SecProbe.io

CORRESP
1
filename1.htm

    formcorresp.htm

      HOUSTON
AMERICAN ENERGY CORP.

      801
TRAVIS, SUITE 1425

      HOUSTON,
TEXAS 77002

      TELEPHONE
(713) 222-6966

      FACSIMILE
(713) 222-6440

      October
2, 2008

      U.S.
Securities and Exchange Commission

      100 F
Street, N.E.

      Washington,
D.C. 20549

                Attn:

                Jennifer
      O’Brien

                RE:

                Houston
      American Energy Corp.

      Form 10-K
for Fiscal Year Ended December 31, 2007, as Amended

      Filed
March 28, 2008

      Form 10-Q
for Fiscal Quarter Ended June 30, 2008

      Filed
August 12, 2008

      Form 8-K,
Filed June 24, 2008

      File No.
1-32955

      Dear Ms.
O’Brien:

      Filed
simultaneous herewith, via EDGAR, please find Amendment No. 2 to the above
referenced Form 10-K and Amendment No. 1 to the above referenced Form
10-Q.

      Set forth
below are the Staff’s comments, as set forth in the Staff’s letter dated August
25, 2008, followed by our responses, which are numbered to correspond with the
numbers set forth in the Staff’s comment letter.

      Form 10-K for the Fiscal
Year Ended December 31, 2007

      Business, page
3

      Natural Gas and Oil
Reserves, page 8

      Comment:

                1.

                We
      note your disclosure in footnote item (2) that you provided the
      standardized measure of discounted future net cash flows attributable to
      your reserves “using prices in effect at the end of the respective periods
      presented, discounted at 10% per annum on a pre-tax
      basis.”  Based on this disclosure, it appears the measure you
      present under this heading may be a non-GAAP measure since it differs from
      the GAAP standardized measure of discounted future net cash flows as
      contemplated in SFAS 69 due to the exclusion of future income
      taxes.  As such, please modify the description of this measure
      to avoid investor confusion and include the disclosures required by Item
      10(e) of Regulation S-K, including reconciliation to the most directly
      comparable component of the standardized measure of discounted future net
      cash flows or otherwise modify your calculation and disclosure as
      necessary.

      U.S.
Securities and Exchange Commission

      October
2, 2008

      Page
2

      Company
Response:

      The
“Natural Gas and Oil Reserves” presentation has been revised to present the
standardized measure after income taxes.

      Controls and Procedures,
page 25

                2.

                We
      note your disclosure that “Based on the evaluation described above, our
      Chief Executive Officer and Chief Financial Officer have concluded that,
      as of December 31, 2007, our disclosure controls and procedures were not
      effective in ensuring that the information required to be disclosed by us
      in reports filed under the Securities Exchange Act of 1934 is recorded,
      processed, summarized and reported within the time periods specified in
      the rules and forms of the SEC.”  Please note Item 307 of
      Regulation S-K requires you to disclose your officer’s conclusions
      regarding the effectiveness of your disclosure controls and procedures as
      that term is defined in Rule 13a-15(e) of the Exchange Act.  The
      definition in Rule 13a-15(e) is more comprehensive than that included in
      your disclosure.  Specifically, the term disclosure controls and
      procedures “means controls and procedures of an issuer that are designed
      to ensure that information required to be disclosed by the issuer in the
      reports that its files or submits under the Act is recorded, processed,
      summarized and reported, within the time periods specified in the
      Commission’s rules and forms.  Disclosure controls and
      procedures include, without limitation, controls and procedures designed
      to ensure that information required to be disclosed an issuer in the
      reports that it files or submits under the Act is accumulated and
      communicated to the issuer’s management, including its principal executive
      and principal financial officers, or persons performing similar functions,
      as appropriate to allow timely decisions regarding required disclosure.”
      Your officer’s conclusion does not state whether your disclosure controls
      and procedures are effective or ineffective at accomplishing all of these
      items.  Please modify your officer’s conclusion to state whether
      your disclosure controls and procedures are effective or ineffective at
      accomplishing all of the items included within the definition of
      disclosure controls and procedures as defined in Rule 13a15(e) of the
      Exchange Act.

