Document:

HOUSTON AMERICAN ENERGY CORP.

                             2005 STOCK OPTION PLAN

     1.  Purpose.  The  purpose  of this HOUSTON AMERICAN ENERGY CORP 2005 STOCK
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OPTION PLAN ("Plan") is to encourage ownership of common stock, $0.001 par value
("Common  Stock"),  of HOUSTON AMERICAN ENERGY CORP, a Delaware corporation (the
"Company"),  by eligible key employees, consultants and directors of the Company
and  its  Affiliates  (as  defined below) and to provide increased incentive for
such  employees,  consultants  and  directors  to  render  services and to exert
maximum  effort  for  the  business  success  of  the Company.  In addition, the
Company  expects  that  this  Plan will further strengthen the identification of
employees,  consultants and directors with the shareholders.  Certain options to
be  granted  under  this Plan are intended to qualify as Incentive Stock Options
("ISOs")  pursuant  to  Section  422  of  the  Internal Revenue Code of 1986, as
amended  ("Code"),  while  other  options  granted  under  this  Plan  will  be
nonqualified  options  which  are not intended to qualify as ISOs ("Nonqualified
Options"),  either  or both as provided in the agreements evidencing the options
as  provided  in  Section 6 hereof.  As used in this Plan, the term "Affiliates"
means  any  "parent corporation" of the Company and any "subsidiary corporation"
of  the  Company within the meaning of Sections 424(e) and (f), respectively, of
the  Code.

     2.  Administration.
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          2.1  Administration  by the Board or the Compensation Committee.  This
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Plan  shall  be  administered by the Board of Directors (the "Board") unless the
Board  establishes  a committee comprised of one or more of its members to carry
out  such administration, in which case administration of the Plan shall be by a
Compensation Committee (the "Committee") designated by the Board of the Company,
which  shall  also  designate  the  Chairman  of  the  Committee.

          2.2  Board  or  Committee  Action.  The  Board,  or  the  Committee as
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appropriate,  shall  hold  its  meetings  at  such times and places as it may be
determine.  A  majority  of  the  members  of  such  Board  or  Committee  shall
constitute  a  quorum, and all determinations of the Board or Committee shall be
made  by not less than a majority of its members.  Any decision or determination
reduced  to  writing  and  signed  by  a  majority of the members shall be fully
effective  as if it had been made by a majority vote of its members at a meeting
duly called and held.  The Board or Committee may designate the Secretary of the
Company  or  other  Company  employees  to  assist the Board or Committee in the
administration  of this Plan, and may grant authority to such persons to execute
award  agreements or other documents on behalf of the Board or the Committee and
the  Company.  Any  duly  constituted  committee  of  the  Board  satisfying the
qualifications  of  this  Section  2  may  be  appointed  as  the  Committee.

          2.3  Expenses.  All  expenses and liabilities incurred by the Board or
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the  Committee in the administration of this Plan shall be borne by the Company.
The  Board  or  the  Committee may employ attorneys, consultants, accountants or
other  persons.

<PAGE>
     3.  Stock  Reserved.  Subject  to adjustment as provided in Section 3.2 and
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6.11 hereof, the aggregate number of shares of Common Stock that may be optioned
under  this  Plan  is 500,000.  The shares subject to this Plan shall consist of
authorized  but  unissued shares of Common Stock and such number of shares shall
be  and  is hereby reserved for sale for such purpose.  Any of such shares which
may  remain  unsold  and  which  are  not  subject to outstanding options at the
termination  of  this  Plan  shall  cease to be reserved for the purpose of this
Plan,  but  until termination of this Plan or the termination of the last of the
options granted under this Plan, whichever last occurs, the Company shall at all
times  reserve  a  sufficient  number of shares to meet the requirements of this
Plan.  Should  any  option  expire or be canceled prior to its exercise in full,
the  shares  theretofore  subject to such option may again be made subject to an
option  under  this  Plan.

     4.  Eligibility.  The  persons  eligible  to  participate in this Plan as a
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recipient  of options ("Optionee") shall include only key employees, consultants
and  directors  of  the  Company  or  its  Affiliates  at the time the option is
granted.  An employee or consultant who has been granted an option hereunder may
be  granted  an  additional option or options, if the Board or the Committee, as
appropriate,  shall  so  determine.

