UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                 FORM 10-QSB/A
                                Amendment No. 2

(Mark One)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
     ACT OF 1934

                For the quarterly period ended September 30, 2005

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

          For the transition period from ___________ to ______________.

                         Commission File Number 0-33027

                          HOUSTON AMERICAN ENERGY CORP
        (Exact name of small business issuer as specified in its charter)

                Delaware                                 76-0675953
     (State or other jurisdiction of                   (IRS Employer
     incorporation or organization)                  Identification No.)

              801 Travis Street, Suite 2020, Houston, Texas 77002
               (Address of principal executive offices)(Zip Code)

                                 (713) 222-6966
              (Registrant's telephone number, including area code)


   (Former name, former address and former fiscal year, if changed since last
                                    report)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]     No [ ]

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act.  Yes [ ]     No [X]

     As of November 8, 2005, we had 19,968,089 shares of $0.001 par value Common
Stock outstanding.

     Transitional Small Business Disclosure Format (check one) Yes [ ]    No [X]



                                EXPLANATORY NOTE

This quarterly report on Form 10-QSB/A ("Form 10-QSB/A"), Amendment No. 2, is
being filed to amend our quarterly report on Form 10-QSB for the quarter ended
September 30, 2005 (the "Original Form 10-QSB"), which was originally filed with
the Securities and Exchange Commission ("SEC") on November 14, 2005 and amended
on November 13, 2006.

This form 10-QSB/A amends Part I, Item 3 to delete an improper reference to a
conclusion that the company failed to properly account for certain stock option
grants.

Pursuant to rule 12b-15 under the Securities Exchange Act of 1934, the Form
10-QSB/A contains complete text of Items 1, 2 and 3 of Part I and Items 1 and 6
of Part II, as amended, as well as currently dated certifications from the
Principal Executive Officer and the Principal Financial Officer.

This Form 10-QSB/A does not reflect events occurring after the filing of the
Original Form 10-QSB and does not modify or update the disclosure therein in any
way other than as required to reflect the amendments discussed above.





                          HOUSTON AMERICAN ENERGY CORP.
                          -----------------------------

                                  FORM 10-QSB/A

                                      INDEX


                                                                        Page No.
                                                                        --------
                                                                     
PART I.     FINANCIAL INFORMATION

    Item 1. Financial Statements (Unaudited)

        Balance Sheet as of September 30, 2005 (Restated). . . . . . .         4

        Statements of Operations for the three months and nine months
        ended September 30, 2005 (Restated) and September 30, 2004 . .         5

        Statements of Cash Flows for the nine months
        ended September 30, 2005 (Restated) and September 30, 2004 . .         6

        Notes to Financial Statements. . . . . . . . . . . . . . . . .         7

    Item 2. Management's Discussion and Analysis of
            Financial Condition and Results of Operations. . . . . . .        11

    Item 3. Controls and Procedures. . . . . . . . . . . . . . . . . .        17

PART II     OTHER INFORMATION

    Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . .        19

    Item 6. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . .        20






                         PART I - FINANCIAL INFORMATION
ITEM 1.     Financial Statements

                          HOUSTON AMERICAN ENERGY CORP.
                                  BALANCE SHEET
                               September 30, 2005
                                   (Unaudited)
                                   (Restated)

                                     ASSETS
                                     ------
                                                   
CURRENT ASSETS:
  Cash                                                $    1,790,184
  Accounts receivable                                        473,649
  Prepaid expenses                                             1,396
                                                      ---------------
    Total current assets                                   2,265,229
                                                      ---------------

PROPERTY, PLANT AND EQUIPMENT
  Oil and gas properties - full cost method
    Costs subject to amortization                          3,045,335
    Costs not being amortized                                714,283
  Furniture and equipment                                     10,878
                                                      ---------------
        Total property, plant and equipment                3,770,496
  Accumulated depreciation and depletion                  (1,232,747)
                                                      ---------------
        Total property, plant and equipment, net           2,537,749
                                                      ---------------

OTHER ASSETS                                                 120,236
                                                      ---------------
        Total Assets                                  $    4,923,214
                                                      ===============

              LIABILITIES AND SHAREHOLDERS' EQUITY
              ------------------------------------
CURRENT LIABILITIES:
  Accounts payable                                    $      278,668
  Accrued expenses                                            79,953
  Derivative liability                                     2,761,791
                                                      ---------------
    Total current liabilities                              3,120,412
                                                      ---------------

LONG-TERM DEBT:
  Notes payable to principal shareholder                   1,000,000
  Subordinated convertible notes - net of discount            19,206
  Reserve for plugging costs                                  44,456
                                                      ---------------
    Total long-term liabilities                            1,063,662
                                                      ---------------

SHAREHOLDERS' EQUITY:
  Common stock, $0.001 par value; 100,000,000 shares
    authorized; 19,968,089 shares outstanding                 19,968
  Additional paid-in capital                               2,800,027
  Treasury stock, at cost; 100,000 shares                   ( 85,834)
  Accumulated deficit                                    ( 1,995,021)
                                                      ---------------
    Total shareholders' equity                               739,140
                                                      ---------------
        Total liabilities and shareholders' equity    $    4,923,214
                                                      ===============


    The accompanying notes are an integral part of these financial statements


                                        4



                               HOUSTON AMERICAN ENERGY CORP.
                                  STATEMENT OF OPERATIONS
                                        (Unaudited)


                                         Nine Months Ended            Three Months Ended
                                            September 30,               September 30,
                                     --------------------------  --------------------------
                                         2005          2004          2005          2004
                                     ------------  ------------  ------------  ------------
                                      (Restated)                  (Restated)
                                                                   
Revenue:
  Oil and gas                        $ 1,824,582   $   672,822   $   732,642   $   369,274
  Consulting fees                         25,000             -        25,000             -
                                     ------------  ------------  ------------  ------------
Total revenue                          1,849,582       672,822       757,642       369,274
                                     ------------  ------------  ------------  ------------

