Exhibit 10.1

                             RIO EXPLORATION COMPANY


January 15, 2003

Mr. John F Terwilliger, Chairman
Houston American Energy Corporation
801 Travis, Suite 2020
Houston, TX  77002

                                     Re:   Tambaqui Association Contract
                                           Rio Exploration Company/Hupecol, LLC
                                           State of Casanare, Colombia
                                           Effective Date: December 31, 1997

Dear Mr. Terwilliger,

This  letter,  when  fully  executed,  shall constitute an agreement and binding
contract  effective  January  1,  2003  (the agreement), between Rio Exploration
Company,  a  Texas  Corporation,  8700  Crownhill Blvd., Suite 501, San Antonio,
Texas 78209, represented and acting by and through and under its President, John
T. Saunders, Jr. (hereinafter referred to as "Rio"), and Houston American Energy
Corporation,. a Texas Corporation, 801 Travis, Suite 2020, Houston, Texas 77002,
acting  under  its  Chairman,  John  F.  Terwilliger (hereinafter referred to as
"HAEC").  Rio and HAEC are herein collectively referred to as the "parties," and
each  of the terms Rio and HAEC shall also be deemed to include their respective
parents  or  affiliates,  if  any.

Upon  execution of this agreement, Rio being the equitable and forthcoming legal
owner of a 16.38102% of one hundred percent (100%) interest in Hupecol, LLC, who
is  the legal owner of the Cara Cara Association Contract conveyed to Hupecol by
ECOPETROL,  the  state-owned  oil  company  of  the  Country  of Colombia, dated
December  31,  1997,  in  the State of Casanare, Colombia, has agreed to convey,
transfer,  and  assign  and  by  these  presents  has conveyed, transferred, and
assigned  to  HAEC  a  twelve and one-half percent (12 %) of one hundred percent
(100%) interest in Hupecol, LLC, and the Tambaqui Association Contract, composed
of  36,000  hectares  more or less, and to be known as the Tainbaqui Association
Contract,  issued  by  ECOPETROL  and  the  State  of  Casanare.

It  is  also understood by the parties hereto that Hupecol, LLC, a Texas limited
liability company, is in the process of forming a new limited liability company,
which  will be the sole owner of the Tambaqui Association Contract, of which Rio
will  be assigned, and be the owner of a 16.38102% of one hundred percent (100%)
share of the new "Tambaqui Limited Liability Company." Upon assignment to Rio of
the  "Tambaqui Limited Liability Company," Rio agrees to assign to HAEC a twelve
and  one-half  percent  (12  %)  of  one  hundred percent (100%) interest in the
Tambaqui LLC, within five working days of the date assigned to Rio.


       8700 Crownhill Boulevard, Suite 501, San Antonio, Texas 78209-1130


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For  and  in consideration of three hundred and twelve thousand five hundred and
no/100  U.S.  dollars  ($312,500.00),  the  receipt  and sufficiency of which is
hereby  acknowledged  and the commitment and obligation of HAEC to assume twelve
and  one-half percent (12 %) of the drilling and completion cost of the Tambaqui
#2  well,  to  be  commenced  on or about March 15, 2003, as outlined in the AFE
attached  as  Exhibit  "A"  hereto,  the  estimated  cost of the HAEC twelve and
one-half percent (12 %) interest to be one hundred and sixty eight thousand five
hundred and seventy nine and 38/100 U.S. dollars ($168,579.38), Rio hereby makes
this  assignment.

Upon  execution of this agreement by the parties hereof on or before February 1,
2003,  HAEC  agrees to forward a check, made payable to Rio Exploration Company,
in  the amount of three hundred and twelve thousand five hundred and no/100 U.S.
dollars  ($312,500.00),  as  consideration  for  purchasing the Rio interest. In
addition,  HAEC agrees to forward to Hupecol the amount of one hundred and sixty
eight  thousand  five  hundred  and  seventy  nine  and  38/100  U.S.  dollars
($168,579.38)  upon  cash  call  from  Hupecol.

