Houston American Energy Corporation (NYSEMKT: HUSA) To Seek Financial Alternatives


Delays to commence work at Houston American Energy Corporation (NYSEMKT: HUSA)’s Serrania block in Colombia have triggered a need for review of the company’s strategic alternatives. One of the measures is that the company could put itself on the block entirely or divest itself of certain assets. Merger and acquisition transactions are also being considered.

The need for Houston American Energy Corporation (NYSEMKT: HUSA) to pursue strategic alternatives stems from delays to commence drilling at the Serrania block. In particular, it has been difficult for Houston American Energy’s operator to secure environmental permit required before work can begin in the block.

Financial alternatives for Houston American Energy Corporation (NYSEMKT: HUSA)

To cope with the disruption, the board of Houston American Energy Corporation (NYSEMKT: HUSA) has approved a strategic review process. Among the alternatives to be considered include acquisitions, mergers or sale of assets or even total sale of the company.

The board determined the need for the strategic review after it received notification about the challenge to obtain environment license for the Serrania block.

The delays to secure the critical permit has led Houston American Energy Corporation (NYSEMKT: HUSA) to warn that it doesn’t see itself beginning drilling at Serrania block this year as it had previously planned. In pursue strategic alternatives are determined by the board, Houston American Energy’s CEO, John Boylan, said the idea was to maximize value for the shareholders.

Significant oil and gas assets

If it is about acquisition, the CEO hinted that Houston American Energy Corporation (NYSEMKT: HUSA) would be interested in acquiring significant oil and gas assets. Management also appears to be betting that the company’s simple capital structure and the fact that it doesn’t have a debt would make it attractive for merger partners. Perhaps the company’s healthy balance sheet could also make it attractive for buyout firms.

Business advisor

As part of the strategic review, Houston American Energy Corporation (NYSEMKT: HUSA) has retained a business development advisor to help it identify the best strategic transaction.


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