响会是反稀释的。
最近发布的会计公报
2023年12月，财务会计准则委员会"FASB"发布了会计准则更新"ASU"，编号2023-09，关于所得税（主题740）：所得税披露的改进（"ASU 2023-09"）。ASU 2023-09中的指导通过更细致地分解利率和按司法管辖区分解的所得税支付信息，提高了所得税披露的透明度。该标准对于从2024年12月15日后开始的财政年度生效，可提前采纳。公司目前正在评估采用ASU 2023-09可能对其合并基本报表和相关披露产生的影响。
在 2023年11月，FASB发布了ASU 2023-07，行业报告（主题280）。本次更新的修订扩大了行业披露要求， 包括对拥有单一可报告行业的实体的新行业披露要求以及其他披露要求。此 更新适用于2023年12月15日后开始的财政年度及2024年12月15日后开始的财政年度中的临时期间。预期采用本标准不会对公司的合并基本报表产生重大影响。
后续事件
公司已经评估了从2024年9月30日至财务报表发行日期的所有交易，以便进行后续事件披露考虑。2024年11月11日，在本报告涵盖的期间之后，公司出售了 普通股给一位投资者，合计收益约为$
注意 2 - 营业收入
以下表格将三个月和六个月时间内的营业收入按重要产品类型分解为2024年6月30日和2023年6月30日：
下表按重要产品类型列出了截至2024年和2023年9月30日的三个月和九个月期间的营业收入：
| 截至9月30日的三个月 | 截至9月30日的九个月 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 油品销售 | $ | $ | ||||||||||||||
| 天然气销售 | ( | ) | ||||||||||||||
| 天然气液体 销售 | ||||||||||||||||
| 来自 客户的总营业收入 | $ | $ | ||||||||||||||
有
五百零二万五千五百零五股Sonnet BioTherapeutics Holdings，Inc.的每股股份已发行和流通，截至2024年8月14日。
注意 3 – 石油和燃气资产
截至2024年9月30日的三个月和九个月内，公司记录了耗尽费用$
地理 资讯
目前，该公司在美国拥有资产。以下是截至2024年9月30日九个月的收入及2024年9月30日长期资产（扣除耗竭、摊销和减值）:
| 截至2024年9月30日的九个月 | 截至2024年9月30日 | |||||||
| 收入 | 长期资产，净值 | |||||||
| 美国 | $ | $ | ||||||
| 总计 | $ | $ | ||||||
营收 及归属于公司对Hupecol Meta LLC（「Hupecol Meta」）的投资及其在哥伦比亚的基础 资产和业务的长期资产，均不包括在上述表格中。
| 8 |
注意事项 4 - 股权投资
The Company’s carrying value of its holdings in Hupecol Meta is reflected in the line item “equity investment – Hupecol Meta LLC” on the Company’s Consolidated Balance Sheet.
During
the three months ended September 30, 2024, the Company made capital contributions totaling $
In 2008, the Company adopted the Houston American Energy Corp. 2008 Equity Incentive Plan (the “2008 Plan”). The terms of the 2008 Plan, as amended in 2012 and 2013, allow for the issuance of up to shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.
In 2017, the Company adopted the Houston American Energy Corp. 2017 Equity Incentive Plan (the “2017 Plan”). The terms of the 2017 Plan, allow for the issuance of up to shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.
In 2021, the Company adopted the Houston American Energy 2021 Equity Incentive Plan (the “2021 Plan” and, together with the 2008 Plan and the 2017 Plan, the “Plans”). The terms of the 2021 Plan allow for the issuance of up to shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.
Persons eligible to participate in the Plans are key employees, consultants and directors of the Company.
The Company periodically grants options to employees, directors and consultants under the Plans and 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 Activity
| Options | Weighted-Average Exercise Price |
Aggregate Intrinsic Value | ||||||||||
| Outstanding at January 1, 2024 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | ||||||||||||
| Expired | ( | ) | ||||||||||
| Outstanding at September 30, 2024 | $ | $ | ||||||||||
| Exercisable at September 30, 2024 | $ | $ | ||||||||||
During the nine months ended September 30, 2024, options to purchase an aggregate of shares of the Company’s common stock were granted to the Company’s directors. The options have a life, are exercisable at $ per share, The grant date fair value of these stock options was $ based on the Black-Scholes Option Pricing model based on the following assumptions: market value of common stock on grant date – $; risk free interest rate based on the applicable US Treasury bill rate – %; dividend yield – %; volatility factor based on the trading history of the Company – %; weighted average expected life in years – ; and expected forfeiture rate – %.