Rio  agrees  to  furnish  HAEC with copies of all data pertinent to the Tambaqui
Block,  including, but not limited to, contracts, geophysical data, log data, or
data  requested  by HAEC that is currently available to Rio and Hupecol, LLC, or
generated  for  the  benefit of the parties and shall be owned by the parties in
proportion  to  their  interest  in  the  contract  and  any such party shall be
entitled  to copy such data. The party or parties requesting such data shall pay
all  cost  of  reproduction  of  such  data.

This  agreement  shall  be  supplemented by a (mutually agreeable by all parties
subject  to the contract) Joint Development and Operating Agreement that will be
attached  to  the  new  "Tambaqui  Limited  Liability Company" incorporating the
principal terms, conditions, and provisions set forth in this agreement and such
other  provisions  as  are  essential  to  the  management  and operation of the
proposed  LLC  and  Association  Contract.

This  agreement shall be construed and interpreted by the parties to be pursuant
to  the  laws  of the State of Texas, irrespective that all operations are being
conducted  in  the  Republic  of  Colombia.  Jurisdiction  and  venue  shall  be
applicable to the "Tambaqui Association Contract" as if the same were within the
boundaries  of  the  State of Texas and governed by the laws and statutes of the
State  of  Texas.

Rio  makes no warranties, express or implied, as to the reserves in place or the
viability  of  the  existing wellbores, or the success of the well to be drilled
under  said  agreement  The  interest  is  sold  "as  is"  subject to all terms,
conditions,  and  provisions  pertaining  thereto.

Effective  January  1, 2003, HAEC agrees to bear twelve and one-half percent (12
%)  of  the  monthly  overhead  being  paid  by  Hupecol  and  its  owners  on a
month-to-month  basis  to  cover  operations  and  overhead attributable to this
agreement.  Presently, the monthly overhead to Hupecol is thirteen thousand five
hundred  and  no/100 U.S. dollars ($13,500.00) per month, resulting in a monthly
contractual  overhead  to  HEAC  effective January 1,, 2003, of one thousand six


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<PAGE>
hundred  eighty  seven  and  50/100 U.S. dollars ($1,687.50) per month, plus any
additional  overhead  expenses  incurred, which shall remain in force and effect
until  the monthly overhead rates are adjusted by agreement between the parties.

Nothing  contained  in  this  agreement  shall be deemed in any way or manner to
prohibit  or  restrict  in  any  way the right or freedom of any party hereto to
engage  in  oil and gas activities outside the Tambaqui Block in Colombia, South
America.  However, if either party hereto enters into a geological project, such
as  geological  mapping  or other oil and gas activity and decides to go forward
with  an  oil  and  gas  project  and  enters into an association contract, both
parties to this agreement agree to offer each other the right to participate for
a  twelve  and  one-half  percent  (12  %) working interest on or at cost basis,
whether  it  be  with  the companies that are subject to this agreement or their
principles  or  assigns  for  a  period  of  five  years  from  the date of this
agreement.

If  the  foregoing  terms  and  conditions  are  acceptable, please execute your
acceptance  hereof  by  executing  duplicate  originals of this agreement in the
space  provided  below  and  return  one  original  to  Rio.

AGREED TO and ACCEPTED this 15th day of January, 2003.
                            ----

RIO EXPLORATION COMPANY                   HOUSTON AMERICAN ENERGY CORPORATION


By   John T. Saunders, Jr.                By: ' John F. Terwilliger
     President                            Chairman


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<PAGE>
                                     HUPECOL
                                P. 0. DRAWER 669
                                 BEEVITLE, TEXAS

AUTHORITY FOR EXPENDITURE # 2002-02
DATE:   10/31/02


     WELL:            TAMBAQUI #2
     COUNTRY:         COLUMBIA
     PROSPECT:        TAMBAQUI PROSPECT (offset to Tambaqui #1)
     PROPOSED DEPTH;  5500'
     LOCATION:        x=1,288,940  y=1,031,900 (900 Meters NE of Tambaqui #1)

<TABLE>
<CAPTION>
                                                               Total
                                Acct.  Drilling  Completion  Estimated
Intangible Costs (G/L # 6010)   Codes   Costs      Costs       Costs
------------------------------  -----  --------  ----------  ---------
<S>                             <C>    <C>       <C>         <C>

