As filed with the Securities and Exchange Commission on April 17, 2001
Registration No. _________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------
FORM S-3
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
--------
HARKEN ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
--------
DELAWARE 95-2841597
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
HARKEN ENERGY CORPORATION
16285 PARK TEN PLACE, SUITE 600
HOUSTON, TEXAS 77084
(281) 717-1300
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
KAREN KERR-JOHNSON
ASSISTANT GENERAL COUNSEL
HARKEN ENERGY CORPORATION
16285 PARK TEN PLACE, SUITE 600
HOUSTON, TEXAS 77084
(281) 717-1300
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
--------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
--------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_] __________________
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
TITLE OF EACH CLASS OF SHARES AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED TO BE AGGREGATE AGGREGATE OFFERING REGISTRATION
REGISTERED PRICE PER SECURITY (1) PRICE (1) FEE (1)
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.01 per share 521,232 $3.20 $1,667,942 $442.00
- -----------------------------------------------------------------------------------------------------------------------------------
Preferred Stock Purchase Rights 521,232 Not Applicable Not Applicable -- (2)
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based on the average of the high and low sales
prices of the common stock as reported by the American Stock Exchange on
April 12, 2001.
(2) In accordance with Rule 457(g), no additional registration fee is required
in respect of the Preferred Stock Purchase Rights.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
SUBJECT TO COMPLETION DATED APRIL 17, 2001
PROSPECTUS
521,232 Shares
HARKEN ENERGY CORPORATION
Common Stock
_________
The selling stockholders of Harken Energy Corporation described in this
prospectus are offering for sale 521,232 shares of common stock of Harken Energy
Corporation. The selling stockholders' shares of common stock being offered for
sale include preferred stock purchase rights attached to the common stock under
Harken's Stockholder Rights Plan. Harken will not receive any of the proceeds
from the sale of the 521,232 shares of common stock.
The selling stockholders may offer their shares from time to time in open
market transactions on the American Stock Exchange or in private transactions,
at prevailing market prices or at privately negotiated prices. The selling
stockholders may effect such transactions by selling the shares to or through
broker-dealers. These broker-dealers, if used, may receive discounts,
concessions or commissions from the selling stockholders or from the purchaser
of the shares. The selling stockholders will receive the purchase price of the
shares of common stock sold less any such discounts, concessions or commissions.
The selling stockholders will be responsible for any such discounts, concessions
or commissions.
The common stock is traded on the American Stock Exchange, under the symbol
"HEC." On April 12, 2001, the closing sales price of the common stock was $3.20
per share. Harken's principal offices are located at 16285 Park Ten Place, Suite
600, Houston Texas 77084, and its telephone number is (281) 717-1300.
PROSPECTIVE INVESTORS SHOULD CONSIDER AND REVIEW THE INFORMATION UNDER THE
HEADING "RISK FACTORS" BEGINNING ON PAGE 3 PRIOR TO INVESTING IN THE COMMON
STOCK.
_________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_________
The date of this prospectus is April ____, 2001.
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and neither the selling
stockholders nor we are soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
TABLE OF CONTENTS
Page
----
The Company............................................................ 3
Risk Factors........................................................... 3
Safe Harbor for Forward-Looking Statements............................. 10
Where You Can Get More Information..................................... 11
Use of Proceeds........................................................ 11
Subsequent Events...................................................... 12
Information About the Selling Stockholders............................. 12
Plan of Distribution................................................... 13
Legal Matters.......................................................... 14
Experts................................................................ 14
_________
YOU SHOULD RELY ONLY ON THE INFORMATION IN THIS PROSPECTUS AND THE ADDITIONAL
INFORMATION DESCRIBED UNDER THE HEADING "WHERE YOU CAN GET MORE INFORMATION."
WE HAVE NOT AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH DIFFERENT
INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR INCONSISTENT INFORMATION,
YOU SHOULD NOT RELY ON IT. NEITHER THE SELLING STOCKHOLDERS NOR WE ARE MAKING
AN OFFER TO SELL THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS
NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION IN THIS PROSPECTUS AND
THE ADDITIONAL INFORMATION DESCRIBED UNDER THE HEADING "WHERE YOU CAN GET MORE
INFORMATION" WAS ACCURATE ON THE DATE ON THE FRONT COVER OF THE PROSPECTUS ONLY.
OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE
CHANGED SINCE THAT DATE.
_________
2
The Company
Harken explores for, develops and produces oil and gas both domestically and
internationally. Harken's domestic operations are primarily located in the
onshore and offshore Gulf Coast regions of South Texas and Louisiana, in
portions of West Texas and the Texas Panhandle, the Magnolia region of Arkansas
and the Carlsbad region of New Mexico. Harken's international operations are
primarily concentrated in the Republic of Colombia and the Republic of Costa
Rica.
Harken was incorporated in 1973 in the State of California and reincorporated
in 1979 in the State of Delaware. Harken's principal offices are located at
16285 Park Ten Place, Suite 600, Houston Texas 77084 and its telephone number is
(281) 717-1300.
RISK FACTORS
Prior to making an investment decision, prospective investors should
consider carefully all of the information in this prospectus and should evaluate
the following risk factors.
HARKEN'S OIL AND GAS EXPLORATION, DEVELOPMENT AND PRODUCTION ACTIVITIES ARE
SUBJECT TO VARIOUS INDUSTRY OPERATING RISKS
Harken's oil and gas operations will be subject to the economic risks typically
associated with exploration, development and production activities, including
the necessity of significant expenditures to locate and acquire producing
properties and to drill exploratory wells. In conducting exploration and
development activities, the presence of unanticipated pressure or irregularities
in formations, miscalculations or accidents may cause Harken's exploration,
development and production activities to be unsuccessful potentially resulting
in abandoning the particular well. This could result in a total loss of Harken's
investment. In addition, the cost and timing of drilling, completing and
operating wells is often uncertain.
Crude oil, natural gas, condensate, and other oil and gas products generally are
sold to other oil and gas companies, government agencies and other industries.
