Houston American tries again in Colombia
Still fighting: Houston American Energy to test new well at its ‘sole risk’
Luke Johnson 28 June 2012 19:50 GMT
The company said on Thursday that its Cachirre #1 well, spud last month, hit a total measured depth of 9486 feet.
Houston American said its two partners in the well, SK Innovation and Gulf United Energy, have both “elected to cease testing the Cachirre #1 well and therefore would propose to abandon the well at this point in time”.
“Houston American Energy disagrees with this decision” and plans to test the C-9 sand in the well at its “sole risk”, although it has deemed the other objective sands in the well “to be non-productive”. It will bear the full cost of testing and completion.
If the well is a success, the operator will bank full production of the well until it has recouped 900% of its testing and completion costs. Results of the well are expected to be available in 10 days.
It has not been a good 12 months for Houston American. The first well it drilled on the CPO 4 block, Tamandua #1, experienced “formation damage” that ultimately forced the company to abandon the well.
In March, chief executive John Terwilliger fended off rumours that the company was on the brink of bankruptcy and talked up what he called “a valuable portfolio of prospects”.
The Houston-based company announced in April that the Securities and Exchange Commission had launched a non-public formal investigation after its stock plummeted following its troubles in Colombia.
“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,” the company said at the time.
The stock was trading on the NYSE-AMEX at a 52-week high of $20.88 on 7 July last year. It opened on Thursday at 75 cents, a 52-week low, but was up to $1.13 late Thursday afternoon.