Expenses of operations:
  Lease operating expense and
    severance tax                        710,702       283,322       239,727       163,824
  Joint venture expenses                  43,105        25,637        15,681        19,589
  General and administrative
    expense                              542,590       202,906       200,837        75,627
  Depreciation and depletion             223,392        88,918        53,034        31,425
                                     ------------  ------------  ------------  ------------

Total operating expenses               1,519,789       600,783       509,279       290,465
                                     ------------  ------------  ------------  ------------

Income from operations                   329,793        72,039       248,363        78,809

Other (income) expenses:
  Interest income                       ( 21,084)      ( 4,995)     ( 13,314)         (692)
  Interest expense                        69,420             -        42,500        22,400
  Interest expense - derivative          304,753             -        12,317             -
  Interest expense - shareholders         54,000        54,000        18,000             -
  Financing costs                         10,431             -         6,386             -
  Net change in fair value of
   derivative liabilities                351,244             -       289,214             -
                                     ------------  ------------  ------------  ------------

Total other (income) expenses, net       768,764        49,005       355,103        21,708
                                     ------------  ------------  ------------  ------------

Net income (loss)                    $  (438,971)  $    23,034   $  (106,740)  $    57,101
                                     ============  ============  ============  ============

Basic income per share               $   (  0.02)  $      0.00   $    ( 0.01)  $      0.00
                                     ============  ============  ============  ============

Diluted income per share             $   (  0.02)  $      0.00   $   (  0.01)  $      0.00
                                     ============  ============  ============  ============

Basic weighted average shares         19,968,089    19,578,703    19,968,089    19,663,081
                                     ============  ============  ============  ============

Diluted weighted average shares       19,968,089    19,578,703    19,968,089    19,663,081
                                     ============  ============  ============  ============



                                        5



                                  HOUSTON AMERICAN ENERGY CORP.
                                     STATEMENTS OF CASH FLOWS
                                           (Unaudited)

                                                         For the Nine Months Ended September 30,
                                                       ------------------------------------------
                                                               2005                  2004
                                                       --------------------  --------------------
                                                            (Restated)
                                                                       
CASH FLOWS FROM OPERATING ACTIVITIES
  (Loss) Income from operations                        $          (438,971)  $            23,034
Adjustments to reconcile net income
  to net cash from operations
    Depreciation and depletion                                     223,392                88,918
    Non-cash expenses                                                    -                19,416
    Change in fair value of derivatives                            351,244                     -
    Amorization of debt discount                                   304,753                     -
Changes in operating assets and liabilities:
    (Increase) in accounts receivable                             (233,508)             (148,937)
    (Increase) decrease in prepaid expense                          88,551               (25,987)
    (Increase) decrease in other assets                           (117,069)               36,863
    Increase in accounts payable and accrued expenses              118,264               140,176
                                                       --------------------  --------------------

Net cash provided by operations                                    296,656               133,483

CASH FLOWS FROM INVESTING ACTIVITIES
    Acquisition of oil and gas properties and assets            (1,353,085)             (589,163)
    Funds received in excess of prospect costs                           -                21,650
                                                       --------------------  --------------------

Net cash used by investing activities                           (1,353,085)             (567,513)

CASH FLOWS FROM FINANCING ACTIVITIES

    Sale of common stock - net of costs                                  -                91,193
    Issuance of debt                                             2,125,000                     -
                                                       --------------------  --------------------

Net cash provided by financing activities                        2,125,000                91,193
                                                       --------------------  --------------------

Increase (decrease) in cash and equivalents                      1,068,571              (342,837)
Cash, beginning of period                                          721,613               663,422
                                                       --------------------  --------------------
Cash, end of period                                    $         1,790,184   $           320,585
                                                       ====================  ====================

SUPPLEMENT CASH FLOW INFORMATION:
    Interest paid                                      $            54,000   $            36,000

SUPPLEMENT NON-CASH INVESTING AND
  FINANCING ACTIVITIES
    Stock issued for oil and gas activity              $                 -   $            47,500
    Stock issued for financial public relations                          -               103,000
    Warrants issued for financing fees                             162,562                     -



                                        6

                          HOUSTON AMERICAN ENERGY CORP.
                          Notes to Financial Statements
                               September 30, 2005
                                   (Unaudited)

NOTE 1. - BASIS OF PRESENTATION

The accompanying unaudited financial statements of Houston American Energy
Corp., a Delaware corporation (the "Company") have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-QSB and
Item 310(b) of Regulation S-B. They do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States of America for a complete financial presentation. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
considered necessary for a fair presentation, have been included in the
accompanying unaudited financial statements. Operating results for the periods
presented are not necessarily indicative of the results that may be expected for
the full year.

These financial statements should be read in conjunction with the financial
statements and footnotes, which are included as part of the Company's Form
10-KSB for the year ended December 31, 2004.

NOTE 2. - CHANGES IN PRESENTATION

Certain financial presentations for the periods presented for 2004 have been
reclassified to conform to the 2005 presentation.

NOTE 3. - RESTATED FINANCIAL STATEMENTS

The accompanying financial statements as of September 30, 2005 and for the
three-month and nine-month periods ended September 30, 2005 are restated from
those originally issued to reflect certain adjustments related to derivative
financial instruments.

The restatement relates to the accounting for embedded features in certain
convertible notes and warrants issued by the Company during 2005 (See Note 4
below). The notes were originally recorded at their notional amounts; and the
fair value of the warrants was included in Shareholders' Equity. The Company
subsequently determined that the convertible notes and warrants contain
detachable and embedded derivatives that should have been accounted for as
derivative financial instruments in accordance with SFAS 133 and EITF 00-19 (See
Note 5 below).

