Houston American Energy (HUSA) is an oil and gas exploration and production company that operates inland in the US Gulf Coast region of Texas and Louisiana and in Colombia, South America. The company's wells in the US produce primarily natural gas while its interests in Colombia account for all of the company's oil production and nearly all of the company's total revenue. The company operates eight oil wells in Colombia and seven gas wells in the US. The company's oil operations in Colombia dwarf their US gas operations, accounting for 99.5% of total revenues.
Houston American Energy's sales more than doubled in 2010 as a result of twelve new oil wells in Colombia that came on-line during the year and higher oil prices, which prevented any work stoppages like as the 52-day stoppage that occurred in 2009 as a result of low oil prices. Oil prices in 2009 dropped so low that it was not profitable for the company to operate its wells, causing the work stoppage.
The largest factor affecting the future prospects of Houston American Energy is the stability of Colombia. Although the country is now at peace following a long and bloodstained civil war, it has less than enjoyed less than ten years of relative stability. The current president, Juan Manuel Santos, has courted foreign investment and the country's economy is rapidly growing as a result of its oil resources. However, HUSA is a small company competing against much bigger players in oil production and operates at the mercy of Colombia's regulatory bodies and government policies. Colombia's continued stability and growing prosperity will be vital to the future success of Houston American Energy.
Unlike some of its competitors, Houston American Energy owns relatively small shares of the oil fields in which it operates. The company owns interests in certain fields in Colombia, however most of the actual mining operations are carried out by the company's main in-country partner, Hupecol. As such, the company is susceptible to shut-downs implemented by Hupecol, such as the 52-day stoppage that occurred in 2009 when oil prices fell too low. As minority owners not involved in the actual pumping of oil, HUSA's fortunes heavily depend on its Colombian partners. In addition, the majority of the company's value is based on its potential reserves, many of which remain unproven.
The company peripherally competes against many of the larger oil exploration and production companies, however the two highlighted above have significant interests in Colombia.