During the three and nine-months ended September 30, 2024, the Company recognized $ and $, respectively, of stock-based compensation expense attributable to the vesting amortization of stock options. As of September 30, 2024, total unrecognized stock-based compensation expense related to non-vested stock options was approximately $. The unrecognized expense is expected to be recognized over a weighted average period of years and the weighted average remaining contractual term of the outstanding options and exercisable options at September 30, 2024 is years and years, respectively.
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As of September 30, 2024, there were shares of common stock available for issuance pursuant to future stock or option grants under the Plans.
Stock-Based Compensation Expense
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Stock-based compensation expense included in general and administrative expense | $ | $ | $ | ||||||||||||
| Earnings per share effect of share-based compensation expense – basic and diluted | $ | ) | ) | $ | ) | ) | |||||||||
NOTE 6 – CAPITAL STOCK
Warrants
A summary of warrant activity and related information for 2024 is presented below:
| Warrants | Weighted-Average Exercise Price | Aggregate Intrinsic Value | ||||||||||
| Outstanding at January 1, 2024 | $ | |||||||||||
| Issued | ||||||||||||
| Exercised | ||||||||||||
| Expired | ||||||||||||
| Outstanding at September 30, 2024 | $ | $ | ||||||||||
| Exercisable at September 30, 2024 | $ | $ | ||||||||||
Earnings (loss) per common share-basic is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Net income (loss) per common share-diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing net (loss) income by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net income (loss) per common share-diluted considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares, as defined above, would have an anti-dilutive effect.
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Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Numerator: | ||||||||||||||||
| Net (loss) income | $ | ( | ) | $ | ( | ) | ||||||||||
| Effect of common stock equivalents | ||||||||||||||||
| Net (loss) income adjusted for common stock equivalents | $ | ( | ) | $ | ( | ) | ||||||||||
| Denominator: | ||||||||||||||||
| Weighted average common shares – basic | ||||||||||||||||
| Dilutive effect of common stock equivalents: | ||||||||||||||||
| Options and warrants | ||||||||||||||||
| Denominator: | ||||||||||||||||
| Weighted average common shares – diluted | ||||||||||||||||
| (Loss) earnings per common share – basic | $ | ) | $ | ) | ||||||||||||
| (Loss) earnings per common share – diluted | $ | ) | $ | ) | ||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Stock warrants | ||||||||||||||||
| Stock options | ||||||||||||||||
| Total | ||||||||||||||||
NOTE 8 – COMMITMENTS AND CONTINGENCIES
Lease Commitment
The
Company leases office facilities under an operating lease agreement that expires
| Year | Amount | |||
| 2024 | ||||
| 2025 | ||||
| Total future lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of future operating lease payments | ||||
| Less: current portion of operating lease liabilities | ( | ) | ||
| Operating lease liabilities, net of current portion | $ | |||
| Right of use assets | $ | |||
Total
base rental expense was $
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| 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 three months ended September 30, 2024, 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 we express 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 herein and in our Form 10-K for the year ended December 31, 2023.
Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Form 10-Q to be accurate as of the date hereof. Changes may occur after that date, and we will not update that information except as required by law in the normal course of our public disclosure practices.
Additionally, the following discussion regarding our 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 Item 7 of Part II of our Form 10-K for the fiscal year ended December 31, 2023.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. We believe certain critical accounting policies affect the more significant judgments and estimates used in the preparation of our financial statements. A description of our critical accounting policies is set forth in our Form 10-K for the year ended December 31, 2023. As of, and for the three months ended, September 30, 2024, there have been no material changes or updates to our critical accounting policies.
Recent Developments
Drilling and Operating Activity
During the three months ended September 30, 2024, no drilling activities were conducted on properties of Hupecol Meta. At September 30, 2024, we had 4 wells on production in the U.S. Permian Basin.