In connection with the referenced restatement, interest income and certain
financing costs have been reclassified from operating revenue and expense,
respectively, to other (income) expense.

The following is a summary of the restatement adjustments.


                                        7



                                                        As Previously
                                                       ---------------
                                                          Reported       Adjustments    As Restated
                                                       ---------------  -------------  -------------
                      Balance Sheet
                      -------------
                                                                              
Other assets                                                  269,499       (149,263)       120,236
Total Assets                                                5,072,477       (149,263)     4,923,214

Currently liabilities
  Derivative liability                                              -      2,761,791      2,761,791
Total Current Liabilities                                     358,621      2,761,791      3,120,412

Long term debt
  Subordinated convertible notes                            2,125,000     (2,105,794)        19,206
Total long term debt                                        3,169,456     (2,105,794)     1,063,662

Shareholder Equity
  Additional paid in capital                                2,962,589       (162,562)     2,800,027
  Accumulated deficit                                      (1,352,323)      (642,698)    (1,995,021)
Total Stockholders' Equity                                  1,544,400       (805,260)       739,140
Total Liabilities and Shareholders' Equity                  5,072,477       (149,263)     4,923,214

               Statement of Operations
              Nine Months Ended 9/30/05
              -------------------------
Other (Income) Expense
  Interest expense-derivative                                       -        304,753        304,753
  Net change in fair value of derivative liabilities                -        351,244        351,244
  Financing costs                                              23,730        (13,299)        10,431
Total Other (Income) Expense                                  126,066        642,698        768,764


Net Income (Loss)                                             203,727       (642,698)      (438,971)

Basic income (loss) per share                          $         0.01   $      (0.03)  $      (0.02)
Diluted income (loss) per share                        $         0.01   $      (0.03)  $      (0.02)

              Three Months Ended 9/30/05
              --------------------------
Other (Income) Expense
  Interest expense-derivative                                       -         12,317         12,317
  Net change in fair value of derivative liabilities                -        289,214        289,214
  Financing costs                                              14,529         (8,143)         6,386
  Interest expense                                                                                -
Total Other (Income) Expense                                   61,715        293,388        355,103


Net Income (Loss)                                             186,647       (293,388)      (106,740)

Basic and diluted income (loss) per share              $         0.01   $      (0.02)  $      (0.01)



                                        8

NOTE 4. - SUBORDINATED CONVERTIBLE NOTES AND WARRANTS

On May 4, 2005, the Company entered into Purchase Agreements (the "Purchase
Agreements") with multiple investors pursuant to which the Company sold
$2,125,000 of 8% Subordinated Convertible Notes Due 2010 (the "Notes").

The Notes bear interest at 8%, provide for semi-annual interest payments and
mature May 1, 2010. The Notes are convertible, at the option of the holders,
into common stock of the Company at a price of $1.00 per share (the "Conversion
Price"), subject to standard anti-dilution provisions relating to splits,
reverse splits and other transactions, including issuances of common stock at
prices below the Conversion Price. The Notes are subject to automatic conversion
in the event the Company conducts an underwritten public offering of its common
stock from which the Company receives at least $5 million and the public
offering price is at least 150% of the then applicable Conversion Price. The
Company has the right to cause the Notes to be converted into common stock after
May 1, 2006 if the price of the Company's common stock exceeds 200% of the then
applicable Conversion Price on the date of conversion and for at least 20
trading days over the preceding 30 trading days. The Company has the right to
repurchase the Notes after May 1, 2007 at 103% of the face amount during 2007,
102% of the face amount during 2008, 101% of the face amount during 2009 and
100% of the face amount thereafter. The Notes are unsecured general obligations
of the Company and are subordinated to all other indebtedness of the Company
unless the other indebtedness is expressly made subordinate to the Notes. The
Company calculated the beneficial conversion feature for the convertible notes
and the amount was not material.

The Notes were offered and sold in private placement transaction pursuant to the
exemption from registration provided by Section 4(2) of the Securities Act of
1933 and Rule 506 promulgated thereunder. Each of the investors is either an
"accredited investor", as defined in Rule 501 promulgated under the Securities
Act, or a "qualified institutional buyer", as defined in Rule 144A.

Pursuant to the terms of the Purchase Agreements, the Company and the investors
entered into Registration Rights Agreements under which the Company agreed to
file with the Securities and Exchange Commission, within 90 days, a registration
statement covering the Notes and the common stock underlying the Notes and to
use its best efforts to cause the registration statement to become effective
within 180 days.

In connection with the placement of the Notes, the Company issued to the
placement agent in the offering a three year warrant (the "Placement Agent
Warrant") to purchase 191,250 shares of the Company's common stock at $1.00 per
share and paid commissions totaling $127,500. The Registration Rights Agreements
provide that the shares of common stock underlying the Placement Agent Warrant
are to be included in the registration statement required to be filed.

NOTE 5. - DERIVATIVE LIABILITIES

In conjunction with the issuance of the Notes, the conversion feature, the
conversion price, reset provision and the Company's optional early redemption
right in the Notes have been bundled together as a single compound embedded
derivative liability and, using a layered discounted probability-weighted cash
flow approach, was initially fair valued at $2,368,485 at May 4, 2005. The fair
value model comprises multiple probability-weighted scenarios under various
assumptions reflecting the economics of the Notes, such as the risk-free
interest rate, expected Company stock price and volatility, likelihood of
conversion and or redemption, and likelihood default status and timely
registration. At inception, the fair value of this single compound embedded
derivative was bifurcated from the host debt contract and recorded as a
derivative liability which resulted in a reduction of the initial notional
carrying amount of the Notes (as unamortized discount which will be amortized
over a five-year period under the effective interest method). At inception the
excess of the unamortized discount over the notional amount of the Note in the
amount of $285,547 was charged to expense in the Company's statement of
operations.