The availability of ready markets for oil and gas that might be discovered by
Harken and the prices obtained for such oil and gas depend on many factors
beyond Harken's control, including the extent of local production and imports of
oil and gas, the proximity and capacity of pipelines and other transportation
facilities, fluctuating demands for oil and gas, the marketing of competitive
fuels, and the effects of governmental regulation of oil and gas production and
sales. Natural gas associated with economic oil production is often not
economically marketable due to the above demand or transportation limitations
and is often flared at the producing wellsite. Pipeline facilities do not exist
in certain areas of exploration and, therefore, any actual sales of discovered
oil and gas might be delayed for extended periods until such facilities are
constructed.
Harken's oil and gas business is also subject to all of the operating risks
normally associated with the exploration for and production of oil and gas,
including, without limitation, blowouts, cratering, pollution, earthquakes,
labor disruptions and fires, each of which could result in substantial losses to
Harken due to injury or loss of life and damage to or destruction of oil and gas
wells, formations, production facilities or other properties. In accordance with
customary industry practices, Harken maintains insurance coverage limiting
financial loss resulting from certain of these operating hazards. Losses and
liabilities arising from uninsured or underinsured events could reduce revenues
and increase costs to Harken. There can be no assurance that any insurance will
be adequate to cover losses or liabilities. Harken cannot predict the continued
availability of insurance, or its availability at premium levels that justify
its purchase.
HARKEN'S OPERATIONS ARE SUBJECT TO ENVIRONMENTAL LAWS AND REGULATIONS
3
Our operations are subject to stringent foreign, federal, state and local laws
and regulations governing the discharge of materials into the environment or
otherwise relating to environmental protection. These laws and regulations may
require the acquisition of a permit before drilling commences, restrict the
types, quantities and concentrations of various substances that can be released
into the environment, limit or prohibit construction or drilling activities on
certain sensitive lands, and impose substantial liabilities for pollution
resulting from former or current operations. Failure to comply with these laws
and regulations may result in the imposition of administrative, civil and
criminal penalties. Changes in environmental laws and regulations occur
frequently, and any changes that result in more stringent and costly waste
management or cleanup requirements could have a material adverse affect on our
operations, as well as those of the oil and gas industry in general. While we
believe that the Company is in substantial compliance with current environmental
laws and regulations, there is no assurance that this trend will continue in the
future.
The Comprehensive Environmental Response, Compensation and Liability Act,
referred to as CERCLA but also known as "Superfund," and comparable state laws
impose liability without regard to fault or the legality of the original conduct
on certain classes of persons who are considered to be responsible for the
release of a "hazardous substance" into the environment. These persons include
the owner or operator of the disposal site where the release occurred and
companies who arrange for the disposal or transport of the hazardous substances
found at the site. Under CERCLA, such persons may be subject to joint and
several liability for the costs of cleaning up the released hazardous
substances, for damages to natural resources, and for the costs of certain
health studies. The Resource Conservation and Recovery Act, referred to as RCRA,
generally does not regulate most wastes generated by the exploration and
production of oil and gas. However, these wastes may be regulated as solid
waste. Also, ordinary industrial wastes, such as paint wastes, waste solvents,
and laboratory wastes, may be regulated as hazardous waste. The Company owns or
leases, and has in the past owned or leased, properties that have been used for
the exploration and production of oil and gas. In addition, many of these
properties have been operated by third parties whose treatment and release of
hydrocarbons or other wastes was not under the Company's control. These
properties and the wastes disposed thereon may be subject to CERCLA, RCRA, and
analogous state laws. Under such laws, the Company could be required to remove
or remediate previously released wastes or property contamination.
The Oil Pollution Act of 1990, referred to as OPA, pertains to the
prevention of and response to spills or discharges of hazardous substances or
oil into navigable water of the United States. Under OPA, a person owning or
operating a facility or equipment from which there is a discharge or threat of a
discharge of oil into or upon navigable waters or adjoining shorelines is
liable, regardless of fault, as a "responsible party" for removal costs and
damages. Federal law imposes strict, joint and several liability on facility
owners for containment and clean-up costs and certain other damages, including
natural resource damages arising from a spill. The OPA establishes a liability
limit for onshore facilities of $350 million; however, a party cannot take
advantage of this liability limit if the spill is caused by gross negligence or
willful misconduct, resulted from a violation of a federal safety, construction,
or operating regulation, or if a party fails to report a spill or cooperate in
the cleanup. The Federal Water Pollution Control Act, also referred to as the
Clean Water Act, and analogous state laws impose strict controls regarding the
discharge of pollutants, including produced waters and other oil and gas wastes,
into state waters or waters of the United States. The discharge of pollutants
into regulated waters is prohibited, except in accord with the terms of a permit
issued by EPA or the state. Federal regulations under the OPA and the Clean
Water Act also require certain owners and operators of facilities that store or
otherwise handle oil, such as us, to prepare and implement spill prevention,
control and countermeasure plans and spill response plans relating to possible
discharge of oil into surface waters.
Our operations outside of the U.S. are potentially subject to similar laws
and regulations in Costa Rica and Columbia. We believe that while Harken is in
substantial compliance with existing requirements of governmental bodies in
these foreign countries, our ability to conduct continued operations are subject
to satisfying applicable regulatory and permitting controls, any of which may be
susceptible, on a going forward basis, to increased scrutiny, greater complexity
resulting in increased costs, or delays in receiving appropriate authorizations.
THE TRADING PRICE OF HARKEN COMMON STOCK MAY BE SIGNIFICANTLY AFFECTED BY THE
RESULTS OF DRILLING ACTIVITY IN COLOMBIA, COSTA RICA AND PERU
4
Harken believes that the price of its common stock may fluctuate significantly
based upon the success or failure of each well that Harken drills in Colombia,
Costa Rica and Peru. Based in part on the results of such drilling activity in
Colombia and Costa Rica, the market price of Harken's common stock declined
significantly in 1999 and 2000. During the past two years, Harken's common stock
has ranged from a high of $23.75 per share to a low of $2.375 per share.
HARKEN'S OIL AND GAS OPERATIONS IN LESS DEVELOPED OIL AND GAS INDUSTRIES SUCH AS
COLOMBIA, COSTA RICA AND PERU INVOLVE SUBSTANTIAL COSTS AND ARE SUBJECT TO
VARIOUS ECONOMIC RISKS
The oil and gas industries in Colombia, Costa Rica and Peru are not as developed
as the oil and gas industry in the U.S. As a result, Harken's drilling and
development operations in many instances take longer to complete and often cost
more than similar operations in the U.S. The availability of technical
expertise, specific equipment and supplies may be more limited in Colombia,
Costa Rica and Peru than in the U.S. Harken expects that such factors will
continue to subject Harken to economic and operating risks not experienced in
the U.S.