     5.  Grant  of  Options.
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          5.1  Discretion.  The  Board  or Committee, as appropriate, shall have
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sole  and  absolute  discretionary  authority  (i)  to determine, authorize, and
designate  those  key employees, consultants and directors of the Company or its
Affiliates  who  are  to  receive options under this Plan, (ii) to determine the
number  of  shares  of  Common Stock to be covered by such options and the terms
thereof,  and  (iii) to determine the type of option granted: ISOs, Nonqualified
Options  or  a  combination  of  ISOs  and  Nonqualified  Options; provided that
consultants  and  directors who are not employees of the Company may not receive
any  ISOs.  The  Board  or Committee shall thereupon grant options in accordance
with  such determination as evidenced by a written option agreement.  Subject to
the  express  provisions  of  this  Plan,  the Board or the Committee shall have
discretionary  authority  to  prescribe, amend and rescind rules and regulations
relating  to this Plan, to interpret this Plan, to prescribe and amend the terms
of  the  option  agreements  (which need not be identical) and to make all other
determinations  deemed  necessary  or  advisable  for the administration of this
Plan.

          5.2  Shareholder  Approval.  All  options  granted under this Plan are
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subject  to,  and  may not be exercised before, the approval of this Plan by the
shareholders  prior  to  the first anniversary date of the Board meeting held to
approve  this  Plan, by the affirmative vote of the holders of a majority of the
outstanding shares of the Company present, or represented by proxy, and entitled
to  vote  thereat or written consent in accordance with the laws of the State of
Delaware;  provided  that if such approval by the shareholders of the Company is
not  forthcoming,  all options previously granted under this Plan shall be void.

          5.3  Limitation on Incentive Stock Options.  The aggregate fair market
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value  (determined  in  accordance with Section 6.2 of this Plan at the time the
option  is  granted)  of  the  Common  Stock  with  respect to which ISOs may be
exercisable  for  the  first time by any Optionee during any calendar year under
all  such  plans  of  the  Company and its Affiliates shall not exceed $100,000.

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<PAGE>
     6.  Terms  and  Conditions.   Each  option granted under this Plan shall be
         ----------------------
evidenced  by  an  agreement,  in a form approved by the Board or the Committee,
which shall be subject to the following express terms and conditions and to such
other  terms  and conditions as the Board or the Committee may deem appropriate.

          6.1  Option  Period.  The Board or the Committee shall promptly notify
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the  Optionee  of  the  option  grant  and a written agreement shall promptly be
executed  and  delivered  by  and  on  behalf  of  the Company and the Optionee,
provided that the option grant shall expire if a written agreement is not signed
by  said  Optionee (or his agent or attorney) and returned to the Company within
60  days  from  date  of receipt by the Optionee of such agreement.  The date of
grant  shall  be  the  date  the  option is actually granted by the Board or the
Committee,  even  though  the written agreement may be executed and delivered by
the  Company  and  the  Optionee  after  that date.  Each option agreement shall
specify the period for which the option thereunder is granted (which in no event
shall  exceed  ten years from the date of grant in the case of an ISO) and shall
provide  that  the  ISO shall expire at the end of such period.  If the original
term  of an option is less than ten years from the date of grant, the option may
be  amended  prior  to  its  expiration,  with  the approval of the Board or the
Committee  and  the  Optionee, to extend the term so that the term as amended is
not  more than ten years from the date of grant.  However, in the case of an ISO
granted  to  an individual who, at the time of grant, owns stock possessing more
than  10  percent  of the total combined voting power of all classes of stock of
the  Company or its Affiliate ("Ten Percent Stockholder"), such period shall not
exceed  five  years  from  the  date  of  grant.

          6.2  Exercise Price.  The exercise price of each share of Common Stock
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subject  to  each  option granted pursuant to this option is granted and, in the
case of ISOs, shall not be less than 100% of the fair market value of a share of
Common  Stock  on  the date the option is granted, as determined by the Board or
the  Committee.  In  the  case of ISOs granted to a Ten Percent Stockholder, the
exercise  price  shall not be less than 110% of the fair market value of a share
of  Common  Stock on the date the option is granted.  The exercise price of each
share  of Common Stock subject to a Nonqualified Option under this Plan shall be
determined  by  the  Board  or  the Committee prior to granting the option.  The
Board  or the Committee shall set the exercise price for each share subject to a
Nonqualified  Option  at  such  price  as the Board or the Committee in its sole
discretion  shall  determine,  provided that the exercise price of each share of
Common  Stock subject to a Nonqualified Option shall not be less than 85% of the
fair  market  value of a share of Common Stock on the date the option is granted
as  determined  by  the  Board  or  the  Committee.

     For  all  purposes  under  this  Plan,  the fair market value of a share of
Common  Stock  on  a  particular date shall be equal to the mean of the reported
high  and  low sales prices of the Common Stock on the principal market on which
the  Common  Stock  is listed on that date, or if no prices are reported on that
date, on the last preceding date on which such prices of the Common Stock are so
reported.  If  the  Common  Stock  is  not traded on public market at the time a
determination  of  its  fair  market value is required to be made hereunder, its
fair market value shall be deemed to be equal to the average between the closing
bid  and ask prices of the Common Stock on the most recent date the Common Stock
was  publicly  traded.  In  the event the Common Stock is not publicly traded at
the  time  a  determination  of  its value is required to be made hereunder, the
determination  of  its  fair  market  value  shall  be  made by the Board or the
Committee  in  such  manner  as  it  deems  appropriate.

