Executive Summary

Q4 2017 preliminary revenue was $0.415M, up 842% year-over-year and up 271% sequential, driven by first commercial sales from Reeves County wells and stronger commodity prices .
Production ramped with preliminary volumes of 6,150 Bbl oil and 19,518 Mcf gas (9,403 boe), while realized prices improved to $54.05/Bbl and $4.22/Mcf versus Q3 2017 and Q4 2016 .
Management indicated IP30s above their economic model and expects operational efficiencies as further wells are brought online; extreme cold caused minor December downtime but did not change positive trajectory .
No formal financial guidance or earnings call transcript was filed; operational plans evolved from two Reeves wells targeted in Q4 2017 to two wells expected in Q1 2018, reflecting scheduling/financing realities .

What Went Well and What Went Wrong

What Went Well
- “Both the cumulative production to date and current production rates are, on average, above our economic model forecast” (John Boylan, CEO), underscoring strong IP30s: O’Brien #3H 1,108 boepd (37% oil) and Johnson #1H 1,014 boepd (51% oil) .
- Q4 revenue inflected sharply with Reeves County commercialization: $414,743 preliminary (+842% y/y; +271% q/q) on better production and realized prices .
- Price tailwinds: realized oil/gas prices improved to $54.05/Bbl and $4.22/Mcf in Q4 2017 versus Q3 2017 ($43.45/Bbl; $3.29/Mcf) and Q4 2016 ($44.94/Bbl; $2.93/Mcf) .
What Went Wrong
- Weather-related downtime: O’Brien #3H shut-in 5 days; Johnson #1H shut-in 2 days due to extreme cold in December, modestly impacting total production .
- Operational plans slipped: two Reeves wells expected to “commence drilling operations during the 4th Quarter of 2017” at ~$3.5M HUSA share did not occur as planned; by Q3 filing, company expected two wells in Q1 2018 instead .
- Balance sheet constraints persist; management disclosed need for additional capital to fund 2018 drilling, despite initial Reeves cash flow ramp; working capital adequacy noted for operations but not drilling .

Revenue vs prior periods (USD)

Metric	Q2 2017	Q3 2017	Q4 2017
Oil & Gas Revenue ($)	$46,275	$111,741	$414,743 (prelim.)
Sequential Growth (%)	—	+141% vs Q2	+271% vs Q3
YoY Growth (%)	—	+181% vs Q3 2016	+842% vs Q4 2016

Realized prices and production volumes

Metric	Q4 2016	Q3 2017	Q4 2017
Realized Oil Price ($/Bbl)	$44.94	$43.45	$54.05
Realized Gas Price ($/Mcf)	$2.93	$3.29	$4.22
Oil (Bbl)	—	—	6,150
Gas (Mcf)	—	—	19,518
Production (boe)	1,395	2,885	9,403

EPS and margins (disclosure status)

Metric	Q2 2017	Q3 2017	Q4 2017
Diluted EPS ($)	Not disclosed at quarterly level	Not disclosed at quarterly level	Not disclosed in preliminary release
Net Income Margin %	Not disclosed at quarterly level	Not disclosed at quarterly level	Not disclosed in preliminary release

Segment and KPI highlights (Permian/Reeves County)

KPI	Q3 2017	Q4 2017
O’Brien #3H IP30 (gross, 4,500’± lateral)	Announced initial production 359 bopd and 4,077 mcf/d (1,039 boepd) pre-sales line; flowback in progress	IP30 1,108 boepd (37% oil); 246 boepd per 1,000’ lateral
Johnson #1H IP30 (gross, 4,500’± lateral)	Flowback indicated 351 bopd and 4,269 mcf/d (1,062 boepd) pre-sales line	IP30 1,014 boepd (51% oil); 225 boepd per 1,000’ lateral
Weather downtime (days)	—	5 (O’Brien #3H); 2 (Johnson #1H)
Commercial sales start	Gas tie-in end Oct; Johnson sales mid-Nov	Both wells commenced commercial sales in Nov

Metric/Topic	Period	Previous Guidance	Current Guidance	Change
Reeves County drilling cadence	4Q 2017	Two additional wells planned by year-end; HUSA share cost ~$3.5M	Expect two additional wells in Q1 2018	Deferred (schedule shift)
Hedging evaluation	2H 2017 onward	Considering hedging post production commencement	No update in Q4 release	Maintained “evaluating” stance
Financial guidance (revenue/EPS/margins)	Q4 2017	None provided	None provided	Maintained (no formal financial guidance)

No Q4 2017 earnings call transcript was found in filings [ListDocuments: earnings-call-transcript returned none].

Topic	Previous Mentions (Q2 2017)	Previous Mentions (Q3 2017)	Current Period (Q4 2017)	Trend
Permian/Reeves execution	Drilling Johnson; O’Brien drilling; plan completion and initial sales; evaluating hedges	Johnson completion; O’Brien completion; commercialization with gas line tie-ins; revenue ramp expected in Q4	Both wells started commercial sales; IP30s above model; production/revenue/CF inflection	Positive momentum
Commodity prices	Price recovery vs 2016 boosting realized prices	Continued improvement in realized prices	Q4 realized prices materially higher across oil/gas	Supportive tailwind
Capital needs	Additional capital required for drilling plans	Additional capital required for 2018 program	2018 drilling requires capital; ops supported by cash and Reeves revenue	Ongoing constraint
Operations timing	Target Q4 2017 wells	Expect Q4 production; next wells Q1 2018	Commercialization achieved; new wells into 2018	Slight deferral but progressing

“After approximately 90 days of operations, both the cumulative production to date and current production rates are, on average, above our economic model forecast. Commencing in Q4 2017, we saw material improvements in production, revenues and cash flow driven by our Reeves County operations.” — John Boylan, CEO .
“We expect to benefit from those investments and lessons and to gain efficiencies as we seek to drill and bring additional wells on line on our existing acreage and as we seek to add to our acreage in Reeves County.” — John Boylan, CEO .
Earlier operational updates framed the ramp: “We anticipate both of the new wells will be put on production during the month of September 2017.” (Aug 25 ops update) and “We expect to see meaningful improvements… by the end of Q3 and into Q4 2017.” (Aug 1) .

No Q4 2017 earnings call transcript was filed; therefore no Q&A highlights are available [ListDocuments: none].

Attempted to retrieve S&P Global consensus estimates for Q4 2017 revenue/EPS; tool returned daily limit exceeded and no estimates could be presented. Given HUSA’s micro-cap profile, Street coverage appears limited; treat comparisons to consensus as unavailable for this quarter [GetEstimates error].
Action: Focus comparisons on sequential and year-over-year actuals disclosed in filings and 8-Ks .

The transition to Permian (Reeves) is working: IP30s above model and commercialization in November drove a sharp Q4 revenue inflection; this is the primary near-term narrative lever .
Commodity price uplift amplified the impact of production ramp; realized oil/gas prices rose meaningfully vs Q3 and Q4 2016, supporting cash flow trajectory .
Scheduling/financing realities pushed new wells from Q4 to Q1 2018; monitor capital raises and operator schedules as key execution risks .
Weather-related downtime had limited impact; infrastructure build-out (sales lines) mitigates future timing risk; expect more normalized production profiles post tie-ins .
With no formal guidance or consensus estimates, trading likely keys off operational updates (spud/tie-in dates, IPs/declines) and financing progress rather than headline “beats/misses” .
Balance sheet remains the gating factor for program scale; continued ATM/warrants or alternative financing will influence cadence and equity dilution .
Watch for hedging decisions post ramp; while under evaluation, hedges could stabilize CF and reduce volatility as program scales .