Harken follows the full cost method of accounting for exploration and
development of oil and gas reserves whereby all acquisition, exploration and
development costs are capitalized. Costs related to acquisition, holding and
initial exploration of contracts in countries with no proved reserves are
initially capitalized, including internal costs directly identified with
acquisition, exploration and development activities. If Harken abandons all
exploration efforts in a country where no proved reserves are assigned, all
acquisition and exploration costs associated with the country are expensed.
Harken's assessments of whether its investment within a country are impaired and
whether exploration activities within a country will be abandoned are made from
time to time based on its review and assessment of drilling results, seismic
data and other information it deems relevant. Due to the unpredictable nature of
exploration drilling activities, the amount and timing of impairment expense are
difficult to predict.
IF ESTIMATES OF HARKEN'S OIL AND GAS RESERVE INFORMATION ARE ADJUSTED, HARKEN'S
FINANCIAL CONDITION MAY SUFFER
Harken's proved oil and gas reserve information is based upon criteria mandated
by the Securities and Exchange Commission ("SEC") and represents only estimates.
Harken's actual production, revenues and expenditures with respect to such oil
and gas reserves will likely be different from estimates and the differences may
be material. If estimates of oil and gas reserves are greater than actual
production amounts, or if actual production costs and expenditures are greater
than estimates, Harken's business, financial condition, and results of
operations may be negatively affected.
Harken's reserve estimates of future production volumes are based on underlying
estimates of the accumulation of oil and gas and the economic recoverability of
those volumes. Petroleum engineering is a subjective process of estimating
underground accumulations of oil and gas that cannot be measured in an exact
manner. Estimates of economically recoverable oil and gas reserves and of
future net cash flows necessarily depend upon a number of variable factors and
assumptions.
Because all reserve estimates are to some degree subjective, each of the
following items may prove to differ materially from those assumed in estimating
reserves:
. the quantities of oil and gas that are ultimately recovered;
. the production and operating costs incurred;
5
. the amount and timing of future development expenditures; and
. future oil and gas sales prices.
Furthermore, different reserve engineers may make different estimates of
reserves and cash flows based on the same available data.
The estimated discounted future net cash flows described in Harken's Annual
Report on Form 10-K should not be considered as the current market value of the
estimated oil and gas reserves attributable to Harken's properties from proved
reserves because such estimates are based on prices and costs as of the date of
the estimate, in accordance with SEC requirements, while future prices and costs
may be materially higher or lower.
HARKEN HAS A HISTORY OF LOSSES AND MAY SUFFER LOSSES IN THE FUTURE
Harken has reported losses in each of the last five years including a net loss
of $152,933,000 for the year ended December 31, 2000 which was primarily caused
by the writedown of Harken's Colombian oil properties. Harken has reported
cumulative net losses of approximately $222 million over the last five years.
Harken's ability to generate net income is strongly affected by, among other
factors, the market price of crude oil and natural gas. If the market price of
crude oil and natural gas declines, Harken may report additional losses in the
future. See discussion below of potential additional future writedowns in the
event oil and gas prices decrease.
IF ESTIMATED DISCOUNTED FUTURE NET CASH FLOWS DECREASE, HARKEN MAY BE REQUIRED
TO TAKE ADDITIONAL WRITEDOWNS
Harken must periodically review the carrying value of its oil and gas properties
under applicable full-cost accounting rules. These rules require a writedown of
the carrying value of oil and gas properties if the carrying value exceeds the
applicable estimated discounted future net cash flows from proved oil and gas
reserves. Given the volatility of oil and gas prices, it is reasonably possible
that the estimated discounted future net cash flows could change in the near
term. If oil and gas prices decline in the future, even if only for a short
period of time, it is possible that additional writedowns of oil and gas
properties could occur. Whether Harken will be required to take such a charge
will depend on the prices for oil and gas at the end of any quarter and the
effect of reserve additions or revisions and capital expenditures during such
quarter.
Beginning in December 2000, and through the first half of the first quarter of
2001, Harken drilled the Olivo #2 well in Colombia. Due primarily to the recent
results of the Olivo #2 well, and the corresponding significant reduction in
Harken's proved undeveloped reserves on its Bolivar Association Contract area,
and to a lesser extent due to a reduction in Harken's proved producing reserves
due to recent production information, Harken recognized a non-cash charge in the
amount of approximately $156.4 million as of December 31, 2000. Such amount
represents a writedown of the carrying value of Harken's Colombian evaluated oil
properties.
IF HARKEN FAILS TO COMPLY WITH THE TERMS OF A COLOMBIA ASSOCIATION CONTRACT, THE
COSTA RICA CONTRACT OR THE PERUVIAN TECHNICAL EVALUATION AGREEMENT, IT COULD
LOSE ITS RIGHTS UNDER EACH OF THOSE CONTRACTS
Terms of each of the Association Contracts, the Costa Rica Contract and the
Peruvian Technical Evaluation Agreement commit Harken to perform certain
activities in accordance with a prescribed timetable. Failure by Harken to
perform those activities as required could result in Harken losing its rights
under the particular Contract, which could potentially have a material adverse
effect on Harken's business. As of April 14, 2001, Harken was in compliance
with the requirements of each of the Association Contracts, the Costa Rica
Contract, as amended and/or waived and the Peruvian Technical Evaluation
Agreement.
6
COLOMBIAN ENVIRONMENTAL LAWS COULD DELAY OUR OPERATIONS IN THE FUTURE
Our domestic and foreign operations are subject to stringent and complex
environmental laws and regulations governing the discharge of materials into the
environment or otherwise relating to environmental protection. These laws and
regulations are subject to changes that may result in more restrictive or costly
operations. Failure to comply with applicable environmental laws and
regulations may result in the imposition of administrative, civil and criminal
penalties or injunctive relief. Our foreign oil and gas exploration and
productions operations in Columbia, including well drilling, pipeline
construction, and seismic activities, require specific federal and local
environmental licenses and permits, the acquisition of which in the past have
been subject to extensive delays. We may continue to experience similar delays
in the future. Failure to obtain these licenses and permits in a timely manner
may prevent us from obtaining alternative financing.
