Houston American Energy (US:HUSA)2024-04-02 17:42Revenue and Production - Total oil and gas revenues decreased 52% to $794,027 in 2023 from $1,638,841 in 2022, driven by a 25% decline in oil production and a 22% decline in gas production [181]. - Average sales price of oil decreased by 20% to $74.08 per barrel, while average sales price of natural gas decreased by 73% to $1.38 per Mcf [182]. Expenses - Lease operating expenses decreased 11% to $473,925 in 2023 from $531,675 in 2022, primarily due to decreased production [183]. - Depreciation and depletion expense decreased by 18% to $167,527 in 2023 from $205,458 in 2022, also attributed to reduced production [185]. - General and administrative expenses increased by 17% to $1,614,245 in 2023 from $1,374,060 in 2022, primarily due to a salary increase for the CEO and higher legal fees [187]. - An impairment charge of $537,686 was incurred in 2023 due to declines in energy prices and production related to Reeves County properties [170]. - Impairment expense of $537,686 and loss on disposal of oil and gas properties of $2,343,126 were realized in 2023 due to declines in energy prices and production [186]. Investments and Distributions - Capital investment expenditures for 2023 totaled $2,403,219, all related to direct investments in Hupecol Meta [164]. - Distributions from Hupecol Meta amounted to $1,220,954 in 2023, representing the company's share of distributable net income [165]. - Other income rose significantly to $1,369,519 in 2023 from $33,641 in 2022, driven by equity investment distributions from Hupecol Metal [188]. - Investing activities used cash of $2,403,219 in 2023, up from $1,661,405 in 2022, attributed to investments in Hupecol Meta [193]. - Capital expenditures related to Hupecol Meta increased, with an estimated $500,000 planned for an additional vertical well by mid-2024 [196]. Cash Flow and Financing - Operating activities generated cash of $263,191 in 2023, compared to cash used of $228,962 in 2022, mainly due to increased other income [192]. - Financing activities provided cash of $1,652,000 in 2023, compared to $1,543,000 in 2022, from the sale of common stock [194]. - Long-term liabilities decreased to $134,167 in 2023 from $219,148 in 2022, consisting of a reserve for plugging costs and a lease liability [195]. Production Plans and Assets - At December 31, 2023, the company had 4 wells on production in the U.S. Permian Basin and 4 wells on production in Colombia [162][163]. - The company plans to drill one additional vertical well on the CPO-11 block in Colombia by mid-2024, pending evaluation of asset monetization [166]. - The company has less than 200,000 authorized shares of common stock available for issuance to support equity capital raises as of December 31, 2023 [199]. Risk Management - The company has not historically entered into hedges or other derivative instruments to manage oil and gas price volatility [201].