At September 30, 2005, the Notes comprised the following:


                                        9



                                                                  
     Notional balance of Convertible Notes at September 30, 2005     $ 2,125,000
     Adjustment - Discount for single compound derivative liability   (2,105,794)
                                                                     ------------
     Convertible Notes balance at September 30, 2005, as adjusted    $    19,206
                                                                     ============


For the period from inception (May 4, 2005) through September 30, 2005, the
amortization of unamortized discount on the Notes was $19,206, which has been
classified as interest expense in the accompanying statement of operation.

The Derivative Liability reflected on the balance sheet at September 30, 2005
consists of the Derivative Liability-Compound Embedded Derivatives within the
Notes plus the Derivative Liability-Compound Embedded Derivatives within the
Warrants issued in conjunction with the Notes.

The Derivative Liability-Compound Embedded Derivatives within Notes reflect the
following activity for the period from Inception (May 4, 2005) through September
30, 2005:



                                                               
     Balance at inception (May 4, 2005)                           $2,368,485
     Mark-to-market adjustment for the period from inception to
       September 30, 2005                                              3,022
                                                                  ----------
     Balance at September 30, 2005                                 2,371,507
                                                                  ==========


The Derivative Liability-Compound Embedded Derivatives within Warrants reflect
the following activity for the period from inception (May 4, 2005) to September
30, 2005.



                                                               
     Balance at inception (May 4, 2005)                           $ 42,063
     Mark-to-market adjustment for the period from inception to
       September 30, 2005                                          348,221
                                                                  --------
     Balance at September 30, 2005                                 390,284
                                                                  ========


NOTE 6. - WARRANTS

Activity  of  warrants  during  the  nine  months ended September 30, 2005 is as
follows:



                                                          Weighted
                                                          Average
                                              Warrants  Share Price
                                              --------  ------------
                                                  
          Outstanding at beginning of period         -             -
          Granted                              191,250  $       1.00
                                              --------  ------------
          Outstanding at end of period         191,250  $       1.00
                                              ========  ============


Warrants outstanding and exercisable as of September 30, 2005:



          Exercise   Number of  Remaining  Number of
            Price      Shares      Life     Shares
          ---------  ---------  ---------  ---------
                                  
          1.00        191,250       2.58    191,250
          =========  =========  =========  =========


NOTE 7. - FINANCING COSTS

In conjunction with the issuance of long-term debt described in Note 4 above,
the Company paid $127,500


                                       10

in commissions and issued a warrant to the placement agent to purchase 191,250
shares of the Company's common stock at an exercise price of $1.00 per share
expiring May 3, 2008. The market price on the date the warrants were granted was
$0.85. The warrants are accounted for as derivative instruments pursuant to SFAS
133 and EITF 00-19 (see Note 5 above).

The aggregate financing costs of $127,500, comprised of commissions, are being
expensed ratably over the life of the Notes as financing costs. $6,386 and
$10,431 of financing costs were expensed during the quarter and nine months
ended September 30, 2005. Unamortized financing costs of $117,059 are classified
as other assets.

NOTE 8 - CONTINGENCIES

The Company has entered into a settlement agreement with the bankruptcy estate
of Moose Oil and Gas Company pursuant to which the Company paid $25,000 to the
estate in full and final settlement of all claims asserted against the Company.
The trustee in the bankruptcy has approved the settlement. The settlement will
become final upon passage of a waiting period subject to the right of creditors
to contest the settlement during the waiting period.

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

FORWARD-LOOKING INFORMATION

This Form 10-QSB quarterly report of Houston American Energy Corp. (the
"Company") for the nine months ended September 30, 2005, contains certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, which are intended to be covered by the safe harbors created
thereby. To the extent that there are statements that are not recitations of
historical fact, such statements constitute forward-looking statements that, by
definition, involve risks and uncertainties. In any forward-looking statement,
where the Company expresses an expectation or belief as to future results or
events, such expectation or belief is expressed in good faith and believed to
have a reasonable basis, but there can be no assurance that the statement of
expectation or belief will be achieved or accomplished.

The following are factors that could cause actual results or events to differ
materially from those anticipated, and include, but are not limited to: general
economic, financial and business conditions; the Company's ability to minimize
expenses and exposures related to its oil and gas properties in which other
companies have control over the operations conducted on such properties; changes
in and compliance with governmental laws and regulations, including various
state and federal environmental regulations; and the Company's ability to obtain
additional necessary financing from outside investors and/or bank and mezzanine
lenders.

Readers are cautioned not to place undue reliance on the forward-looking
statements contained herein, which speak only as of the date hereof. The Company
believes the information contained in this Form 10-QSB to be accurate as of the
date hereof. Changes may occur after that date, and the Company will not update
that information except as required by law in the normal course of its public
disclosure practices.

The oil and gas industry is subject to volatile price movements based on various
factors including supply and demand and other factors beyond the control of the
Company.  While the industry has generally benefited from higher prices during
the past two years, sudden and/or sustained decreases in energy prices can
occur, which could limit our ability to fund planned levels of capital
expenditures.


                                       11

Additionally, the following discussion regarding the Company's financial
condition and results of operations should be read in conjunction with the
financial statements and related notes contained in Item 1 of Part 1 of this
Form 10-QSB, as well as the financial statements in Item 7 of Part II of the
Company's Form 10-KSB for the fiscal year ended December 31, 2004.

