June 25, 2008
Knobias Clip Report (06-24-2008)
By admin
Submitted By Knobias ClipReport
HUSA: Completes Sale of Caracara Prospect
Tuesday’s session began with a quick selloff on the news out of UPS cutting guidance on lower package volumes and higher energy prices in the US. Other news included Kodak’s decision to buyback a $1B in common and Dow Chemical’s price hike. Midday the Dow reversed course by over 100 points before selling off, once again, to finish the day down over 33 points.
On housing, data from the Federal Housing Enterprise Oversight noted that prices fell 4.6% in April. The number marked the largest decline ever in the agency’s monthly index which dates back to January of 1991. The Case Schiller 20-city home price index showed composite price declines of 15.3% for April compared to 14.4% in March.
In the energy space, one name reached a new 52 week high on some fairly interesting news. Houston American Energy Corp. (HUSA) is an independent energy company with interests in oil and natural gas wells and prospects. The Company’s business strategy includes a property mix of producing and non-producing assets with a focus on Texas, Louisiana and Colombia.
On Tuesday, the Company reported the completion of the sale of its interest in the Caracara Contract in Colombia. The manager of Hupecol Caracara LLC, the owner/operator of the Caracara Prospect, advised Houston American of the closing of the previously announced sale at a sales price of $920 million adjusted for oil price fluctuations and operations between the effective date and the closing date.
Houston American will receive its 1.594674% interest in the net proceeds of the sale after provision for Colombian taxes and after deduction of all fees and expenses of the sale.
In addition, Houston American has been informed that the National Hydrocarbon Agency of Colombia (ANH) has awarded the La Cuerva Contract to Hupecol Caracara LLC. This contract area is about 75 square miles and will require an initial capital commitment of about $8 million dollars for seismic and the drilling of two wells. Houston American will own its 1.594674% interest in this contract through its continuing ownership of Hupecol Caracara LLC.
With the completion of the sale and the grant of the additional contract, the Company can now focus on the development of their other Columbian Prospects and be able to fund its portion of the costs associated with the development of those properties.
Following the news, shares gapped at the open to a new high of $9.54 before losing the gain and closing at $9.20, down over 2% on the day. Since April, shares have more than doubled in value.
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