HARKEN MAY BE UNABLE TO OBTAIN ADDITIONAL FINANCING FOR ITS MIDDLE AMERICAN
ACTIVITIES, WHICH COULD RESTRICT ITS OPERATIONS
Harken anticipates that full development of its existing and future oil and gas
discoveries in Colombia and Costa Rica may take several years and may require
extensive production and transportation facilities requiring significant
additional capital expenditures. If Harken is unable to timely obtain adequate
funds to finance these investments, it could limit or substantially delay
Harken's ability to develop its oil and gas reserves. In such a case, Harken's
business and results of operations could suffer.
Harken has an obligation with MKJ to contribute an additional $4 million to HCRH
over the next year to fund the initial minimum work program obligations under
the Costa Rica Contract if a joint venture partner is not obtained. If Harken
does not make this additional contribution, its ownership interest in HCRH could
be reduced from 80% to 40% on a sliding scale basis.
Harken is seeking additional joint venture partner participation for its Costa
Rica work program obligations prior to drilling the Moin #2 well. There can be
no assurances that Harken will obtain a joint venture partner. Failure to obtain
such joint venture partner could prevent or delay Harken's ability to develop
its Costa Rica Contract.
Harken cannot predict the ultimate amount of expenditures for its Middle
American operations. Harken anticipates that amounts required to fund its
Middle American activities will be funded from its existing cash balances, asset
sales, stock issuances, production payments, operating cash flows and from joint
venture partners. Harken can not assure you that it will have adequate funds
available to it to fund its Middle American activities.
HARKEN MAY ISSUE ADDITIONAL SHARES OF COMMON STOCK WHICH MAY DILUTE THE VALUE OF
HARKEN COMMON STOCK TO CURRENT STOCKHOLDERS AND MAY ADVERSELY AFFECT THE MARKET
PRICE OF HARKEN'S COMMON STOCK
Harken may be required to issue up to approximately 5.8 million shares of common
stock as a result of its outstanding warrants, stock options, convertible notes
and preferred stock which could become exercised or converted, particularly in
the event of an increase in the market price of Harken common stock. If Harken
issues additional shares, it could result in significant dilution in your
ownership position in Harken. In addition, Harken could elect to issue a
significant number of additional shares of common stock for financing or other
purposes which could have an adverse effect on the market price of the common
stock.
There are currently several registration statements with respect to the common
stock that are or will become effective, pursuant to which certain selling
stockholders of Harken may sell up to an aggregate of 3,822,323 shares of common
stock. If the selling stockholders named in such registration statements sell
all of the shares of common stock registered pursuant to such registration
statements, such sales could cause an adverse effect on the market price of the
common stock.
7
HARKEN'S OPERATIONS IN COLOMBIA, COSTA RICA, PERU AND OTHER FOREIGN COUNTRIES
WILL BE SUBJECT TO POLITICAL, ECONOMIC AND OTHER UNCERTAINTIES
Harken conducts significant operations in Colombia and Costa Rica, and may also
conduct operations in Peru and other foreign countries in the future. At
December 31, 2000, approximately 13% of Harken's proved reserves were related to
Harken's Colombian operations. Operations in foreign countries, particularly in
the oil and gas business, are subject to political, economic and other
uncertainties, including:
. the risk of war, revolution, border disputes, expropriation, renegotiation
or modification of existing contracts, import, export and transportation
regulations and tariffs resulting in loss of revenue, property and
equipment;
. taxation policies, including royalty and tax increases and retroactive tax
claims;
. exchange controls, currency fluctuations and other uncertainties arising
out of foreign government sovereignty over Harken's international
operations;
. laws and policies of the United States affecting foreign trade, taxation
and investment; and
. the possibility of having to be subject to the exclusive jurisdiction of
foreign courts in connection with legal disputes and the possible
inability to subject foreign persons to the jurisdiction of courts in the
United States.
Central and South America and other regions of the world have a history of
political and economic instability. This instability could result in new
governments or the adoption of new policies that might assume a substantially
more hostile attitude toward foreign investment. In an extreme case, such a
change could result in termination of contract rights and expropriation of
foreign-owned assets. These uncertainties could adversely affect Harken's
interests.
GUERRILLA ACTIVITY IN COLOMBIA COULD DISRUPT OR DELAY HARKEN'S OPERATIONS, AND
HARKEN HAS CONCERNS ABOUT SAFEGUARDING ITS OPERATIONS AND PERSONNEL IN COLOMBIA.
From time to time, guerilla activity in Colombia has delayed Harken's projects
there. This guerilla activity has increased over the last few years, causing
delays in the development of Harken's fields in Colombia. Guerilla activity has
also from time to time slowed Harken's ability to put workers in the field, and
has affected Harken's operations by implementing road blockades and similar
actions. In addition, it is possible that guerillas could attempt to disrupt the
flow of Harken's production through pipelines. In addition, Harken's concerns
over safeguarding its operations and personnel in Colombia have increased
dramatically with the recent occurrences of threats of violence throughout the
country. In addition to these security issues, Harken has also become the
subject of media focus in Colombia that may further complicate its security
position in the country.
Harken and the Colombian government have taken steps to maintain security and
favorable relations with the local population. These steps have included the
hiring of security to patrol Harken's facilities, and programs to provide local
communities with health and educational assistance. Harken expects that it will
be required to continue these steps throughout the term of its interest in
Colombia.
Harken's operating plans in Colombia are continuing, subject to the ongoing
monitoring of these security developments. Harken is also currently analyzing
and upgrading its security procedures and has initiated action to expand
security measures for both personnel and field operations. Harken cannot assure
you that these attempts to reduce or prevent guerilla activity will be
successful or that guerilla activity will not disrupt operations in the future.
Harken also cannot assure you that it will be successful in maintaining the
safety of its operations and personnel in Colombia from violence there or that
this violence will not affect its operations in the future. Continued or
heightened security concerns in Colombia could also adversely effect Harken's
interests, which could potentially have a material adverse effect on Harken's
business.