CRITICAL ACCOUNTING POLICIES

The Company's discussion and analysis of its financial condition and results of
operations are based upon the Company's financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America.  The Company believes certain critical accounting
policies affect its more significant judgments and estimates used in the
preparation of its financial statements.  A description of the Company's
critical accounting policies is set forth in the Company's Form 10-KSB for the
year ended December 31, 2004.  As of, and for the quarter ended, September 30,
2005, there have been no material changes or updates to the Company's critical
accounting policies other than (1) the application of derivative accounting
treatment prescribed by SFAS 133 and EITF 00-19 to outstanding convertible notes
and warrants, and (2) the following updated information relating to Unevaluated
Oil and Gas Properties:

-- UNEVALUATED OIL AND GAS PROPERTIES.  Unevaluated oil and gas properties not
subject to amortization include the following at September 30, 2005:



                               
               Acquisition costs  $ 86,300
                                  --------
               Evaluation costs    627,983
                 Total            $714,283
                                  ========


The carrying value of unevaluated oil and gas prospects include $442,936
expended for properties in the South American country of Colombia at September
30, 2005. We are maintaining our interest in these properties and development
has or is anticipated to commence within the next twelve months.

-- DERIVATIVES. The Company determined that the convertible notes and warrants
issued during 2005 contain detachable and embedded derivatives that should have
been accounted for as derivative instruments in accordance with SFAS 133 and
EITF 00-19. In assessing the value of the derivative instruments in accordance
with SFAS 133 and EITF 00-19, the Company utilizes a fair value model comprised
of multiple probability-weighted scenarios under various assumptions reflecting
the economics of the Convertible Notes, such as the risk-free interest rate,
expected Company stock price and volatility, likelihood of conversion and or
redemption, and likelihood default status and timely registration. Changes in
the subjective assumptions can materially affect the estimated fair value of
derivative instruments and consequently, the related amounts recognized in the
financial statements. See Note 5 of the Notes to the Financial Statements in
this Form 10-QSB for further discussion of derivative instruments.

CURRENT YEAR DEVELOPMENTS

Drilling, Leasehold and Seismic Activity

Through November 10, 2005, the Company has drilled two on-shore domestic wells
as follows:


                                       12

-    Drilling of a 10,600-foot well, the first well, on the South Sibley
     Prospect in Webster Parish, Louisiana was completed in May 2005 with
     multiple pay sands apparently identified. Sales from the well commenced
     June 28, 2005. The Company has a 7.5% working interest at an 8.3% net
     revenue interest carried to point of sales for the well.

-    Drilling of a 12,100-foot well, the Baronet #2 well, on the Crowley
     Prospect in Acadia Parish, Louisiana was completed in April 2005. The well
     tested the Hayes Sand and flanks a natural gas well that produced 1.6 BCF
     of natural gas from the Hayes Sand. After logging 21-feet of apparent net
     pay, hole conditions deteriorated before logging could be completed. The
     well was completed and production began in June 2005. The Company has a 3%
     working interest and 2.25% net revenue interest until payout for the well.

Assuming the Baronet #2 performs consistently, the Company plans to drill a
developmental well on the Crowley Prospect during the first quarter of 2006.

Through November 10, 2005, the Company had acquired interests in four additional
domestic prospects: (1) a 8.25% working interest with a 6.1875% net revenue
interest, subject to a 25% working interest back in at payout, in the 425 acre
Sugarland Prospect in Vermillion Parish, Louisiana; (2) a 4.375% working
interest, subject to payment of 5.8334% of costs to the casing point in the
first well, in the 500 acre Hog Heaven Prospect in Jim Hogg County, Texas; (3) a
15% working interest with an 11.25% net revenue interest in the 1340 acre
Obenhaus Prospect in Wilbarger County, Texas; and (4) a 15% working interest
with an 11.25% net revenue interest in the 900 acre West Fargo Prospect in
Wilbarger County, Texas.  Subject to rig availability, the Company plans to
commence drilling on each of these prospects before the end of 2005.

Through November 10, 2005, the Company has drilled nine international wells in
Colombia as follows:

-    Drilling of 8 offset wells on the Cara Cara concession in Colombia was
     completed with production commencing on the Bengala #4, #5, #6, #7ST and #8
     and the Jaguar #5, #T5 and #T6. The Company holds a 1.59% working interest
     in each of the wells subject to a 30% reversionary interest to Ecopetrol at
     payout.

-    The Tambaqui #5 well commenced drilling, and production began, in March
     2005. The Company holds a 12.6% working interest in the well.

Seismic surveying began on our Cara Cara concession in Colombia as part of our
planned delineation of additional drilling prospects on the concession.  Seismic
surveying was completed on our Dorotea and Cabiona concessions to establish
drilling prospect locations.

The Company and its partners plan to drill up to 2 additional wells on the Cara
Cara concession through the end of 2005.

The Company and its partners are permitting 30 drilling locations on the Dorotea
and Cabiona contract.  The Company and its partners plan to add a second rig to
begin drilling the first well in the Cabiona and Dorotea contracts in the first
quarter of 2006.

Through November 10, 2005, the Company and its partners had also acquired an
additional drilling concession, known as the Surimena concession, in Colombia
covering approximately 108 square miles.  The Company's net working interest in
the Surimena concession is 12.5%.  Based on 2D seismic interpretation, drilling
on the Surimena concession is expected to commence in mid-2006.


                                       13

Financing Activity

In May 2005, the Company sold $2,125,000 of 8% Subordinated Convertible Notes
Due 2010 (the "Notes").

The Notes bear interest at 8%, provide for semi-annual interest payments and
mature May 1, 2010.  The Notes are convertible, at the option of the holders,
into common stock of the Company at a price of $1.00 per share (the "Conversion
Price"), subject to standard anti-dilution provisions relating to splits,
reverse splits and other transactions, including issuances of common stock at
prices below the Conversion Price.  The Notes are subject to automatic
conversion in the event the Company conducts an underwritten public offering of
its common stock from which the Company receives at least $5 million and the
public offering price is at least 150% of the then applicable Conversion Price.
The Company has the right to cause the Notes to be converted into common stock
after May 1, 2006 if the price of the Company's common stock exceeds 200% of the
then applicable Conversion Price on the date of conversion and for at least 20
trading days over the preceding 30 trading days.  The Company has the right to
repurchase the Notes after May 1, 2007 at 103% of the face amount during 2007,
102% of the face amount during 2008, 101% of the face amount during 2009 and
100% of the face amount thereafter.  The Notes are unsecured general obligations
of the Company and are subordinated to all other indebtedness of the Company
unless the other indebtedness is expressly made subordinate to the Notes.  The
Company calculated the beneficial conversion feature for the convertible notes
and the amount was not material.

