Houston American Energy Corporation HUSA Stock News

Houston American Energy Corporation (NYSEAMERICAN: HUSA) is having a great start to the trading session in the pre-market hours this morning. The stock is up more than 14% after the company announced an update with regard to its financial stability. Here’s what’s going on:

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HUSA Stock Climbs On Financial Update

Houston American Energy Corp. (NYSE American: HUSA) today provided an update on the company’s recent financing activities and current financial position. In the release, the company said that it has raised about $4.49 million in net proceeds from the sale of common stock.

The sales took place under an at-the-market, or ATM, sales program. In the release, HUSA said that the shares were sold at an average price of $0.21 per share. The funds raised through the ATM are expected to retire all of the company’s short term debt.

Even better, the company said that the remaining funds after paying off all short term debt will be enough to full fund its drilling budget through 2020. Moreover, the funds will assist the company in establishing a cash reserve to support operations and future projects.

In a statement, Jim Schoonover, CEO at HUSA, had the following to offer:

With the broad strength in energy markets and energy stocks in the wake of the recent U.S./Iran conflict, we elected to access funds available under our ATM sales program. With this financing, we expect to be able to fully fund our operating and capital expenditure requirements during 2020 with additional capital available to pursue other growth opportunities that may come our way. We are excited about the additions to our prospect inventory over the past year and the direction of the company and look forward to reporting our progress to shareholders throughout 2020.

Why Investors Are So Excited

At the end of the day, the news issued by Houston American Energy this morning is huge! The company has been successful in raising meaningful funds at the market, setting it on a stronger financial foundation.

Not only will the funds that were raised be enough to pay off all of the company’s short-term debt, ensuring that there will be no defaults, the money raised is enough to fund drilling activities for quite some time, setting the stage for strong growth ahead.

With financial blues driving heavy short interest into the stock, and the positive news that was released today, we could see a short squeeze out of HUSA.

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