Our Frost 2-H well was reworked during the quarter to repair its electric submersible pump.
In June 2024, the Company entered into a joint venture agreement with EOG Resources, Inc. (“EOG”) with respect to the drilling of six wells on the State Finkle Unit in the Wolfcamp formation in Reeves County, Texas. During June 2024, the Company elected to participate in all six wells.
Pursuant to the joint venture agreement, EOG will act as operator of the unit and is the principal working interest owner in the unit. The unit includes acreage subject to our existing O’Brien lease. We will hold an approximately 0.00370542% working interest in the unit, which is less than previously disclosed due to title issues. The first well was scheduled to spud June 23, 2024 with all six wells anticipated to be in production by the second quarter of 2025. Houston American’s cost of participating in the drilling program is estimated at $550,000. Drilling activity continued during the quarter.
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Operations, Planned Drilling and Divestiture in Colombia
At September 30, 2024, Hupecol Meta operated four wells in the Venus Exploration Area of the CPO-11 block in Colombia. Each of the four wells operated by Hupecol Meta were shut-in from February 20 to March 18, 2024 as a result of a dispute with local residents regarding maintenance of the road serving the wells.
During the quarter, Hupecol Meta drilled the Jupiter 1 well, which resulted in a dry hole.
We own an approximately 18% interest in Hupecol Meta, representing an approximately 16% interest in the wells operated in the Venus Exploration Area. We do not report results of Hupecol Meta in our consolidated operating results but include our investment in Hupecol Meta on our balance sheet as “Equity Investment – Hupecol Meta” with distributions from Hupecol Meta reported as “Other Income” on our Statement of Operations.
Hupecol Meta has advised that it intends to evaluate potential monetization or some form of divestiture of its assets in Colombia, including the interest in the CPO-11 block held by Hupecol Meta. Pending the outcome of Hupecol Meta’s evaluation of, and potential efforts regarding, divestiture or monetization of the CPO-11 block in the fourth quarter of 2024, we have no planned drilling operations, or other planned operations, in Colombia. As a result, we expect to continue to operate our existing wells in the CPO-11 block. There is no assurance as to the timing or outcome of Hupecol Meta’s potential monetization or divestiture of assets.
Capital Investments
During the quarter ended September 30, 2024, our capital investment expenditures totaled $1,072,364, attributable to investments in our equity investment in Hupecol Meta LLC (“Hupecol Meta”).
Distributions from Equity Investment
During the three and nine months ended September 30, 2024, we received distributions, totaling $268,817 and $922,959, respectively, from Hupecol Meta, representing our share of distributable net income and reflected as “Other Income” on our Statement of Operations.
Management and Board Changes
On November 11, 2024, subsequent to the period covered by this report, we sold 2,180,180 shares of our common stock to one investor for aggregate proceeds of approximately $2.5 million. In connection with this transaction, John F. Terwilliger resigned as Chief Executive Officer (“CEO”), and Peter Longo was appointed as CEO. Mr. Terwilliger remains an advisor to the Company until the end of this year. Also, as part of the foregoing transaction, Mr. Terwilliger received $800,000 in exchange for the waiver of certain claims pursuant to his change in control agreement with the Company. In addition, James A. Schoonover resigned as a director on November 11, 2024, and Robert J. Bailey was appointed as a director.
Results of Operations
Oil and Gas Revenues. Total oil and gas revenues increased 15% to $130,239 in the three months ended September 30, 2024, compared to $112,994 in the three months ended September 30, 2023. Oil and gas revenues declined 28% to $393,729 in the nine months ended September 30, 2024, compared to $547,408 for the nine months ended September 30, 2023. The change in revenue was due to decreases in average sales price of natural gas (down 92%), oil production (down 28%), and natural gas production (down 13%), and partially offset by an increase in average sales price of oil (up 6%).