Pursuant to the terms of the Purchase Agreements, the Company and the investors
entered into Registration Rights Agreements under which the Company agreed to
file with the Securities and Exchange Commission, within 90 days, a registration
statement covering the Notes and the common stock underlying the Notes and to
use its best efforts to cause the registration statement to become effective
within 180 days.

In connection with the placement of the Notes, the Company issued to the
placement agent in the offering a three year warrant (the "Placement Agent
Warrant") to purchase 191,250 shares of the Company's common stock at $1.00 per
share and paid commissions totaling $127,500.  The Registration Rights
Agreements provide that the shares of common stock underlying the Placement
Agent Warrant are to be included in the registration statement required to be
filed.

RESTATEMENT OF FINANCIAL STATEMENTS

The financial statements as of September 30, 2005 and for the three-month and
nine-month periods ended September 30, 2005 are restated from those originally
issued to reflect certain adjustments related to derivative financial
instruments.

The restatement relates to the accounting for embedded features in the Notes and
Placement Agent Warrants issued by the Company during 2005.  The Notes were
originally recorded at their notional amounts; and the fair value of the
Placement Agent Warrants were included in Shareholders' Equity.  The Company
subsequently determined that the Notes and Placement Agent Warrants contain
detachable and embedded derivatives that should have been accounted for as
derivative financial instruments in accordance with SFAS 133 and EITF 00-19.

In connection with the referenced restatement, interest income and certain
financing costs have been reclassified from operating revenue and expense,
respectively, to other (income) expense.

RESULTS OF OPERATIONS

Oil and Gas Revenues.  Total oil and gas revenues increased 171% to $1,824,582
in the nine months ended September 30, 2005 when compared to the nine months
ended September 30, 2004. The increase in


                                       14

revenue is due to (1) increased production resulting from the development of the
Columbian fields and the new domestic wells that have come on line during the
fourth quarter of 2004 and the first nine months of 2005, and (2) increases in
oil prices.  The Company had interests in 16 producing wells in Colombia and 8
producing wells in the U.S. during the 2005 period as compared to 7 producing
wells in Columbia and 6 producing wells in the U.S. during the 2004 period.
Average prices from sales were $47.81 per barrel of oil and $6.32 per mcf of gas
during the 2005 period as compared to $32.22 per barrel of oil and $5.35 per mcf
of gas during the 2004 period.  Following is a summary comparison, by region, of
oil and gas sales for the periods.



                           Columbia      U.S.      Total
                          ----------  --------  ----------
                                       
          2005 Period
               Oil sales  $1,360,647  $ 62,978  $1,423,625
               Gas sales           -   400,957     400,957
          2004 Period
               Oil sales     423,614    16,489     440,103
               Gas sales           -   232,719     232,719


Lease Operating Expenses.  Lease operating and severance tax expenses, excluding
joint venture expenses relating to our Columbian operations discussed below,
increased 151% to $710,702 in the 2005 period from $283,322 in the 2004 period.
The increase in lease operating expenses was attributable to the increase in the
number of producing wells during the 2005 period (24 wells as compared to 11
wells).  Following is a summary comparison of lease operating expenses for the
periods.



                       Columbia     U.S.    Total
                       ---------  -------  --------
                                  
          2005 Period  $ 660,446  $50,256  $710,702
          2004 Period    255,676   27,646   283,322


Joint Venture Expenses. The Company's allocable share of joint venture expenses
attributable to the Colombian Joint Venture totaled $43,105 during the 2005
period and $25,637 during the 2004 period. The increase in joint venture
expenses was attributable to an increase in operational activities of the joint
venture in acquiring new concessions.

Depreciation and Depletion Expense. Depreciation and depletion expense was
$223,392 and $88,918 for the periods ended September 30, 2005 and 2004,
respectively. The increase is due to increases in domestic and Colombian
production.

General and Administrative Expenses. General and administrative expense
increased by 167% to $542,590 during the 2005 period from $202,906 in the 2004
period. The increase in general and administrative expense was primarily
attributable to the payment of salary (up $142,836 from $0) to the Company's
principal officer beginning in the fourth quarter of 2004 and increases in
professional fees (up $217,078, or 230%) relating primarily to legal fees
associated with the ongoing Moose Oil litigation.

Other Expense, Net. Other expense, net, consists of financing costs in the
nature of interest and deemed interest associated with outstanding shareholder
loans and convertible notes and warrants issued in May 2005, net of interest
earned by the Company. Certain features of the convertible notes and warrants
resulted in the recording of a deemed derivative liability on the balance sheet
and periodic interest associated with the deemed derivative liabilities and
changes in the fair market value of those deemed liabilities.

Other expenses, in total, increased from $49,005 in the nine-month period ended
September 30, 2004 to $768,764 in the nine-month period ended September 30,
2005. The increase in other expenses was attributable to interest incurred on
the convertible notes issued in May 2005 and deemed interest and related charges
associated with the derivative liability. During the 2004 period, other expense
was entirely


                                       15

attributable to interest accruing on a shareholder loan ($54,000) offset by
earned interest ($4,995). During the 2005 period, other expense related
primarily to deemed interest on the derivative liability ($304,753), the net
change in fair value of the derivative liability ($351,244), interest accrued on
the convertible notes ($69,420), interest accrued on the shareholder loan
($54,000) and financing costs ($10,431), offset by interest earnings ($21,084).