LOCATION COSTS:
Survey                            105     4,000                  4,000
Location & Road (w/damages)       121    52,000      50,000    102,000
Location Cleanup/Environmental    189    17,000                 17,000

DRILLING COSTS:
Drilling Overhead                 101
Permit Fees/Community
Aid/Security                      109    10,000                 10,000
Rig Mobilization                  119   100,000                100,000
Drilling               ft to      129
  12 days at $9,960.00 / Day      129   119,520     115,488    235,008
Fuel                              248     3,900       3,900      7,800
Water                             141     2,400       2,400      4,800
Drilling & Completion
Fluids/chemicals                  133    45,028       5,750     50,778
Drill Bits                        137    37,388                 37,338
Cementing Services                169    25,312      23,357     48,668
Casing Crews/Labor/Inspections    213    11,590      10,728     22,318
Surface Equip. Rental             210    50,993      23,013     74,006
Drillstring & Downhole Rental     211     3,406       1,975      5,381
Directional Drilling Services     139
Hauling & Freight/Air             206     3,600       2,400      6,000
Roustabout & Misc. Services       218     4,250       3,000      7,250
Mud & Cuttings Disposal           193
Communication Expenses            230     3,600                  3,600
Gate Guard                        215
Tubular / BOP Testing             541
Plugging Costs (if necessary)     175

EVALUATION COSTS:
Electric Logging                  149    83,550                 83,550
Mud Log Services                  145    13,920       4,140     18,060
Core & Paleo Analysis             157
Drill Stem Testing                161

COMPLETION COSTS:
Completion Unit                   181
Cased Hole Wireline Services      173                16,409     16,409
Well Testing / DST                266     7,717      51,775     59,492
Well Stimulation Treatments       177

MISC. COSTS:
Supervision                       551    25,500      18,000     43,500
Drilling Liability Ins.           573
VAT (Taxes)                       576                80,678     80,678
Contingencies                     280    62,338      27,958     90,296
</TABLE>


<PAGE>
                                     HUPECOL
                                 P.0. DRAWER 669
                                 BEEVILLE, TEXAS

AFE  #     2002-02
Well:      TAMBAQUI#2

<TABLE>
<CAPTION>
                                                                                      Total
                                                     Acct.  Drilling   Completion   Estimated
TANGIBLE COSTS (G/L #1150)                           Costs    Costs       Costs       Costs
--------------------------                           -----  ---------  -----------  ----------
<S>                                                  <C>    <C>        <C>          <C>

WELLHEAD EQUIPMENT:
Brandenhead                                            435
Casing Spool                                           435      2,494                    2,494
Tubing Spool                                           430                   6,688       6,688
Christmas Tree                                         430                  11,818      11,818

COMPLETION EQUIPMENT:
Packers                                                425      1,751        1,751       3,502
Gravel Pack & Equipment                                178                  50,000      50,000
Downhole Pump                                          482

TUBULARS:
Conductor                                              402      2,000                    2,000
Surface       500' of 9-5/8", N80 Buttr                404     10,000                   10,000
Intermediate                                           406
Liner                                                  408
Production    5500' of 7", 26# N80 Buttr               410                  82,500      82,500
Tubing        5400' of 3-1/2", 9.3# N80 EUE 8rd        415                  45,900      45,900
Sucker Rods                                            481

SURFACE EQUIPMENT:
Line Heaters                                           455
Heater Treater                                         455
Tanks                                                  440
Dehydration                                            470
Separation                                             450
Gas Mess                                               475
Flowlines                                              420
Pump Equipment (Cavity Pump)                           480                   5,800       5,800
Engines                                                483
Elec. Equipment & Power lines                          462
Misc. Valves, Fittings, Etc.                           465
Installation Costs                                     495

----------------------------------------------------------------------------------------------

          Total Tangible Costs                              $  16,245  $   204,457  $  220,702

----------------------------------------------------------------------------------------------

          GRAND TOTAL                                       $ 703,207  $   645,428  $1,348,635

----------------------------------------------------------------------------------------------
</TABLE>

This  AFE  is an Estimate of Costs only. Approval of same is a commitment to pay
your  proportionate share of the actual costs in drilling to the objective depth
specified  or  complete  the  work  herein  specified.


<PAGE>