      Company
Response:

      As
discussed with the staff, the “Evaluation of Disclosure Controls and Procedures”
discussion appearing in Item 9A(T) has been revised to eliminate the incomplete
definition of disclosure controls and procedures and to insert, in its place,
“as such term is defined under Rule 13a-15(e) promulgated under the
Securities Exchange Act of 1934, as amended.”

      Further,
as discussed with the staff, the discussion of disclosure controls and
procedures has been revised to state management’s conclusion that disclosure
controls and procedures were effective at December 31, 2007.  The
prior language referencing weaknesses in internal control over financial
reporting as the basis for concluding that disclosure controls and procedures
were not effective has been deleted as management has determined that the
weaknesses in question related only to internal control over financial reporting
and did not constitute weaknesses in disclosure controls and
procedures.

      U.S.
Securities and Exchange Commission

      October
2, 2008

      Page
3

      Comment:

                3.

                Given
      your conclusion that your disclosure controls and procedures were not
      effective as of December 31, 2007, please expand your disclosure to
      address any remedial measures that you initiated and/or planned to
      undertake to address the deficiency.  Please also address
      whether there is an established timeline for implementing your initiated
      and/or planned remedial measures.  In addition, please expand
      your disclosure to identify the remedial actions that you have taken and
      to provide quantitative information regarding the cost of such remedial
      actions.

      Company
Response:

      In light
of the response to Comment 2 above and the determination by management that
disclosure controls and procedures were effective, no revisions have been made
with respect to remedial measures relating to disclosure controls and
procedures.

      Management’s Report on
Internal Control over Financial Reporting, page 25

      Comment:

                4.

                Please
      include a statement that your report does not include the auditor’s
      attestation report and that your registered public accounting firm has not
      attested to management’s report on the company’s internal control over
      financial reporting.  Refer to Release No.
    33-8760.

      Company
Response:

      The
statement set forth in Item 308T(a)(4) of Regulation S-K, indicating that an
attestation report is not included, has been added at the end of Management’s
Report on Internal Controls over Financial Reporting.

      Note 1 – Nature of Company
and Summary of Significant Accounting Policies, page F-7

      Comment:

                5.

                We
      note from your disclosure your “marketable securities consist of
      asset-backed securities and municipal bonds with original maturities
      beyond 90 days.”  We further note you view these “securities as
      representing investment of funds available for current operations;” and
      have, therefore, classified your marketable securities as current
      assets.  Please tell us and expand your disclosure to explain
      the nature and term of the investments you hold in asset-based securities
      and municipal bonds.

      U.S.
Securities and Exchange Commission

      October
2, 2008

      Page
4

      Company
Response:

      The
marketable securities held at December 31, 2007 consisted of (1) $900,000 in
face amount of AAA rated auction rate notes backed by student loans with a
variable coupon rate, interest payable monthly and maturing in 2032 and (2)
$8,750,000 in face amount of AAA rated revenue bonds of the Wisconsin State
General Fund with a variable coupon rate, interest payable monthly and maturing
in 2032.  The footnote relating to Marketable Securities has been
expanded to disclose the nature and terms of the marketable
securities.  In addition, these securities were sold in February of
2008 and the company realized no gains or losses associated on the
disposal.

      Form 10-Q for the Fiscal
Quarter Ended June 30, 2008

      Note 6.  Sale of
Oil and Gas Properties, page 9

      Comment:

                6.

                We
      note you determined the carrying value of the properties sold “by
      allocating total capitalized costs within the non-U.S. full cost pool
      between properties sold and properties retained based on their relative
      fair values.”  Please confirm, if true, that you determined
      there were substantial economic differences between the properties sold
      and those retained, as contemplated by Rule 4-10(c)(6)(i) of Regulation
      S-X, or otherwise advise.

      Company
Response

      We have
reviewed our allocation of capitalized costs and determined that the description
of the methodology used in allocating capitalized cost appearing in the Form
10-Q was incorrect.  There were no substantial economic differences
between the properties sold and those retained and, accordingly, we allocated
capitalized costs based on the ratio of proved reserves sold and proved reserves
retained which is the same basis as is used to compute
amortization.   We have revised the description in the amended
Form 10-Q to accurately reflect the methodology of allocating capitalized
costs.

      Controls and Procedures,
page 17

      Comment:

                7.