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<PAGE>
          6.3  Exercise  Period.  The  Board or the Committee may provide in the
               ----------------
option  agreement that an option may be exercised immediately or over the period
of  the  grant and in whole or in increments.  However, no portion of any option
may  be  exercisable  by  an  Optionee prior to the approval of this Plan by the
shareholders  of  the  Company.

          6.4  Procedure  for  Exercise.  Options  shall  be  exercised  by  the
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delivery  by  the  Optionee  of  written  notice to the Secretary of the Company
setting  forth  the  number  of shares of Common Stock with respect to which the
option  is being exercised.  The notice shall be accompanied by, at the election
of  the Optionee and as permitted by the Board or the Committee in the Agreement
granting  such  options,  (i)  cash,  cashier's  check, bank draft, or postal or
express  money  order  payable  to  the  order of the Company, (ii) certificates
representing  shares  of  Common  Stock  theretofore  owned by the Optionee duly
endorsed  for transfer to the Company, (iii) an election by the Optionee to have
the Company withhold the number of shares of Common Stock the fair market value,
less  the  exercise  price, of which is equal to the aggregate exercise price of
the  shares  of  Common  Stock issuable upon exercise of the option, or (iv) any
combination  of the preceding, equal in value to the full amount of the exercise
price.  Notice  may  also  be  delivered  by telecopy provided that the exercise
price  of  such  shares is received by the Company via wire transfer on the same
day  the  telecopy  transmission  is  received by the Company.  The notice shall
specify  the address to which the certificates for such shares are to be mailed.
An option to purchase shares of Common Stock in accordance with this Plan, shall
be  deemed  to have been exercised immediately prior to the close of business on
the  date  (i)  written  notice of such exercise and (ii) payment in full of the
exercise  price  for  the number of share for which options are being exercised,
are  both  received  by  the  Company  and the Optionee shall be treated for all
purposes  as  the  record holder of such shares of Common Stock as of such date.

     As  promptly  as  practicable  after  receipt  of  such  written notice and
payment,  the  Company shall deliver to the Optionee certificates for the number
of shares with respect to which such option has been so exercised, issued in the
Optionee's  name or such other name as Optionee directs; provided, however, that
such  delivery  shall  be deemed effected for all purposes when a stock transfer
agent of the Company shall have deposited such certificates in the United States
mail,  addressed  to  the  Optionee  at  the  address specified pursuant to this
Section  6.4.

          6.5  Termination  of  Employment.  If an employee to whom an option is
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granted  ceases  to  be employed by the Company or its affiliates for any reason
other  than death or disability or if a director or consultant to whom an option
is  granted ceases to serve on the Board or as a consultant for any reason other
than  death  or  disability, any option which is exercisable on the date of such
termination  of  employment or cessation of serving on the Board or cessation of
service  as  a  consultant  shall  expire  three-months  from  the  date of such
termination  or  cessation but in no event may the option be exercised after its
expiration  under  the  terms  of  the  option  agreement.

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<PAGE>
          6.6  Disability  or  Death.  In  the  event  the  Optionee  dies or is
               ---------------------
determined  under this Plan to be disabled while the Optionee is employed by the
Company  or  its  Affiliates,  acts  as consultant or serves on the Board of the
Company, the options previously granted to the Optionee may be exercised (to the
extent  the  Optionee  would have been entitled to do so at the date of death or
the  determination  of  disability)  at any time and from time to time, within a
twelve-month  period  after  such  death  or determination of disability, by the
Optionee,  the  guardian of the Optionee's estate, the executor or administrator
of  the  Optionee's  estate  or  by the person or persons to whom the Optionee's
rights  under  the  option  shall  pass  by  will  or  the  laws  of descent and
distribution,  but  in no event may the option be exercised after its expiration
under  the  terms  of  the  option agreement.  An Optionee shall be deemed to be
disabled  if,  in  the  opinion  of  a  physician  selected  by the Board or the
Committee,  the  Optionee is incapable of performing services for the Company of
the  kind  the  Optionee  was  performing at the time the disability occurred by
reason  of any medically determinable physical or mental impairment which can be
expected to result in death or to be of long, continued and indefinite duration.
The date of determination of disability for purposes hereof shall be the date of
such  determination  by  such  physician.