8
IF THE UNITED STATES IMPOSES ECONOMIC OR TRADE SANCTIONS ON COLOMBIA, HARKEN'S
OPERATIONS IN COLOMBIA MAY BE ADVERSELY AFFECTED
Colombia is among several nations whose progress in stemming the production and
transit of illegal drugs is subject to annual certification by the President of
the United States. The President of the United States has announced that
Colombia would be certified. There can be no assurance that, in the future,
Colombia will receive certification or a national interest waiver. The
consequences of the failure to receive certification or a national interest
waiver generally include the following: all bilateral aid, except anti-narcotics
and humanitarian aid, would be suspended; the Export-Import Bank of the United
States and the Overseas Private Investment Corporation would not approve
financing for new projects in Colombia; U.S. representatives at multilateral
lending institutions would be required to vote against all loan requests from
Colombia, although such votes would not constitute vetoes; and the President of
the United States and Congress would retain the right to apply future trade
sanctions. Each of these consequences could result in adverse economic
consequences in Colombia and could further heighten the political and economic
risks associated with Harken's operations in Colombia. Any changes in the
holders of significant government offices could have adverse consequences on
Harken's relationship with the Colombian national oil company and the Colombian
government's ability to control guerrilla activities and could exacerbate the
factors relating to foreign operations discussed above.
If the United States were to impose sanctions on Colombia, it could affect
Harken's ability to obtain the financing it needs in order to develop its
Colombian properties. The imposition of sanctions on Colombia could also cause
Colombia to retaliate against Harken, including by nationalizing Harken's
Colombian assets. Accordingly, imposition of the foregoing economic and trade
sanctions on Colombia could materially affect the performance of Harken's common
stock and its long-term financial results. We can not assure you the United
States will not impose sanctions on Colombia in the future or predict the effect
in Colombia that these sanctions might cause.
HARKEN COULD SUFFER LOSSES FROM EXCHANGE RATE FLUCTUATIONS
Harken accounts for its Colombian and Costa Rican operations using the U.S.
dollar as its functional currency. The costs associated with Harken's
exploration efforts in Colombia and Costa Rica have typically been denominated
in U.S. dollars. Harken expects that a substantial portion of its future
Colombian revenues may be denominated in Colombian pesos. To the extent that
the amount of Harken's revenues denominated in Colombian pesos is greater than
the amount of costs denominated in Colombian pesos, Harken could suffer a loss
if the value of the Colombian peso were to drop relative to the value of the
U.S. dollar, which could have a material adverse effect on Harken's results of
operations.
DRILLING OIL AND GAS WELLS IN COLOMBIA AND COSTA RICA COULD BE HINDERED BY
HURRICANES AND OTHER OPERATING RISKS
Harken's operations in Colombia and Costa Rica are subject to risks from
hurricanes and other natural disasters. Damage caused by hurricanes or other
operating hazards could result in substantial losses to Harken. The occurrence
of such an event that is not fully covered by insurance could have a material
adverse effect on the financial position and results of operations of Harken.
HARKEN MAY ISSUE SHARES OF PREFERRED STOCK WITH GREATER RIGHTS THAN ITS COMMON
STOCK
Harken is permitted under its charter to issue up to ten million shares of
preferred stock. Harken can issue shares of its preferred stock in one or more
series and can set the terms of the preferred stock without seeking any further
approval from its common stockholders. Any preferred stock that is issued by
Harken may rank ahead of its common stock in terms of dividend priority or
liquidation premiums and may have greater voting rights than its common stock.
During the last six months of 2000, Harken issued 158,155 shares of Series G1
Preferred stock in private placement transactions exempt from registration under
the Securities Act of 1933. This preferred stock has rights senior to Harken
common stock with respect to dividends and liquidation. In addition, such
preferred stock may be
9
converted into shares of common stock, which could dilute the value of common
stock to current stockholders and could adversely affect the market price of
Harken's common stock.
FUTURE ACQUISITIONS MAY DILUTE YOUR PERCENTAGE OWNERSHIP IN HARKEN OR REQUIRE
SUBSTANTIAL EXPENDITURES
Harken's strategic plan includes the acquisition of additional reserves,
including through business combination transactions. Harken may not be able to
consummate future acquisitions on favorable terms. Additionally, future
acquisitions may not achieve favorable financial results.
Future acquisitions may involve the issuance of shares of Harken common stock,
which could have a dilutive effect on the current stockholders of Harken.
Furthermore, acquisitions may require substantial financial expenditures that
will need to be financed through cash flow from operations or future debt and
equity offerings by Harken. Harken may not be able to acquire companies or oil
and gas properties using its equity as currency. In the case of cash
acquisitions, Harken may not be able to generate sufficient cash flow from
operations or obtain debt or equity financing sufficient to fund future
acquisitions of reserves.
HARKEN FACES STRONG COMPETITION FROM LARGER OIL AND GAS COMPANIES
The exploration and production business is highly competitive. Many of Harken's
competitors have substantially larger financial resources, staffs and facilities
than Harken. Harken's competitors in Colombia and Costa Rica include such major
oil and gas companies as BP Amoco, Exxon/Mobil, Texaco, Conoco, Shell and Arco.
These major oil and gas companies are often better positioned to obtain the
rights to exploratory acreage that Harken competes for.
GOVERNMENT AGENCIES IN COLOMBIA, COSTA RICA AND PERU CAN INCREASE HARKEN'S COSTS
AND CAN TERMINATE OR SUSPEND OPERATIONS
In Costa Rica and Colombia, the laws governing the oil and gas industry require
Harken to obtain an environmental permit or approval prior to conducting seismic
operations, drilling a well or constructing a pipeline. The process of obtaining
an environmental permit has delayed Harken's operations in the past, and could
do so again in the future. Compliance with these laws and regulations may
increase Harken's costs of operations, as well as further restricting its
activities.
In Costa Rica, due to the country's high attention to the protection of its
ecological areas and environment, Harken's operations may be subject to much
greater control, scrutiny and restrictions than are usually encountered in
international exploration operations. Due to such additional regulations and
requirements in Costa Rica, Harken may likely encounter further delays in its
operations, future challenges to the implementation of its Costa Rica Contract
and significant increases in its projected costs.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
We believe that certain statements contained or incorporated by reference in
this prospectus are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and are considered prospective.