The following table sets forth the gross and net producing wells, net oil and gas production volumes and average hydrocarbon sales prices for the quarters ended September 30, 2024 and 2023:
Nine Months Ended September 30,(1) | Three Months Ended September 30,(1) | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Gross producing wells | 4 | 4 | 4 | 4 | ||||||||||||
| Net producing wells | 0.68 | 0.68 | 0.68 | 0.68 | ||||||||||||
| Net oil production (Bbl) | 4,101 | 5,667 | 1,411 | 1,308 | ||||||||||||
| Net gas production (Mcf) | 34,883 | 40,188 | 13,719 | 6,732 | ||||||||||||
| Average sales price – oil (per barrel) | $ | 76.70 | $ | 72.09 | $ | 77.29 | $ | 73.01 | ||||||||
| Average sales price – natural gas (per Mcf) | $ | 0.11 | $ | 1.33 | $ | - | $ | 1.72 | ||||||||
| (1) | All well, production and price information excludes wells operated by Hupecol Meta. |
The change in production volumes was primarily attributable to the natural decline in production.
The change in average oil and natural gas sales price realized reflects global energy trends.
Oil and gas sales revenues are entirely attributable to our U.S. properties.
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Lease Operating Expenses. Lease operating expenses increased 78% to $229,210 during the three months ended September 30, 2024, from $128,918 during the three months ended September 30, 2023. Lease operating expenses increased 55% to $534,443 during the nine months ended September 30, 2024, from $344,318 during the nine months ended September 30, 2023. The increase in lease operating expenses was attributable to additional severance tax expense from prior periods and an increase in production expenses during the nine months ended September 30, 2024.
Lease operating expenses are entirely attributable to our U.S. properties and exclude lease operating expenses of Hupecol Meta.
Depreciation and Depletion Expense. Depreciation and depletion expense was $39,994 and $23,749 for the three months ended September 30, 2024 and 2023, respectively, and $103,079 and $115,645 for the nine months ended September 30, 2024 and 2023, respectively. The change in depreciation and depletion was principally due to the decline in oil production during the nine months ended September 30, 2024.
General and Administrative Expenses (excluding stock-based compensation). General and administrative expense decreased by 10% to $280,260 during the three months ended September 30, 2024 from $312,344 during the three months ended September 30, 2023, and decreased 22% to $930,401 during the nine months ended September 30, 2024, from $1,196,463 during the nine months ended September 30, 2023. The decrease in general and administrative expense was primarily attributable to a bonus of $200,000 paid to our CEO in the second quarter of 2023, which was not repeated this year.
Stock-Based Compensation. Stock-based compensation decreased to $19,048 during the three months ended September 30, 2024 and $82,461 during nine months ended September 30, 2024 from $95,205 during the three months ended September 30, 2023 and $212,982 during the nine months ended September 30, 2023.
Other Income (Expense). Other income/expense, net, totaled $293,505 of income during the three months ended September 30, 2024, compared to $626,052 of income during the three months ended September 30, 2023, and totaled $1,007,102 during the nine months ended September 30, 2024, compared to $1,349,162 during the nine months ended September 30, 2023. Other income consisted of equity investment distributions totaling $922,959 and $1,235,101, respectively, from Hupecol Meta, representing our share of distributable net income for the nine months ended September 30, 2024 and 2023, respectively, and interest income on cash balances during the nine months ended September 30, 2024 and 2023. In mid-October 2024 the Company received a notification for a cash call from Hupecol Meta, LLC for the amount of $859,246 for anticipated costs related to the Jupiter #1 well.
Financial Condition
Liquidity and Capital Resources. At September 30, 2024, we had a cash balance of $2,847,296 and working capital of $2,772,692, compared to a cash balance of $4,059,182 and working capital of $3,917,231 at December 31, 2023.
Cash Flows. Operating activities used $139,522 of cash during the nine months ended September 30, 2024, compared to cash outflows of $211,463 during the nine months ended September 30, 2023. The change in operating cash flow was primarily attributable to a bonus of $200,000 paid to our CEO in the second quarter of 2023, which was not repeated this year.
Investing activities used cash of $1,072,364 during the nine months ended September 30, 2024, compared to $1,954,515 used during the nine months ended September 30, 2023. Cash used in investing activities for both periods was attributable to investments in Hupecol Meta to support our share of costs in Colombia.
Financing activities provided $0 during the nine months ended September 30, 2024, compared to $1,652,000 provided during the nine months ended September 30, 2023. Cash provided by financing activities during the nine months ended September 30, 2023 was attributable to funds received from the sale of common stock in the company’s 2022 ATM offering.