          6.7  Transferability.  An  option  granted pursuant to this Plan shall
               ---------------
not  be  assignable  or otherwise transferable by the Optionee otherwise than by
Optionee's  will  or  by  the  laws of descent and distribution or pursuant to a
qualified  domestic  relations  order  as  defined in the code or Title I of the
Employee  Retirement  Income  Security Act, as amended, or the rules thereunder.
During  the lifetime of an Optionee, an option shall be exercisable only by such
Optionee.  Any  heir or legatee of the Optionee shall take rights granted herein
and  in  the  option  agreement  subject  to the terms and conditions hereof and
thereof.  No  such  transfer  of any option to heirs or legatees of the Optionee
shall  be  effective  to  bind  the  Company  unless the Company shall have been
furnished  with  written notice thereof and a copy of such evidence as the Board
or  the  Committee  may deem necessary to establish the validity of the transfer
and  the acceptance by the transferee or transferees of the terms and conditions
hereof.

          6.8  Incentive  Stock Options.  Each option agreement may contain such
               ------------------------
terms and provisions as the Board or the Committee may determine to be necessary
or  desirable  in  order  to  qualify  under the Code of option designated as an
incentive  stock  option.

          6.9  No Rights as Shareholder.  No Optionee shall have any rights as a
               ------------------------
shareholder  with  respect  to  shares  covered by an option until the option is
exercised  by  written  notice and accompanied by payment as provided in Section
6.4  above.

          6.10  Extraordinary  Corporate  Transactions.  The  existence  of
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outstanding  options  shall  not  affect  in  any  way the right or power of the
Company  or  its  shareholders  to  make  or  authorize  any or all adjustments,
recapitalizations, reorganizations, exchanges, or other changes in the Company's
capital  structure  or  its  business,  or  any  merger  or consolidation of the
Company,  or  any  issuance  of Common Stock or other securities or subscription
rights  thereto,  or  any  issuance  of  bonds,  debentures,  preferred or prior
preference  stock  ahead of or affecting the Common Stock or the rights thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or proceeding,
whether  of  a  similar character or otherwise.  If the Company recapitalizes or

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<PAGE>
otherwise  changes  its capital structure, or merges, consolidates, sells all of
its  assets  or  dissolves  (each  of the forgoing a "Fundamental Change"), then
thereafter upon any exercise of an option theretofore granted the Optionee shall
be  entitled  to  purchase under such option, in lieu of the number of shares of
Common  Stock as to which option shall then be exercisable, the number and class
of shares of stock and securities to which the Optionee would have been entitled
pursuant  to  the  terms of the Fundamental Change if, immediately prior to such
Fundamental  Change, the Optionee had been the holder of record of the number of
shares  of Common Stock as to which such option is then exercisable.  If (i) the
Company  shall  not  be  the surviving entity in any merger or consolidation (or
survives  only as a subsidiary of another entity), (ii) the Company sells all or
substantially  all  of  its  assets  to any other person or entity (other than a
wholly-owned  subsidiary),  (iii)  any  person or entity (including a "group" as
contemplated  by  Section  13(d)(3)  of  the  Exchange  Act)  acquires  or gains
ownership or control of (including, without limitation, power to vote) more than
50%  of  the  outstanding  shares  of  Common  Stock,  (iv) the Company is to be
dissolved  and  liquidated,  or  (v)  as  a  result  of  or in connection with a
contested  election  of directors, the persons who were directors of the Company
before  such  election  shall  cease to constitute a majority of the Board (each
such  event  in  clauses  (i)  through  (v)  above  is  referred  to herein as a
"Corporate  Change"),  the  Board  or the Committee, in its sole discretion, may
accelerate  the  time  at which all or a portion of an Optionee's options may be
exercised  for  a  limited  period  of  time  before  or after a specified date.

          6.11  Changes  in  Capital  Structure.  If  the  outstanding shares of
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Common  Stock  or other securities of the Company, or both, for which the option
is  then exercisable shall at any time be changed or exchanged by declaration of
a  stock  dividend,  stock split, combination of shares or recapitalization, the
number  and kind of shares of Common Stock or other securities which are subject
to  this  Plan  or  subject to any options theretofore granted, and the exercise
prices,  shall  be  appropriately  and  equitably adjusted so as to maintain the
proportionate  number  of  shares  or  other  securities  without  changing  the
aggregate  exercise  price.

