Filing identity and reporting period
The supplied filing is Houston American Energy Corp.’s unaudited Form 10-Q for the quarter and six months ended June 30, 2021. This does not match the request metadata naming Abundia Global Impact Group, Inc.; verify the issuer and filing before relying on this summary.
Financial performance and position
| Metric | Q2 2021 | Six months ended June 30, 2021 |
|---|---|---|
| Oil and gas revenue | $303,999 | $632,487 |
| Operating loss | $46,131 | $324,981 |
| Net loss | $45,344 | $313,820 |
| Net loss attributable to common shareholders | $45,344 | $351,021 |
| Basic and diluted loss per share | $0.00 loss | $0.04 loss |
| Cash used in operating activities | Six-month amount: $527,759 | |
| Cash used in investing activities | Six-month amount: $166,949 | |
| Cash provided by financing activities | Six-month amount: $4,570,888 |
At June 30, 2021, cash was $5.12 million, working capital was $5.35 million, total assets were $11.15 million, and total liabilities were $443,622. Liabilities included $322,490 of operating lease obligations and a $68,209 plugging-and-abandonment reserve; the filing reports no notes payable outstanding. Shareholders’ equity was $10.71 million.
Changes versus the prior comparable period
Revenue increased 290% in Q2 and 181% for the first half versus 2020. Management attributed the increases to higher oil production and improved commodity prices, partly offset by lower natural gas production. For the first half, net oil production rose to 8,295 barrels from 4,502, while natural gas production fell to 25,738 Mcf from 39,526. Average realized oil and gas prices also increased. The 2020 six-month comparison included a $429,116 property impairment; there was no impairment in 2021. First-half operating cash use declined modestly from $567,439 to $527,759.
Cash increased from $1.24 million at year-end 2020, principally after the company raised $6.58 million net from two at-the-market common-stock offerings. It used $1.97 million to redeem its remaining Series A and Series B preferred stock and paid $37,201 in preferred dividends. Common shares outstanding rose from 6,977,718 to 9,923,338 during the first half.
Outlook, risks, and notable items
- Management said cash on hand was expected to cover operating costs and anticipated drilling over the 12 months following issuance of the statements. It gave no formal earnings or production guidance.
- No drilling was conducted in the first half. Management anticipated Colombia CPO-11 drilling could start in mid- to late-2021; timing and activity depended on operators, financing, prices, costs, and other factors.
- The company increased its Hupecol Meta ownership to 7.85%, giving it indirect interests in the Venus Exploration Area and the remainder of Colombia’s CPO-11 block. It contributed $136,001 to the investment during the first half.
- Management cited ongoing losses, oil and gas price volatility, possible COVID-19-related demand and price declines, and the risk that additional acquisitions or expanded drilling plans could require financing. The company had no commitments for additional funding and had not historically hedged commodity-price exposure.
- Management concluded disclosure controls and procedures were not effective at June 30, 2021, citing lack of segregation of duties after the CFO’s 2013 departure and the CEO’s assumption of principal financial officer duties. The company said it relied on outside consultants and its accounting firm to assist with reporting.
- Cash deposits included $4.67 million above the stated FDIC insured limit and $7,840 in Colombian banks not insured by the FDIC. A renegotiated office lease began August 1, 2021; July 2021 also brought shareholder approval of the 2021 equity plan and new option grants.
Investor verification priorities
- Confirm the issuer identity: the filing names Houston American Energy Corp. (NYSE American: HUSA), not Abundia Global Impact Group, Inc.
- Review the ATM offering terms, net proceeds, share issuance, and resulting dilution, along with the preferred-stock redemption and dividends.
- Assess whether cash and liquidity remain sufficient for planned drilling and lease obligations, particularly if Colombia activity proceeds or financing needs expand.
- Verify the status, funding requirements, and operator schedule for CPO-11 drilling and the company’s indirect interests in the block.
- Evaluate the disclosed ineffective controls and any remediation, and monitor commodity-price, COVID-19, and uninsured-deposit risks.