The following statements are or may constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995:
. statements before, after or including the words "may", "will", "could",
"should", "believe", "expect", "future", "potential", "anticipate",
"intend", "plan", "estimate" or "continue" or the negative or other
variations of these words; and
. other statements about matters that are not historical facts.
10
We may be unable to achieve the future results covered by the forward-looking
statements. The statements are subject to risks, uncertainties and other
factors that could cause actual results to differ materially from the future
results that the statements express or imply. See "Risk Factors". Please do
not put undue reliance on these forward-looking statements, which speak only as
of the date of this prospectus.
WHERE YOU CAN GET MORE INFORMATION
Harken files reports, proxy statements, and other information with the SEC. Such
reports, proxy statements and other information concerning Harken can be read
and copied at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. The SEC maintains an Internet site at
http://www.sec.gov that contains reports, proxy statements and other information
regarding issuers that file information electronically, including Harken.
Harken's common stock is listed on the American Stock Exchange. These reports,
proxy statements and other information can also be read and copied at the
offices of the American Stock Exchange at 86 Trinity Place, New York, New York
10006.
The SEC allows Harken to "incorporate by reference" the information it files
with the SEC. This permits Harken to disclose important information to you by
referencing these filed documents. Any information referenced this way is
considered part of this prospectus, and any information filed with the SEC after
the date on the cover of this prospectus will automatically be deemed to update
and supercede this information. Harken incorporates by reference the following
documents which have been filed with the SEC:
(1) Annual Report on Form 10-K for the year ended December 31, 2000, and
(2) The description of the common stock contained in Harken's Registration
Statement on Form 8-A, as amended, including all amendments and reports
filed for the purpose of updating such description; and the description of
Harken's Preferred Stock Purchase Rights as contained in Harken's
Registration Statement on Form 8-A, filed with the Commission on April 7,
1998, including all amendments and reports filed for the purpose of updating
such description.
Harken also incorporates by reference any future filings made with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934, as amended (the
"Exchange Act") until the selling stockholders sell all of the shares of common
stock.
This prospectus is part of a registration statement filed with the SEC. This
prospectus does not contain all the information contained in the registration
statement. The full registration statement can be obtained from the SEC. This
prospectus contains a general description of Harken and the securities being
offered for sale. You should read this prospectus together with the additional
information incorporated by reference.
You can request a copy of any document incorporated by reference in this
prospectus in writing or by phone. Requests for copies should be directed to
Karen Kerr-Johnson, Harken Energy Corporation, 16285 Park Ten Place, Suite 600,
Houston, Texas 77084 (Telephone: (281) 717-1300). Copies of any document
incorporated by reference, other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference into the documents that this
prospectus incorporates, will be provided at no cost to you.
USE OF PROCEEDS
Harken will not receive any part of the proceeds from the sale of shares of
common stock by the selling stockholders.
11
SUBSEQUENT EVENTS
On April 10, 2001 Harken announced that it had diversified its international
operations by signing a Technical Evaluation Agreement (``TEA'') with PeruPetro.
The TEA covers an area of approximately 6,800,000 acres in northeastern Peru.
Harken has the option to convert the TEA to a seven year exploration contract,
with a twenty-two year production period.
Terms of the TEA allow Harken to conduct a study of the area that will
include the reprocessing of seismic data and evaluation of previous well data.
INFORMATION ABOUT THE SELLING SHAREHOLDERS
This prospectus covers the offer and sale of 257,931 shares of common stock
by Crescent International. In March 1998, Harken and Crescent International
entered into a Development Finance Agreement. Under the Development Finance
Agreement, Crescent International initially provided $3 million to Harken in
exchange for the net profits interest in certain Colombian prospects held by
Harken. The Development Finance Agreement gave Crescent International the right
to convert the net profits interest into shares of Harken common stock. In
April 1999, Crescent International elected to convert a portion of its net
profits interest into 131,682 shares of Harken common stock. The Development
Finance Agreement further entitled Crescent International to additional shares
of Harken common stock to the extent Crescent International did not realize its
Invested Amount from the sale of the 131,682 shares of Harken common stock it
received upon conversion. In March 2000, 145,739 shares of Harken common stock
were issued to Crescent International pursuant to this provision of the
Development Finance Agreement. In addition, in March 2000, Crescent
International elected to convert the remaining portion of its net profits
interest into 128,274 shares of Harken common stock. The 257,931 shares covered
by this prospectus are the additional shares to which Crescent International was
entitled because it did not realize its Invested Amount from the sale of the
128,274 shares.
For more information on the specific terms of the Development Finance
Agreement, see "Notes to Consolidated Financial Statements, Note 7 - Development
Finance and Operating Agreements" in Harken's Annual Report on Form 10-K, which
is incorporated by reference in this prospectus.
This prospectus also covers the offer and sale of 263,301 shares of common
stock by Benz Resources, L.L.C. ("Benz"). These shares were issued in April
2001 pursuant to an Incentive Agreement dated December 30, 1999, between Benz
and Harken Gulf Exploration Co., a wholly owned subsidiary of Harken.
Harken has agreed to file a "shelf" registration statement with the SEC
pursuant to Rule 415 under the Securities Act covering the sale of shares of
common stock held by the Selling Shareholders, and to use its reasonable best
efforts to maintain the effectiveness of any such registration statement for no
less than one year from the date of effectiveness of such registration
statement. In addition, Harken has agreed to bear certain expenses of
registration of the shares of common stock under the federal and state
securities laws (currently estimated to be $4,500). Harken has also agreed to
indemnify the Selling Shareholders, or their transferees or assigns, against
liabilities under the Securities Act, or to contribute to payments the Selling
Shareholders may be required to make.
Benz has not had any position, office or other material relationship with
Harken in the last three years. Other than the net profits interest Crescent
International held, Crescent International has not had any position, office or
other material relationship with Harken in the last three years. The chart
below describes the number of shares of common stock owned by the Selling
Shareholders, the number of shares of common stock which may be offered for sale
by the Selling Shareholders, and the number of shares of common stock the
Selling Shareholders will own if all of the shares of common stock held by the
Selling Shareholders are sold. Any or all of the shares listed below may be
offered for sale by the Selling Shareholders from time to time.