          6.12  Acceleration  of  Options.  Except  as  hereinbefore  expressly
                -------------------------
provided,  (i)  the  issuance  by the Company of shares of stock of any class of
securities  convertible  into  shares of stock of any class, for cash, property,
labor  or services, upon direct sale, upon the exercise of rights or warrants to
subscribe  therefor,  or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, (ii) the payment of a dividend
in  property  other  than  Common  Stock, or (iii) the occurrence of any similar
transaction,  and  in  any case whether or not for fair value, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number of
shares  of  Common Stock subject to options thereto fore granted or the purchase
price  per  share, unless the Board or the Committee shall determine in its sole
discretion  that  an  adjustment  is necessary to provide equitable treatment to
Optionee.  Notwithstanding  anything to the contrary contained in this Plan, the
Board  or  the Committee may in its sole discretion accelerate the time at which
any  option may be exercised, including, but not limited to, upon the occurrence
of  the  events  specified  in  this  Section  6.

                                        6
<PAGE>
     7.  Amendments  or  Termination.  The Board may amend, alter or discontinue
         ---------------------------
this  Plan,  but no amendment or alteration shall be made which would impair the
rights  of  any  Optionee,  without  his  consent,  under any option theretofore
granted,  or  which, without the approval of the shareholders, would: (i) except
as is provided in Section 6.11 of this Plan, increase the total number of shares
reserved  for  the  purposes  of  this  Plan,  (ii)  change the class of persons
eligible  to  participate  in  this  Plan as provided in Section 4 of this Plan,
(iii) extend the applicable maximum option period provided for in Section 6.1 of
this  Plan, (iv) extend the expiration date of this Plan set forth in Section 14
of  this  Plan, (v) except as provided in Section 6.11 of this Plan, decrease to
any  extent  the  exercise  price  of any option granted under this Plan or (vi)
withdraw  the  administration  of  this  Plan  from  the Board or the Committee.

     8.  Compliance  With  Other Laws and Regulations.  This Plan, the grant and
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exercise  of  options  thereunder, and the obligation of the Company to sell and
deliver  shares  under  such options, shall be subject to all applicable federal
and  state laws, rules and regulations and to such approvals by any governmental
or  regulatory  agency as may be required.  The Company shall not be required to
issue  or  deliver  any  certificates  for  shares  of Common Stock prior to the
completion of any registration or qualification of such shares under any federal
or  state  law  or  issuance  of any ruling or regulation of any government body
which  the  Company  shall, in its sole discretion, determine to be necessary or
advisable.  Any  adjustments  provided for in Sections 6.10, .11 and .12 of this
Plan  shall  be subject to any shareholder action required by Delaware corporate
law.

     9.  Purchase for Investment.  Unless the options and shares of Common Stock
         -----------------------
covered  by  this Plan have been registered under the Securities Act of 1933, as
amended,  or  the  Company has determined that such registration is unnecessary,
each  person exercising an option under this Plan may be required by the Company
to  give  a  representation in writing that such person is acquiring such shares
for his or her own account for investment and not with a view to, or for sale in
connection  with,  the  distribution  of  any  part  thereof.

     10.  Taxes.
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          10.1  The  Company may make such provisions as it may deem appropriate
for  the  withholding of any taxes which it determines is required in connection
with  any  options  granted  under  this  Plan.

          10.2 Notwithstanding the terms of Section 10.1, each Optionee must pay
all  taxes  required  to  be  withheld by the Company or paid by the Optionee in
connection  with  the  exercise  of  a  Nonqualified  Option.

     11.  Replacement  of Options.  The Board or the Committee from time to time
          -----------------------
may  permit  an  Optionee  under  this  Plan  to  surrender for cancellation any
unexercised  outstanding  option  and  receive  from  the Company in exchange an
option  for  such  number  of shares of Common Stock as may be designated by the
Board or the Committee.  The Board or the Committee may, with the consent of the
person entitled to exercise any outstanding option, amend such option, including
reducing the exercise price of any option to not less than the fair market value
of the Common Stock at the time of the amendment and extending the term thereof.

                                        7
<PAGE>
     12.  No  Right  to  Employment.  Employees shall be considered to be in the
          -------------------------
employment of the Company so long as they remain employees of the Company or its
Affiliates.  Any  questions  as to whether and when there has been a termination
of  such employment and the cause of such termination shall be determined by the
Board or the Committee, and its determination shall be final.  Nothing contained
herein  shall be construed as conferring upon the Optionee the right to continue
in  the  employ  of  the Company or its Affiliates, nor shall anything contained
herein  be  construed  or  interpreted  to  limit  the  "employment  at  will"
relationship between the Optionee and the Company or its Affiliates.  The option
agreements may contain such provisions as the Board or the Committee may approve
with  reference  to  the  effect  of  approved  leaves  of  absence.

