Houston American (HUSA) to Cease Tamandua #1 C7, C9 Formation Testing; Updates on SEc Investigation
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Houston American Energy Corp (AMEX: HUSA) today announced that a determination has been made to cease efforts to test and complete the C7 and C9 formations in the Tamandua #1 sidetrack well. Despite favorable Logging-While-Drilling logs, cased-hole logs and mudlog shows, it was determined that continued investment in testing and completion is inadvisable at this time possibly due to formation damage while drilling. The Company is encouraged, however, by the information gained from this well for the other prospects on the block. The Tamandua #1 wellbore will be preserved in a way to allow for further evaluation, if at such time in the future it is determined that it is warranted.
The Company also announced that efforts are commencing to move the drilling rig from the Tamandua #1 well site to the location of the next prospect on the CPO 4 block. This next well is expected to spud in the May/June time frame. The Company expects that the data gained during the drilling, evaluation and testing of the Tamandua #1 well will be used to significantly help with future operations on the CPO 4 block.
The Company also confirmed that the Securities and Exchange Commission ("SEC") is conducting a non-public formal investigation into the Company. The Company's confirmation of such investigation follows receipt of information by the Company that third parties had become aware of the investigation.
Pursuant to the investigation, in February and April of 2012, the Company received three subpoenas issued by the SEC. The subpoenas called for the testimony of the Company's chief executive officer and chief financial officer and the delivery of certain documents. The subpoenas were issued pursuant to a nonpublic formal order of private investigation issued by the SEC on March 1, 2011, which followed a nonpublic informal inquiry commenced by the SEC in October 2010. The Company received a copy of the nonpublic formal order of private investigation on February 10, 2012 in connection with the February 2012 subpoena issued by the SEC. Although the Company cannot be certain of the scope of the investigation, the SEC is trying to determine whether there have been any violations of the federal securities laws. The investigation does not represent a conclusion by the staff that there have been any violations of the federal securities laws nor whether the staff would conclude that any enforcement action is appropriate. At this time, the Company has not been made aware of a finding by the SEC of any securities violations. Also, as stated in the subpoenas issued by the SEC, the investigation does not mean that the SEC has a negative opinion of any person, entity or security. The Company has cooperated fully, and is committed to continuing to cooperate fully, with the SEC in this matter. It is not possible at this time to predict the timing or outcome of the SEC investigation, including whether or when any proceedings might be initiated, when these matters may be resolved or what, if any, penalties or other remedies may be imposed, and whether any such penalties or remedies would have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows.
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The Company also announced that efforts are commencing to move the drilling rig from the Tamandua #1 well site to the location of the next prospect on the CPO 4 block. This next well is expected to spud in the May/June time frame. The Company expects that the data gained during the drilling, evaluation and testing of the Tamandua #1 well will be used to significantly help with future operations on the CPO 4 block.
The Company also confirmed that the Securities and Exchange Commission ("SEC") is conducting a non-public formal investigation into the Company. The Company's confirmation of such investigation follows receipt of information by the Company that third parties had become aware of the investigation.
Pursuant to the investigation, in February and April of 2012, the Company received three subpoenas issued by the SEC. The subpoenas called for the testimony of the Company's chief executive officer and chief financial officer and the delivery of certain documents. The subpoenas were issued pursuant to a nonpublic formal order of private investigation issued by the SEC on March 1, 2011, which followed a nonpublic informal inquiry commenced by the SEC in October 2010. The Company received a copy of the nonpublic formal order of private investigation on February 10, 2012 in connection with the February 2012 subpoena issued by the SEC. Although the Company cannot be certain of the scope of the investigation, the SEC is trying to determine whether there have been any violations of the federal securities laws. The investigation does not represent a conclusion by the staff that there have been any violations of the federal securities laws nor whether the staff would conclude that any enforcement action is appropriate. At this time, the Company has not been made aware of a finding by the SEC of any securities violations. Also, as stated in the subpoenas issued by the SEC, the investigation does not mean that the SEC has a negative opinion of any person, entity or security. The Company has cooperated fully, and is committed to continuing to cooperate fully, with the SEC in this matter. It is not possible at this time to predict the timing or outcome of the SEC investigation, including whether or when any proceedings might be initiated, when these matters may be resolved or what, if any, penalties or other remedies may be imposed, and whether any such penalties or remedies would have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows.
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