12
Percent of
Shares Owned Shares Shares Owned Common Stock
Prior to the Offered After the Owned After the
Selling Stockholder Offering Hereby Owned(1) Offering(1)
- ------------------------------------- ------------- --------- ------------ ----------------
Crescent International S.A. 257,931 257,931 -0- -0-
Benz Resources, L.L.C. 263,301 263,301 -0- -0-
(1) Assumes no other disposition or acquisition of common stock and all shares
of common stock are sold.
PLAN OF DISTRIBUTION
Harken will not receive any proceeds from the sale of common stock owned by
the selling stockholders. It is anticipated that the selling stockholders will
offer the shares of common stock for sale from time to time, directly or through
broker-dealers or underwriters who may act solely as agents or may acquire the
shares of common stock as principals, in all cases as designated by the selling
stockholders. Such underwriters or broker-dealers acting either as principal or
as agent, may receive compensation in the form of usual and customary or
specifically negotiated underwriting discounts, concessions or commissions from
the selling stockholders or the purchasers of the 521,232 shares of common stock
offered in this prospectus for whom they may act as agent.
The net proceeds to the selling stockholders from the sale of common stock
will be the purchase price of the common stock sold less the aggregate agents'
commissions and underwriters' discounts, if any, and other expenses of issuance
and distribution not borne by Harken. The selling stockholders and any dealers
or agents that participate in the distribution of common stock may be deemed to
be "underwriters" within the meaning of the Securities Act.
At any time a particular offer of common stock is made, and if required by
SEC rules and regulations, the specific shares of common stock to be sold, the
purchase price, public offering price, the names of any such agent, dealer or
underwriter and any commission or discount with will be described in an
accompanying prospectus supplement. The prospectus supplement may be in the
form of a post-effective amendment to the Registration Statement of which this
prospectus is a part, and will be filed with the SEC.
The shares of common stock being offered by the selling stockholders will be
sold in one or more transactions, which may include block transactions, on the
American Stock Exchange or on any other market on which the common stock may be
trading, in privately-negotiated transactions, through the writing of options on
the shares of common stock, short sales or any combination thereof. The sale
price to the public may be the market price prevailing at the time of sale, or a
different price negotiated by the selling stockholders. The shares of common
stock may also be sold pursuant to Rule 144. The selling stockholders shall
have the sole and absolute discretion not to accept any purchase offer or make
any sale of shares of common stock if they deem the purchase price to be
unsatisfactory.
The selling stockholders, alternatively, may sell all or any part of the
521,232 shares of common stock offered in this prospectus through an
underwriter. The selling stockholders have not entered into any agreement with
a prospective underwriter and there is no assurance that any such agreement will
be entered into. If the selling stockholders enter into such an agreement, the
relevant details will be set forth in a supplement or revisions to this
prospectus.
The selling stockholders and any other persons participating in the sale or
distribution of the shares of common stock will be subject to applicable
provisions of the Exchange Act and the rules and regulations passed by the SEC,
which may limit the timing of purchases and sales of any of the shares of common
stock by the selling stockholders or any other such person. This may affect the
marketability of the shares of common stock.
13
LEGAL MATTERS
The validity of the shares of common stock will be passed upon for Harken
Energy Corporation by Karen Kerr-Johnson, Assistant General Counsel of Harken.
EXPERTS
The audited consolidated financial statements of Harken Energy Corporation
incorporated by reference into this prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
Harken's oil and gas reserves in Colombia have been reviewed by its
independent reserve engineers, Gaffney, Cline & Associates, Inc., as stated in
their report thereon. Harken's oil and gas reserves in Colombia also have been
reviewed by its independent reserve engineers, Netherland, Sewell & Associates,
Inc., as stated in their report thereon. Harken's disclosures of its oil and gas
reserves in Colombia included in its Form 10-K for the period ending December
31, 2000, have been presented in reliance upon the authority of such firm as
experts in petroleum engineering.
14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses to be paid by Harken in connection with the offering described
in this Registration Statement are estimated as follows:
Commission Registration Fee $ 442.00
Printing and Engraving Expenses 500.00
Accounting Fees and Expenses 2,500.00
Blue Sky Fees and Expenses -0-
1058.00
Miscellaneous
-----------
Total $ 4,500.00
===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the General Corporation Law of the State of Delaware
("Delaware Law"), a Delaware corporation may indemnify its directors, officers,
employees and agents against expenses (including attorneys fees), judgments,
fines and settlements in nonderivative suits, actually and reasonably incurred
by them in connection with the defense of any action, suit or proceeding in
which they or any of them were or are made parties or are threatened to be made
parties by reason of their serving or having served in such capacity. Delaware
law, however, provides that such person must have acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests of
the corporation, and in the case of a criminal action, such person must have had
no reasonable cause to believe his or her conduct was unlawful. Section 145
further provides that in connection with the defense or settlement of any action
by or in the right of the corporation, a Delaware corporation may indemnify its
directors and officers against expenses actually and reasonably incurred by them
if, in connection with the matters in issue, they acted in good faith, in a
manner they reasonably believed to be in or not opposed to the best interests of
the corporation, except that no indemnification may be made with respect to any
claim, issue or matter as to which such person has been adjudged liable for
negligence or misconduct unless the Court of Chancery or the court in which such
action or suit is brought approves such indemnification. Section 145 further
permits a Delaware corporation to grant its directors and officers additional
rights of indemnification through bylaw provisions and otherwise, and to
purchase indemnity insurance on behalf of its directors and officers.
Indemnification is mandatory to the extent a claim, issue or matter has been
successfully defended.
Article Ten of Harken's Certificate of Incorporation and Article VII of
Harken's bylaws provide, in general, that Harken shall indemnify its directors
and officers under certain of the circumstances defined in Section 145. Harken
has entered into agreements with each member of its Board of Directors pursuant
to which it will advance to each director costs of litigation in accordance with
the indemnification provisions of Harken's Certificate of Incorporation and
bylaws.
Item 16. Exhibits.
4.1 - Form of certificate representing shares of Harken common stock,
par value $.01 per share (filed as Exhibit 1 to Harken's
Registration Statement on Form 8-A, File No. 0-9207, and
incorporated by reference herein).
