Houston American Energy Corp Reports 30% Revenue Decline and Impairment Charges for Fiscal Year 2024

Houston American Energy Corp reported a significant decline in its financial performance for the fiscal year ending December 31, 2024. The company generated total oil and gas revenues of $560,180, a decrease of 30% from $794,027 in 2023. This decline was attributed to an 18% drop in oil production and an 11% decrease in gas production, alongside a dramatic 99% fall in the average sales price of natural gas, which plummeted to $0.17 per Mcf from $1.38 in the previous year. The average oil price also saw a slight decrease, falling to $73.08 per barrel from $74.08.

In terms of operational metrics, Houston American Energy's net oil production totaled 5,992 barrels, while net gas production was recorded at 53,476 Mcf. The company maintained four gross producing wells in the U.S. and reported a total of 1,252 barrels of oil equivalent (boe) in net proved reserves. However, the company faced challenges in its Colombian operations, leading to an impairment charge of $6,392,874 on its investment in Hupecol Meta, which was deemed no longer viable. This impairment was part of a broader $6,668,634 impairment charge that also included $275,760 related to U.S. assets.

Strategically, Houston American Energy has been focusing on acquisitions and partnerships to enhance its portfolio. In late 2024, the company entered into non-binding letters of intent for the acquisition of Abundia Global Impact Group, LLC, and RPD Technologies, LLC, which are expected to diversify its operations into the energy transition sector. The company anticipates that these acquisitions will close in the second quarter of 2025, pending shareholder approval. Additionally, the company has been actively managing its resources through opportunistic acquisitions and divestitures, although it has not operated any wells in the U.S. during 2023.

The company’s operational challenges were compounded by increased lease operating expenses, which rose by 24% to $747,559 in 2024, primarily due to inflation-related increases and costs associated with new well developments. General and administrative expenses also increased by 32% to $2,123,051, largely due to a payment made to the former CEO. Despite these challenges, Houston American Energy reported a cash balance of $2,960,151 and working capital of $3,072,783 as of December 31, 2024, although this represented a decline from the previous year.

Looking ahead, Houston American Energy's management has expressed cautious optimism regarding its future operations, particularly with the anticipated production from new wells in the U.S. and the potential monetization of its Colombian assets. However, the company remains vulnerable to fluctuations in energy prices and operational risks associated with its drilling activities. The outlook for the company will largely depend on its ability to successfully execute its acquisition strategy and improve production levels while managing costs effectively.