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Houston Energy Corp. has been charged with misleading investors by the SEC on Monday. Rhiannon Meyers from FuelFix.com reports:
The Securities and Exchange Commission on Monday charged a Houston exploration and production company with misleading investors by exaggerating the extent of its oil reserves in Colombia and downplaying the risks.
An SEC investigation found Houston American Energy Corp. and CEO John Terwilliger falsely claimed a Colombian oil concession in which the company held an interest contained 1 billion to 4 billion barrels of oil reserves. The company estimated its interest in the 345,542 acres in the Llanos basin was worth $3 billion, a value of $100 per share for Houston American Energy stockholders, the federal financial regulator alleged in a civil cease and desist order.
As it played up its Colombian reserves, Houston American raised about $13 million in a public offering, with its stock price quadrupling to more than $20 per share between November 2009 and April 2010, according to the agency.
Terwilliger has admitted that he was aware that the reserve estimates were unsubstantiated, and the stock price has plummeted accordingly. The SEC may opt to close the company down entirely.
Read the full report at FuelFix.com: Regulator alleges Houston oil company misled investors