     13.  Liability  of Company for Non-Issuance of Shares and Tax Consequences.
          ---------------------------------------------------------------------
The  Company  and  any  Affiliates  that are in existence or hereafter come into
existence  shall  not  be  liable  to  an  Optionee  or  other  persons  as  to:

          13.1  The  non-issuance  or sale of shares as to which the Company has
been unable to obtain from any regulatory body having jurisdiction the authority
deemed  by the Company's counsel to be necessary to the lawful issuance and sale
of  any  shares  hereunder;  and

          13.2  Any  tax consequence expected, but not realized, by any Optionee
or  other  person  due  to  the  exercise  of  any  option  granted  hereunder.

     14.  Effectiveness and Expiration of Plan.  This Plan shall be effective on
          ------------------------------------
the  date  of adoption by the Board.  If the shareholders of the Company fail to
approve  this  Plan within twelve months of the date of the Board adoption, this
Plan  shall  terminate  and all options previously granted under this Plan shall
become  void  and of no effect.  This Plan shall expire ten years after the date
of the Board adopts this Plan and thereafter no option shall be granted pursuant
to  this  Plan.

     15.  Non-Exclusivity  of  this Plan.  Neither the adoption by the Board nor
          ------------------------------
the  submission  for  approval  of  this Plan to the shareholders of the Company
shall  be  construed  as  creating  any limitations on the power of the Board to
adopt  such  other  incentive  arrangements  as it may deem desirable, including
without  limitation, the granting of restricted stock or stock options otherwise
than  under  this Plan, and such arrangements may be either generally applicable
or  applicable  only  in  specific  cases.

     16.  Governing  Law.  This  Plan  and  any  agreements  hereunder  shall be
          --------------
interpreted  and  construed in accordance with the laws of the State of Delaware
and  applicable  federal  law.

     17.  Cashless Exercise.  The Board or the Committee also may allow cashless
          -----------------
exercises  as  permitted under the Federal Reserve Board's Regulation T, subject
to applicable securities law restrictions, or by any other means which the Board
or  the  Committee  determines  to  be  consistent  with this Plan's purpose and
applicable  law.  The proceeds from such a payment shall be added to the general
funds  of  the  Company  and  shall  be  used  for  general  corporate purposes.

<PAGE>
     IN  WITNESS  WHEREOF,  and  as  conclusive  evidence of the adoption of the
foregoing  by  directors of the Company, Houston American Energy Corp has caused
these presents to be duly executed in its name and behalf by its proper officers
thereunto  duly  authorized  as  of  this  12th  day  of  August  2005.

                                        HOUSTON AMERICAN ENERGY CORP

                                        By: /s/ John Terwilliger
                                        Name:   John Terwilliger
                                        Title:  President

                                        9HOUSTON AMERICAN ENERGY CORP.

                          STOCK OPTION AGREEMENT - NQO

     THIS STOCK OPTION AGREEMENT (the "Agreement") is entered into by and among
_________________, an individual (the "Optionee"), and HOUSTON AMERICAN ENERGY
CORP., a Delaware corporation (the "Company").

                                    RECITALS

     WHEREAS, the Company has heretofore adopted the HOUSTON AMERICAN ENERGY
CORP 2005 STOCK OPTION PLAN (the "Plan") for the purpose of providing eligible
key employees, consultants and directors of the Company and its Affiliates (as
defined in the Plan), with increased incentive to render services, to exert
maximum effort for the business success of the Company and to strengthen the
identification of employees, consultants and directors with the shareholders.
The Company, acting through its Board of Directors (the "Board") or the
Compensation Committee of the Board (the "Committee"), has determined that its
interests will be advanced by the issuance to Optionee, as an employee of the
Company, of a stock option under the Plan.

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties, covenants and agreements hereinafter set
forth, and intending to be legally bound, the parties hereto hereby agree as
follows:

     SECTION 1.  GRANT OF OPTION.  Subject to the terms and conditions set forth
herein, the Company hereby irrevocably grants to Optionee the right and option,
of the character indicated on EXHIBIT A attached hereto ("Option"), to purchase
                              ---------
from the Company the number of shares of the Company's common stock, $0.001 par
value ("Common Stock") set out on EXHIBIT A at the price per share indicated on
                                  ---------
EXHIBIT A.
---------

     SECTION 2.  OPTION PERIOD.  The Option herein granted may be exercised by
Optionee in whole or in part at any time during a period beginning six months
from the date hereof and ending on the date set out on EXHIBIT A (the "Option
                                                       ---------
Period").