FINANCIAL CONDITION

Liquidity and Capital Resources. At September 30, 2005 we had a cash balance of
$1,790,184 and working capital of $1,906,608 compared to a cash balance of
$721,613 and working capital of $771,392 at December 31, 2004. The increase in
cash and working capital during the period was primarily attributable to the
sale, during 2005, of $2,125,000 of Subordinated Convertible Notes partially
offset by investing activities relating to oil and gas properties.

Derivative liabilities of $2,761,791 are recorded as current liabilities at
September 30, 2005 as compared to $0 at December 31, 2004 but are not considered
in computing working capital. The derivative liabilities represent the deemed
fair value of the embedded derivatives included in the subordinated convertible
notes and accompanying warrants that were issued during 2005 as measured at
September 30, 2005 and December 31, 2004. Included within the derivative
liabilities at September 30, 2005 was $2,105,794 attributable to the derivative
features in the subordinated convertible notes which amount is reflected as a
discount in the amount of the subordinated convertible note on the balance sheet
as compared to $0 at December 31, 2004.

Operating cash flows for the 2005 period totaled $296,656 as compared to
$133,483 during the 2004 period. The improvement in operating cash flow was
primarily attributable to improved profitability and increases in depreciation
and depletion, partially offset by changes in operating assets and liabilities.

Investing activities used $1,353,085 during the 2005 period as compared to
$567,513 used during the 2004 period.  The increase in funds used in investing
activities during the current period was primarily attributable to the payment
of the Company's portion of seismic survey costs on Colombian prospects totaling
$453,198.

Financing activities provided $2,125,000 during the 2005 period attributable to
the sale of Subordinated Convertible Notes and $91,193 during the 2004 period
attributable to the issue of common stock.

Long-Term Debt. At September 30, 2005, our long-term debt was $1,063,412 as
compared to $1,000,000 at December 31, 2004. Long-term debt at September 30,
2005 consisted of a reserve for plugging costs of $44,456, a note payable to our
principal shareholder in the amount of $1,000,000 and 8% subordinated
convertible notes in the principal amount of $2,125,000, recorded net of
discounts in the amount of $2,105,794 relating to the fair value of the embedded
derivatives included in the subordinated convertible notes. The increase in
long-term debt was attributable to the issuance during the period of the
subordinated convertible notes and recording the plugging cost reserve.

Notes payable to our principal shareholder, in the amount of $1,000,000, bear
interest at 7.2% and mature January 1, 2007.

Notes payable also included $2,125,000 in principal amount of Convertible Notes.
The Convertible Notes bear interest at 8%, provide for semi-annual interest
payments and mature May 1, 2010. The Convertible Notes are convertible, at the
option of the holders, into common stock of the Company at a price of $1.00 per
share (the "Conversion Price"), subject to standard anti-dilution provisions
relating to splits, reverse splits and other transactions, including issuances
of common stock at prices below the Conversion Price.


                                       16

The Convertible Notes are subject to automatic conversion in the event the
Company conducts an underwritten public offering of its common stock from which
the Company receives at least $5 million and the public offering price is at
least 150% of the then applicable Conversion Price. The Company has the right to
cause the Convertible Notes to be converted into common stock after May 1, 2006
if the price of the Company's common stock exceeds 200% of the then applicable
Conversion Price on the date of conversion and for at least 20 trading days over
the preceding 30 trading days.  The Company has the right to repurchase the
Convertible Notes after May 1, 2007 at 103% of the face amount during 2007, 102%
of the face amount during 2008, 101% of the face amount during 2009 and 100% of
the face amount thereafter.  The Convertible Notes are unsecured general
obligations of the Company and are subordinated to all other indebtedness of the
Company unless the other indebtedness is expressly made subordinate to the
Convertible Notes.

Capital and Exploration Expenditures and Commitments.  Our principal capital and
exploration expenditures relate to our ongoing efforts to acquire, drill and
complete prospects.  Historically, we funded our capital and exploration
expenditures from funds borrowed from John F. Terwilliger, our principal
shareholder and officer.  With the receipt of additional equity financing in
2003, 2004 and the May 2005 sale of convertible notes, and the increase in our
revenues, profitability and operating cash flows, we expect that future capital
and exploration expenditures will be funded principally through funds on hand
and funds generated from operations.

During the first nine months of 2005, we invested approximately $1,353,085 for
the acquisition and development of oil and gas properties, consisting of (1)
seismic surveying in Colombia ($453,198), (2) drilling the well on the Crowley
Prospect, and (3) drilling 9 wells in Colombia.

At September 30, 2005, our only material contractual obligations requiring
determinable future payments on our part were notes payable to our principal
shareholder and holders of subordinated convertible notes and our lease relating
to our executive offices.

In addition to the contractual obligations requiring that we make fixed
payments, in conjunction with our efforts to secure oil and gas prospects,
financing and services, we have, from time to time, granted overriding royalty
interests (ORRI) in various properties, and may grant ORRIs in the future,
pursuant to which we will be obligated to pay a portion of our interest in
revenues from various prospects to third parties.

At September 30, 2005, our acquisition and drilling budget for the balance of
2005 totaled approximately $392,000, consisting of (1) $50,000 for drilling of 2
wells in South America on the Cara Cara concession, and (2) $342,000 to drill 4
domestic wells on the Sugarland Prospect, the Hog Heaven Prospect, the Obenhaus
Prospect and the West Fargo Prospect.  Our acquisition and drilling budget has
historically been subject to substantial fluctuation over the course of a year
based upon successes and failures in drilling and completion of prospects and
the identification of additional prospects during the course of a year.

Management anticipates that our current financial resources combined with our
increases in revenues over the past year will meet our anticipated objectives
and business operations, including our planned property acquisitions and
drilling activities, for at least the next 12 months without the need for
additional capital.  Management continues to evaluate producing property
acquisitions as well as a number of drilling prospects.  It is possible,
although not anticipated, that the Company may require and seek additional
financing if additional drilling prospects are pursued beyond those presently
under consideration.