4.2 - Certificate of Designations, Powers, Preferences and Rights of
Series A Cumulative Convertible Preferred Stock, $1.00 par
value, of Harken Energy Corporation (filed as Exhibit 4.1 to
Harken's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989, File No. 0-9207, and incorporated by
reference herein).
4.3 - Certificate of Designations, Powers, Preferences and Rights of
Series B Cumulative Convertible Preferred Stock, $1.00 par
value, of Harken Energy Corporation (filed as Exhibit 4.2 to
Harken's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989, File No. 0-9207, and incorporated by
reference herein).
4.4 - Certificate of the Designations, Powers, Preferences and Rights
of Series C Cumulative Convertible Preferred Stock, $1.00 par
value of Harken Energy Corporation (filed as Exhibit 4.3 to
Harken's Annual Report on Form 10-K for fiscal year ended
December 31, 1989, File No. 0-9207, and incorporated by
reference herein).
4.5 - Certificate of the Designations of Series D Preferred Stock,
$1.00 par value of Harken Energy Corporation (filed as Exhibit
4.3 to Harken's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1995, File No. 0-9207, and
incorporated by reference herein).
4.6 - Rights Agreement, dated as of April 6, 1999, by and between
Harken Energy Corporation and ChaseMellon Shareholder Services
L.L.C., as Rights Agent (filed as Exhibit 4 to Harken's Current
Report on Form 8-K dated April 7, 1999, File No. 0-9207, and
incorporated by reference herein).
4.7 - Certificate of Designations of Series E Junior Participating
Preferred Stock (filed as Exhibit B to Exhibit 4 to Harken's
Current Report on Form 8-K dated April 7, 1999, File No. 0-9207,
and incorporated by reference herein).
4.8 - Certificate of Designations, Preferences and Rights of Series G1
Convertible Preferred Stock.
5.1* - Opinion of Karen Kerr-Johnson.
23.1* - Consent of Arthur Andersen LLP.
23.2* - Consent of Gaffney, Cline & Associates, Inc.
23.3* - Consent of Netherland, Sewell & Associates, Inc.
23.4* - Consent of Karen Kerr-Johnson (included in opinion filed as
Exhibit 5.1).
24.1* - Powers of Attorney.
- -----------
* Filed herewith.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
II-2
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(d) The undersigned Registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on April 16, 2001.
HARKEN ENERGY CORPORATION
*
--------------------------------------------------
Mikel D. Faulkner, Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature Title Date
* Chairman of the Board and Chief April 16, 2001
- -------------------------------------------- Executive Officer (Principal
Mikel D. Faulkner Executive Officer)
* President, Chief Operating Officer April 16, 2001
- -------------------------------------------- and Director
Bruce N. Huff
* Vice Chairman and Director April 16, 2001
- --------------------------------------------
Stephen C. Voss
Director April , 2001
- --------------------------------------------
J. William Petty
* Director April 16, 2001
- --------------------------------------------
Michael M. Ameen, Jr.
* Director April 16, 2001
- --------------------------------------------
Hobart A. Smith
* Director April 16, 2001
- --------------------------------------------
Gary B. Wood
* Director April 16, 2001
- --------------------------------------------
Larry Akers
Director April , 2001
- --------------------------------------------
Robert Gerrity
*Karen Kerr-Johnson, by signing her name hereto, does hereby sign this
Registration Statement on behalf of Harken Energy Corporation and each of the
above-named officers and directors of such Company pursuant to powers of
attorney, executed on behalf of Harken and each officer and director.
/s/ Karen Kerr-Johnson
- ------------------------------------
Karen Kerr-Johnson, Attorney-in-Fact
II-4
INDEX TO EXHIBITS
Sequentially
Exhibit No. Exhibit Numbered Page
-------------- --------------------------------------------------------- -----------------
4.1 Form of certificate representing shares of Harkencommon
stock, par value $.01 per share (filed as Exhibit 1 to
Harken's Registration Statement on Form 8-A, File
No. 0-9207, and incorporated by reference herein).
4.2 Certificate of Designations, Powers, Preferences and
Rights of Series A Cumulative Convertible Preferred
Stock, $1.00 par value, of Harken Energy Corporation
(filed as Exhibit 4.1 to Harken's Annual Report on
Form 10-K for the fiscal year ended December 31,
1989, File No. 0-9207, and incorporated by reference
herein).
4.3 Certificate of Designations, Powers, Preferences and
Rights of Series B Cumulative Convertible Preferred
Stock, $1.00 par value, of Harken Energy Corporation
(filed as Exhibit 4.2 to Harken's Annual Report on
Form 10-K for the fiscal year ended December 31,
1989, File No. 0-9207, and incorporated by reference
herein).
4.4 Certificate of the Designations, Powers, Preferences
and Rights of Series C Cumulative Convertible
Preferred Stock, $1.00 par value of Harken Energy
Corporation (filed as Exhibit 4.3 to Harken's Annual
Report on Form 10-K for fiscal year ended December
31, 1989, File No. 0-9207, and incorporated by
reference herein).
4.5 Certificate of the Designations of Series D
Preferred Stock, $1.00 par value of Harken Energy
Corporation (filed as Exhibit 4.3 to Harken's
Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1995, File No. 0-9207, and
incorporated by reference herein).
4.6 Rights Agreement, dated as of April 6, 1999, by and
between Harken Energy Corporation and ChaseMellon
Shareholder Services L.L.C., as Rights Agent (filed
as Exhibit 4 to Harken's Current Report on Form 8-K
dated April 7, 1999, File No. 0-9207, and
incorporated by reference herein).
4.7 Certificate of Designations of Series E Junior
Participating Preferred Stock (filed as Exhibit B to
Exhibit 4 to Harken's Current Report on Form 8-K
dated April 7, 1999, File No. 0-9207, and
incorporated by reference herein).
4.8 Certificate of Designations, Preferences and Rights
of Series G1 Convertible Preferred Stock.
*5.1 Opinion of Karen Kerr-Johnson.
Sequentially
Exhibit No. Exhibit Numbered Page
-------------- --------------------------------------------------------- -----------------
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Gaffney, Cline & Associates, Inc.
*23.3 Consent of Netherland, Sewell & Associates, Inc.
*23.4 Consent of Karen Kerr-Johnson (included in opinion
filed as Exhibit 5.1).
*24.1 Powers of Attorney.
* Filed herewith.