Long-Term Liabilities. At September 30, 2024, we had long-term liabilities of $71,620, compared to $152,904 at December 31, 2023. Long-term liabilities at September 30, 2024 and December 31, 2023, consisted of a reserve for plugging costs and the long-term lease liability.
Capital and Exploration Expenditures and Commitments. Our principal capital and exploration expenditures relate to ongoing efforts to acquire, drill and complete prospects. During 2023, capital expenditures relating to Hupecol Meta increased with our investments in Hupecol Meta to fund our share of costs associated with the initial wells drilled on the CPO-11 block. Based on discussions with Hupecol Meta, we anticipate that one additional vertical well will be drilled on the CPO-11 block by the end of 2024 pending efforts by Hupecol Meta to monetize its interest in the CPO-11 block. Our costs relating to the drilling of such well is estimated at approximately $550,000. There are no present plans to conduct additional drilling operations on our U.S. properties. The actual timing and number of well operations undertaken, if any, will be principally controlled by the operators of our acreage based on a number of factors, including but not limited to availability of financing, performance of existing wells on the subject acreage, energy prices and industry condition and outlook, costs of drilling and completion services and equipment and other factors beyond our control or that of our operators.
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In addition to possible operations on our existing acreage holdings, we continue to evaluate drilling prospects in which may acquire an interest and participate.
During the three months ended September 30, 2024, we invested $1,072,364 for the acquisition and development of oil and gas properties, consisting of capital contributions to Hupecol Meta. The $1,072,364 invested in Hupecol Meta was capitalized to our equity investment in Hupecol Meta.
As our allocable share of well costs will vary depending on the timing and number of wells drilled as well as our working interest in each such well and the level of participation of other interest owners, we have not established a drilling budget but will budget on a well-by-well basis as our operators propose wells. We believe that we have the ability, through our cash on-hand, to fund operations and our cost for all planned wells expected to be drilled during 2024.
In the event that we pursue additional acreage acquisitions or expand our drilling plans, we may be required to secure additional funding beyond our resources on hand. While we may, among other efforts, seek additional funding from “at-the-market” sales of common stock, and private sales of equity and debt securities, we presently have limited authorized shares of common stock available for issuance to support equity capital raises and we have no commitments to provide additional funding, and there can be no assurance that we can secure the necessary capital to fund our share of drilling, acquisition or other costs on acceptable terms or at all. If, for any reason, we are unable to fund our share of drilling and completion costs and fail to satisfy commitments relative to our interest in our acreage, we may be subject to penalties or to the possible loss of some of our rights and interests in prospects with respect to which we fail to satisfy funding commitments and we may be required to curtail operations and forego opportunities.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements or guarantees of third party obligations at September 30, 2024.
| ITEM 3 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Commodity Price Risk
The price we receive for our oil and gas production heavily influences our revenue, profitability, access to capital and future rate of growth. Crude oil and natural gas are commodities and, therefore, their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand. Historically, the markets for oil and gas have been volatile, and these markets will likely continue to be volatile in the future. The price we receive for production depends on numerous factors beyond our control.
We have not historically entered into any hedges or other transactions designed to manage, or limit, exposure to oil and gas price volatility.
| 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, 2024 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 not effective as of September 30, 2024. Such conclusion reflects the 2013 departure of our chief financial officer and assumption of duties of principal financial officer by our chief executive officer and the resulting lack of an appropriate level of accounting knowledge and experience commensurate with the financial reporting requirements for a public company, in particular with respect to technical accounting knowledge regarding accounting for certain transactions, and a related lack of segregation of duties. Until we are able to remedy these material weaknesses, we are relying on third party consultants to assist with financial reporting.
| 15 |
Changes in Internal Control over Financial Reporting
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, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
| ITEM 6 | EXHIBITS |
| Exhibit | Number | Description | |
| 31.1 | Certification of CEO and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
| 32.1 | Certification of CEO and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
| 101.INS | Inline XBRL Instance Document | ||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| 16 |
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. | ||
| Date: November 14, 2024 | ||
| By: | /s/ Steve Hartzell | |
| Steve Hartzell | ||
| Chairman of the Board and Principle Financial Officer | ||
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