Houston American Energy has rehired John Terwilliger as its new CEO. In April 2015, Mr Terwilliger was banned from serving as an officer or director of a public company for five years as part of a settlement with the Securities and Exchange Commission (SEC).
Houston American has a market capitalization of $10 million. It has working interests in four wells in Texas and Louisiana as well as some undeveloped acreage in Columbia. It went public in 2006. Mr Terwilliger is the largest single shareholder, owning 13.6% of the common stock
In August 2014, the SEC announced charges against the company and Mr Terwilliger. The charges alleged that, back in 2009, Mr Terwilliger claimed that a concession in Columbia was worth more than $100 per share. The SEC alleged that the valuation was wildly inflated and not based on any technical evaluation. During this time, the stock price rose from $4 to $20 and the company raised $13 million in a stock offering. The operator eventually drilled three dry wells and the concession produced no oil.
Shortly before a trial was due to start in January 2015, the parties settled. Without admitting or denying liability, the company paid a penalty of $400,000 and Mr Terwilliger agreed to resign as CEO and pay a penalty of $150,000.
Mr Terwilliger founded Houston American in 2001. At the time, he was also the founder and CEO of Moose Oil and Gas. Moose entered Chapter 7 bankruptcy in 2002. The bankruptcy trustee later alleged that Mr Terwilliger diverted funds from Moose to pay for the start-up legal and professional fees of Houston American. This case was also settled without admitting or denying liability.