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Tuesday, November 29, 2022

Riding the Hydrocarb Energy Corp (OTCBB:HECC) Express

Hydrocarb Energy Corp (OTCBB:HECC) has transformed in recent weeks from a sleepy slow mover that was not really going anywhere fast into one of the top most traded stocks on the entire exchange making a rapid move up.

The ticker has been around for years undergoing 2 reverse stock splits and as many name changes including Strategic American Oil Corp until April 2012 and Duma Energy Corp until February 2014 before changing it to Hydrocarb Energy Corp.

Hydrocarb Energy Corp (OTCBB:HECC) is a publicly-traded Domestic and International Energy Exploration and Production Company targeting major under-explored oil and gas projects in emerging, highly prospective regions of the world. With exploration concessions in Africa and domestic production in Galveston Bay; the Company maintains offices in Houston, Texas, and Windhoek, Namibia.

Galveston Bay, Gulf Coast, Texas: Hydrocarb has 18,850 acres Held by Production (HBP) and several exploration projects in development in the Bay, 90 wellbores currently under technical evaluation for potential workovers, and 15 Frio horizons to be re-evaluated.

The Owambo Basin Petroleum License covers a large, 21,200 sq. km (5.3 million acre) concession comprising blocks 1714B, 1715, 1814B, 1815. The southern half of the Owambo Basin is in Namibia, with its northern portion in Angola, the second largest oil producer in Africa

In September HECC said based on a new reserve report, as of July 31, 2015, the Company’s fiscal year end, that it realized a 97% year over year increase in proved oil reserves and a 51% increase in proved natural gas reserves.

This increase was accomplished through workover and recompletions in existing wells. Additionally, the report estimated approximately $54.6 million of net present value discounted at 10% (PV10). This is a $3.1 million increase over the July 2014 PV10 of $51.5 million despite lower oil and gas pricing.

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Additionally, in 2015, HECC’s reserve replacement ratio, a key measure of growth for investors, was over 1800% (18.9:1) for oil and over 4100% (41.1:1) for gas. Reserves were evaluated by petroleum engineers R.E. Davis and Associates using SEC guidelines.

In November HECC announced it has succeeded in redeeming all its convertible notes that have floorless conversion rights. All the notes were paid in full prior to any conversion of the debt into equity.

Hydrocarb Energy was able to complete several financings under more favorable terms which allowed the company to redeem all floorless convertible debt before any dilutive conversions into common stock could take place.

The new financings that have facilitated the payoff of these floorless notes include approximately $1.74 million raised using the company’s most recent private placement. In addition to these funds raised beginning around August 1, 2015, the company has implemented a new series of short term “Cash Redeemable Notes” that are not designed nor intended to be convertible into the company’s common stock.

On December 3 HECC announced Mr. Robert M. Harrell has joined the company’s Board of Directors as the second independent director effective November 23, 2015. The company previously disclosed the appointment of Mr. Harrell in its Current Report on Form 8-K filed with the Securities and Exchange Commission on November 23, 2015. Now with two out of three directors being deemed independent, the company has a majority independent board.

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Currently trading at a $34 million market valuation HECC might boast $27 million in assets on the books but none of that is liquid. In cash the Company has just $90k and a rising mountain of current debt including $3.6 million in accounts payable. HECC is an exciting story developing in small caps; the Company is making some big moves in Africa and Texas and the stock has emerged as a volume leader in recent weeks. We will be updating HECC as events unfold so make sure you are subscribed to Microcapdaily so you know what is going on with HECC.

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Disclosure: we hold no position in HECC either long or short and we have not been compensated for this article.

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