     SECTION 3.  PROCEDURE FOR EXERCISE.  The Option herein granted may be
exercised by the delivery by Optionee of written notice to the Company setting
forth the number of shares of Common Stock with respect to which the Option is
being exercised.  The notice shall be accompanied by, at the election of the
Optionee:

          (a)     cash, cashier's check, bank draft, or postal or express money
     order payable to the order of the Company;

          (b)     certificates representing shares of Common Stock theretofore
     owned by Optionee duly endorsed for transfer to the Company;

<PAGE>
          (c)     if approved by the Board or the Committee, to the extent
     permitted by applicable law, a copy of irrevocable instructions to a broker
     to deliver promptly to the Company the amount of sale or loan proceeds
     necessary to pay the Option Price, and, if requested, the amount of any
     federal, state, local or foreign withholding taxes. To facilitate the
     foregoing, the Company may enter into agreements for coordinated procedures
     with one or more brokerage firm; or

          (d)     any combination of the preceding, equal in the value to the
     aggregate exercise price.

Notice may also be delivered by telecopy provided that the exercise price of
such shares is received by the Company on the same day the telecopy transmission
is received by the Company.  The notice shall specify the address to which the
certificates for such shares are to be mailed.  An option to purchase shares of
Common Stock hereunder shall be deemed to have been exercised immediately prior
to the close of business on the date (i) written notice of such exercise and
(ii) payment in full of the exercise price for the number of shares for which
Options are being exercised, are both received by the Company and Optionee shall
be treated for all purposes as the record holder of such shares of Common Stock
as of such date.

     As promptly as practicable after receipt of such written notice and
payment, the Company shall cause the shares being purchased to be issued to the
Optionee and to record the issuance of such shares to Optionee.

     SECTION 4.  DISABILITY OR DEATH.  In the event the Optionee dies or is
determined to be disabled during the term of this Option, the options previously
granted to Optionee may be exercised (to the extent Optionee would have been
entitled to do so at the date of death or the determination of disability) at
any time and from time to time, by the Optionee, the guardian of Optionee's
estate, the executor or administrator of Optionee's estate or by the person or
persons to whom Optionee's rights under this Option Agreement shall pass by will
or the laws of descent and distribution, but in no event may the Option be
exercised after the earlier of twelve months from the date of death or
disability or its expiration under the terms of this Option Agreement.  An
Optionee shall be deemed to be disabled if, in the opinion of a physician
acceptable to the Board or the Committee, Optionee is incapable of performing
services for the Company of the kind Optionee was performing at the time the
disability occurred by reason of any medically determinable physical or mental
impairment which can be expected to result in death or to be of long, continued
and indefinite duration.  The date of determination of disability for purposes
hereof shall be the date of such determination by such physician.

     SECTION 5.  TRANSFERABILITY.  This Option shall not be transferable by
Optionee otherwise than by Optionee's will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Code or Title I of the Employee Retirement Income Security Act, as amended,
or the rules thereunder.  During the lifetime of Optionee, the Option shall be
exercisable only by Optionee.  Any heir or legatee of Optionee shall take rights
herein granted subject to the terms and conditions hereof.  No such transfer of
this Option Agreement to heirs or legatees of Optionee shall be effective to
bind the Company unless the Company shall have been furnished with written
notice thereof and a copy of such evidence as the Board or the Committee may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee or transferees of the terms and conditions hereof.

                                        2
<PAGE>
     SECTION 6.  NO RIGHTS AS SHAREHOLDER.  Optionee shall have no rights as a
shareholder with respect to any shares of Common Stock covered by this Option
Agreement until the Option is exercised by written notice and accompanied by
payment as provided in Section 3 of this Option Agreement.

     SECTION 7.  CHANGES IN CAPITAL STRUCTURE.  If the outstanding shares of
Common Stock or other securities of the Company, or both, for which the Option
is then exercisable shall at any time be changed or exchanged by declaration of
a stock dividend, stock split, combination of shares, or recapitalization, the
number and kind of shares of Common Stock or subject to the Option and the
exercise price, shall be appropriately and equitably adjusted so as to maintain
the proportionate number of shares or other securities without changing the
aggregate exercise price.

     SECTION 8.  COMPLIANCE WITH LAWS.  Notwithstanding any of the other
provisions hereof, Optionee agrees that he or she will not exercise the Option
granted hereby, and that the Company will not be obligated to transfer any
shares pursuant to this Option Agreement, if the exercise of the Option or the
transfer of such shares of Common Stock would constitute a violation by Optionee
or by the Company of any provision of any law or regulation of any governmental
authority.

     SECTION 9.  NO RIGHT TO CONTINUED SERVICE.  Optionee shall be considered to
be serving as an employee of the Company so long as he or she continues to
provide services to the Company.  Any questions as to whether and when there has
been a termination of such service as an employee and the cause of such
termination shall be determined by the Board, and its determination shall be
final.  Nothing contained herein shall be construed as conferring upon Optionee
the right to continue in the service of the Company as an employee.

