Business Context and Reporting Period
This Form 8-K was filed by Houston American Energy Corp. on October 11, 2006. The report provides an update on drilling operations at the Cabiona prospect in Colombia, where the Company holds a 12.5% interest through Hupecol Dorotea and Cabiona LLC (HDC LLC).
Key Financial and Operational Metrics
- Well Completion: The Cabiona A4 well was completed on October 6, 2006, at a total depth of 4,523 feet in the C5 Sand.
- Test Results: The well produced approximately 565 barrels of oil during testing.
- Production Status: Turned to production on October 9, 2006. Initial rates varied between 800 and 1,200 barrels per day, with 60% to 80% being oil.
- Operational Note: The well is currently cleaning up; a stable production rate has not yet been established.
- Future Drilling Plan: Hupecol LLC plans to drill 39 wells in Colombia by the end of 2007 using two rigs. The Company holds a 12.5% Working Interest in 23 of these wells and a 1.6% Working Interest in 16 wells.
Material Changes
The filing reports the successful completion and initial production of the Cabiona A4 well, marking a transition from drilling to production for this specific asset. The drilling rig has moved to the Cabiona 8 location to commence the next phase of operations.
Outlook and Management Commentary
Management indicates that the Company will provide quarterly updates on its Colombian activities. The immediate focus is on stabilizing production rates at the Cabiona A4 well and commencing drilling at the Cabiona 8 location as soon as possible.
Investor Verification Checklist
- Verify the timeline for establishing a stable production rate at the Cabiona A4 well.
- Confirm the commencement date for drilling at the Cabiona 8 location.
- Monitor the quarterly updates regarding the progress of the planned 39 wells in Colombia.
- Review the specific terms of the 12.5% and 1.6% Working Interests to understand revenue exposure.