OFF-BALANCE SHEET ARRANGEMENTS

We had no off-balance sheet arrangements or guarantees of third party
obligations at September 30, 2005.


                                       17

INFLATION

We believe that inflation has not had a significant impact on our operations
since inception.

ITEM 3.     CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures (as defined in Exchange
Act Rule 13a-15(e) and 15d-15(e)) that are designed to ensure that information
required to be disclosed in the Company's Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to the Company's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding the required disclosure.

In designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily is required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.

At the time the original Quarterly Report on Form 10-Q was prepared and filed on
November 14, 2005, an evaluation as of the end of the period covered by this
report had been carried out under the supervision and with the participation of
our management, including our chief executive officer and chief financial
officer, of the effectiveness of our disclosure controls and procedures, as such
term is defined under Rule 13a-15(e) and Rule 15d -15(e) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). This
evaluation was performed in light of weaknesses identified, and described in the
original Quarterly Report, relating to accounting for non-routine transactions.
Based on their evaluation, our chief executive officer, who also served at that
time as chief financial officer, had originally concluded that our disclosure
controls and procedures were effective to ensure that we record, process,
summarize, and report information required to be disclosed by us in our reports
filed under the Securities Exchange Act within the time periods specified by the
Securities and Exchange Commission's rules and forms even though weaknesses in
controls were identified.

In connection with the audit of our financial statements for the fiscal year
ended December 31, 2005, our independent registered public accounting firm
informed us that we had significant deficiencies constituting material
weaknesses as defined by the standards of the Public Company Accounting
Oversight Board, some of which had previously been identified in connection with
the audit of our financial statements for the fiscal year ended December 31,
2004 and continued to exist at December 31, 2005.

The weaknesses in question were detected during the audit of our financial
statements for the fiscal year ended December 31, 2004, which audit occurred in
February/March 2005, and during the audit of our financial statements for the
fiscal year ended December 31, 2005, which audit occurred in March 2006.

The weaknesses were detected in the routine course of the audit review of
accounting for certain non-routine transactions.

The specific problems identified by the auditor were (1) lack of segregation of
duties necessary to maintain proper checks and balances between functions, (2)
failure of internal personnel to adequately communicate the scope and nature of
non-routine transactions, and (3) application of improper accounting principles
to financial derivatives.  The absence of qualified full time accounting
personnel was a contributing factor to the problems identified by the auditor.
The specific circumstances giving rise to the weaknesses include


                                       18

our President serving as both Chief Executive Officer and as Chief Financial
Officer and our utilizing the services of contract accountants on a part time
basis in the absence of internal accounting personnel.  As a result of the
absence of full time in-house accounting personnel and the failure of in-house
personnel to adequately communicate information to the outside contract
accountants, certain journal entries required during 2004 and 2005 were not made
until the time of the audit when the need for such entries was identified by the
auditor.

As a result of our review of the items identified by our auditors, we have
concluded that our previous derivative accounting policies were incorrect.

In light of the above items, we have restated our financial statements for the
quarterly and year-to-date periods ended June 30, 2005 and September 30, 2005 to
correct our accounting for derivatives.

Further, based on the material weaknesses described herein, we have re-evaluated
our disclosure controls at September 30, 2005 and concluded that our disclosure
controls and procedures were not effective at the reasonable assurance level at
September 30, 2005.  More specifically, our failure to maintain effective
controls over the selection, application and monitoring of our accounting
policies to assure that certain transactions were accounted for in conformity
with generally accepted accounting principles resulted in a failure to record an
appropriate derivative liability, deemed interest expense associated with the
derivative liability and related charges associated with changes in the value of
embedded derivatives, all arising from the issuance of convertible notes and
warrants that included embedded derivatives.

Because we lack the financial resources to support in-house accounting personnel
at this time, no formal steps had been taken as of the time of filing of the
original quarterly report for the period ended September 30, 2005 to resolve the
weaknesses identified by the auditor.  We, however, began emphasizing
improvement in communications with outside accounting personnel to assure that
non-routine transactions are accounted for in a timely manner.  Further, with
respect to the specific accounting principles that were subject of the
weaknesses identified - derivatives accounting and compensation accounting - we
placed an emphasis on reviewing the application of such principles in connection
with all future accounting periods.

During the quarter ended September 30, 2005, there were no changes in our
internal controls over financial reporting that materially affected, or are
reasonably likely to materially affect, internal controls over financial
reporting.  We subsequently hired a full-time in-house chief financial officer
and expect that such hiring will alleviate some or all of the weaknesses in
disclosure control previously identified.

                                    PART II

ITEM 1.     LEGAL PROCEEDINGS

The Company has entered into a settlement agreement with the bankruptcy estate
of Moose Oil and Gas Company pursuant to which the Company paid $25,000 to the
estate in full and final settlement of all claims asserted against the Company.
The trustee in the bankruptcy has approved the settlement.  The settlement will
become final upon passage of a waiting period subject to the right of creditors
to contest the settlement during the waiting period.


                                       19



ITEM 6.     EXHIBITS

          Exhibit
          Number                         Description
          -------                        -----------
                
            31.1   Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

            31.2   Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

            32.1   Certification of CEO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
                   of the Sarbanes-Oxley Act of 2002

            32.2   Certification of CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
                   of the Sarbanes-Oxley Act of 2002



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the undersigned
thereunto duly authorized.

                                        HOUSTON AMERICAN ENERGY CORP.


                                        By: /s/ John Terwilliger
                                            John Terwilliger
                                            CEO and President


                                        By: /s/ James Jacobs
                                            James Jacobs
                                            Chief Financial Officer

Date: November 17, 2006