                We
      note your certifying officers concluded your disclosure controls and
      procedures were effective as of June 30, 2008.  Given your
      certifying officer’s conclusion that your disclosure controls and
      procedures were ineffective as of December 31, 2007, please tell and
      expand your disclosure to explain the necessary facts and circumstances
      that led to your ability to conclude that your disclosure controls and
      procedures were effective as of June 30,
2008.

      U.S.
Securities and Exchange Commission

      October
2, 2008

      Page
5

      Company
Response:

      In light
of the response to Comment 2 above and the determination by management that
disclosure controls and procedures were effective at December 31, 2007, no
revisions have been made with respect to the conclusion that disclosure controls
and procedures were effective as of June 30, 2008.  The disclosure
has, however, been revised to make the same consistent with that included in the
Form 10-K.

      Comment:

                8.

                We
      note your disclosure that there were no changes in your internal control
      over financial reporting during the quarter ended June 30, 2008 that has
      materially affected or is reasonably likely to materially affect, your
      internal control over financial reporting.  Please tell us
      whether you performed any remediation efforts during this reporting period
      which resulted in a change in your internal controls over financial
      reporting. In addition, please provide the following disclosures, if
      applicable, for each outstanding material weakness you identified in your
      Form 10-K for the fiscal year ended December 31,
  2007:

                ·

                Reiterate
      when each material weakness was first identified and by
    whom;

                ·

                Specifically
      identify the facts and circumstances surrounding each outstanding material
      weakness;

                ·

                Provide
      a more fulsome discussion of the nature of your remediation efforts and
      the actions you’ve already
undertaken;

                ·

                Indicate
      when you believe your remediation efforts will be
    completed;

                ·

                Disclose
      the material costs associated with each remediation
    procedure.

      Company
Response:

      The
weaknesses identified in the Form 10-K related to inadequate segregation of
duties and deficiencies in the treasury control process.

      As noted
in the Form 10-K, the lack of adequate segregation of duties relates to the fact
that the company has a one person internal accounting staff.  Further,
as noted, based on the scope of operations, the company has no present plans to
add accounting staff and has taken no steps in that regard that would remedy the
lack of segregation of duties.

      The
deficiencies in the treasury control process relate to occasional failure to
review bank reconciliations prepared by an outside consultant.  The
company has implemented a procedure to review and approve bank reconciliations
on a timely basis.

      The
discussion of Changes in Internal Control over Financial Reporting has been
expanded to provide additional disclosure regarding remediation efforts and
plans.

      U.S.
Securities and Exchange Commission

      October
2, 2008

      Page
6

      Form 8-K Filed June 24,
2008

      Comment:

                9.

                Please
      confirm, if true, that you were not required to provide pro forma
      financial information for the disposition of your interest in the Caracara
      Association Contract in accordance with Items 2.01 and 9.01 of Form 8-K,
      or otherwise advise.

      Company
Response:

      The
Company qualifies as a “smaller reporting company” and, pursuant to Item
9.01(b)(1) of Form 8-K, is subject to Rule 8-05 of Regulation S-X regarding
required pro forma financial statements.  Rule 8-05 of Regulation S-X
(unlike Article 11 of Regulation S-X) calls for pro forma information to be
provided for certain acquisitions but does not provide for pro forma information
with respect to dispositions.  Accordingly, the Company has determined
that it is not required to provide pro forma information in the Form
8-K.

      Engineering
Comments

      Comment:

                10.

                Please
      submit to us the petroleum engineering reports – in hard copy and
      electronic digital format – you used as the basis for your 2007 proved
      reserve disclosures.  Please ensure these materials
      include:

                a)

                One-line
      recaps for each property sorted by field and by present worth within each
      proved reserve category including the dates of first booking and estimated
      first production for your proved undeveloped
  properties;

                b)

                Total
      company summary income forecast schedules for each proved reserve category
      with proved developed segregated into producing and non-producing
      properties;

                c)

                Individual
      income forecast schedules for each of the three largest properties (net
      equivalent reserve basis) in the proved developed and proved undeveloped
      categories as well as the AFE for each of the three PUD
      projects;

                d)

                Engineering
      exhibits (e.g. maps, rate/time plots, volumetric calculations) for each of
      these six largest properties.  Please include normal operational