     SECTION 10.  RESOLUTION OF DISPUTES.  As a condition of the granting of the
Option hereby, Optionee, and Optionee's heirs, personal representatives and
successors agree that any dispute or disagreement which may arise hereunder
shall be determined by the Board in its sole discretion and judgment and that
any such determination and any interpretation by the Board of the terms of this
Option Agreement shall be final and shall be binding and conclusive, for all
purposes, upon the Company, Optionee, and Optionee's heirs, personal
representatives and successors.

     SECTION 11.  LEGENDS ON CERTIFICATE.  The certificates representing the
shares of Common Stock purchased by exercise of the Option will be stamped or
otherwise imprinted with legends in such form as the Company or its counsel may
require with respect to any applicable restrictions on sale or transfer and the
stock transfer records of the Company will reflect stop-transfer instructions
with respect to such shares.

     SECTION 12.  NOTICES.  Every notice hereunder shall be in writing and shall
be given by registered or certified mail.  All notices of the exercise of any
Option hereunder shall be directed to the Company as follows: Houston American
Energy Corp, 801 Travis, Suite 2020, Houston, Texas 77002.  Any notice given by
the Company to Optionee shall be directed to Optionee at the address set forth
on EXHIBIT A attached hereto.  The Company shall be under no obligation
   ---------
whatsoever to advise Optionee of the existence, maturity or termination of any
of

                                        3
<PAGE>
Optionee's rights hereunder and Optionee shall be deemed to have familiarized
himself with all matters contained herein.

     SECTION 13.  "MARKET STAND-OFF" AGREEMENT.  Optionee agrees that, if
requested by the Company or the managing underwriter of any proposed public
offering of the Company's securities, Optionee will not sell or otherwise
transfer or dispose of any shares of Company common stock held by Optionee
without the prior written consent of the Company or such underwriter, as the
case may be, during such period of time, not to exceed one hundred eighty (180)
days following the effective date of the registration statement filed by the
Company with respect to such offering, as the Company or the underwriter may
specify.

     SECTION 14.  WITHHOLDING OF TAX.  Optionee shall notify the Company of the
disposition of any shares of Common Stock acquired pursuant to this Option and,
to the extent that the exercise of this Option or the disposition of shares of
Common Stock acquired by exercise of this Option results in compensation income
to Optionee for federal or state income tax purposes, Optionee shall pay to the
Company at the time of such exercise or disposition (or such other time as the
law permits if Optionee is subject to Section 16(b) of the Securities Exchange
Act of 1934, as amended) such amount of money as the Company may require to meet
its obligation under applicable tax laws or regulations; and, if Optionee fails
to do so, the Company is authorized to withhold from any cash remuneration then
or thereafter payable to Optionee, any tax required to be withheld by reason of
such resulting compensation income or Company may otherwise refuse to issue or
transfer any shares otherwise required to be issued or transferred pursuant to
the terms hereof.

     SECTION 15.  AGREEMENT SUBJECT TO PLAN.  This Option Agreement is subject
to the Plan.  The terms and provisions of the Plan (including any subsequent
amendments thereto) are hereby incorporated herein be reference thereto.  In the
event of a conflict between any term or provision contained herein and a term or
provision of the Plan, the applicable terms and provisions of the Plan will
govern and prevail.  All definitions of words and terms contained in the Plan
shall be applicable to this Option Agreement.

     SECTION 16.  BINDING EFFECT.  This Option Agreement shall be binding upon
and inure to the benefit of any successors to the Company and all persons
lawfully claiming under Optionee as provided herein.

     IN WITNESS WHEREOF, this Stock Option Agreement has been executed as of
this ___ day of ________ 20__.

                                        HOUSTON AMERICAN ENERGY CORP

                                        By:
                                           ---------------------------
                                        John Terwilliger, President

                                        OPTIONEE:

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

                                        4
<PAGE>
                                    EXHIBIT A

                             STOCK OPTION AGREEMENT

OPTION GRANT DATE:
                         ----------------------

OPTIONEE:
                         ----------------------

OPTIONEE ADDRESS:
                         ----------------------

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

OPTION CHARACTER:
                         ----------------------

NUMBER OF
OPTION SHARES:
                         ----------------------

EXERCISE PRICE:          $
                          ---------------------

OPTION PERIOD:
                         ----------------------

VESTING SCHEDULE:
                         ----------------------

IN WITNESS WHEREOF, this Exhibit A to Stock Option Agreement has been executed
and acknowledged as of the day and date indicated.

                                        HOUSTON AMERICAN ENERGY CORP

Dated:             , 20
       ------------    --
                                        By:
                                           ---------------------------
                                        John Terwilliger, President

                                        OPTIONEE:
Dated:             , 20
       ------------    --

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

                                        5

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