- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _____
Commission file number 0-9207
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 No.)
16285 PARK TEN PLACE, SUITE 600 77084
HOUSTON, TEXAS (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (281) 717-1300
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
----- -------
The number of shares of Common Stock, par value $0.01 per share, outstanding
as of May 1, 2001 was 18,130,598.
- --------------------------------------------------------------------------------
HARKEN ENERGY CORPORATION
INDEX TO QUARTERLY REPORT
MARCH 31, 2001
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Consolidated Condensed Balance Sheets......................... 4
Consolidated Condensed Statements of Operations............... 5
Consolidated Condensed Statement of Stockholders' Equity...... 6
Consolidated Condensed Statements of Cash Flows............... 7
Notes to Consolidated Condensed Financial Statements.......... 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 15
PART II. OTHER INFORMATION................................................. 21
SIGNATURES ............................................................... 24
2
PART I - FINANCIAL INFORMATION
3
ITEM 1. CONDENSED FINANCIAL STATEMENTS
HARKEN ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
December 31, March 31,
2000 2001
--------------- ---------------
ASSETS
------
Current Assets:
Cash and temporary investments $ 20,673,000 $ 17,305,000
Accounts receivable, net 7,160,000 6,059,000
Related party notes receivable 169,000 169,000
Prepaid expenses and other current assets 1,142,000 1,017,000
--------------- ---------------
Total Current Assets 29,144,000 24,550,000
Property and Equipment, net 110,961,000 117,562,000
Other Assets, net 5,242,000 4,935,000
--------------- ---------------
$ 145,347,000 $ 147,047,000
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Trade payables $ 3,106,000 $ 5,300,000
Accrued liabilities and other 8,819,000 10,924,000
Revenues and royalties payable 1,952,000 2,154,000
--------------- ---------------
Total Current Liabilities 13,877,000 18,378,000
Convertible Notes Payable 69,940,000 69,760,000
Bank Credit Facilities 9,937,000 9,937,000
Other Long-Term Obligations 4,917,000 5,620,000
Commitments and Contingencies (Note 9)
Stockholders' Equity:
Series G1 Preferred Stock, $1.00 par value; $100 liquidation
value; 240,000 shares authorized; 158,155 shares issued 158,000 158,000
Common stock, $0.01 par value; 225,000,000 shares authorized;
17,699,110 and 17,957,041 shares issued, respectively 177,000 180,000
Additional paid-in capital 371,546,000 371,682,000
Accumulated deficit (324,886,000) (326,614,000)
Accumulated other comprehensive income 134,000 (1,601,000)
Treasury stock, at cost, 89,750 shares held (453,000) (453,000)
--------------- ---------------
Total Stockholders' Equity 46,676,000 43,352,000
--------------- ---------------
$ 145,347,000 $ 147,047,000
=============== ===============
The accompanying Notes to Consolidated Condensed Financial Statements
are an integral part of these Statements.
4
HARKEN ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
----------------------------------
2000 2001
--------------- ---------------
Revenues:
Oil and gas operations $ 9,884,000 $ 8,915,000
Interest and other income 388,000 277,000
--------------- ---------------
10,272,000 9,192,000
--------------- ---------------
Costs and Expenses:
Oil and gas operating expenses 3,273,000 3,254,000
General and administrative expenses, net 2,734,000 2,480,000
Depreciation and amortization 2,921,000 3,249,000
Interest expense and other, net 1,443,000 1,712,000
Charge for European Notes conversion 2,068,000 -
--------------- ---------------
12,439,000 10,695,000
--------------- ---------------
Loss before income taxes (2,167,000) (1,503,000)
Income tax expense 15,000 15,000
--------------- ---------------
Loss before extraordinary items (2,182,000) (1,518,000)
Extraordinary item-charge for reduction of
unamortized issuance costs (7,000) -
Extraordinary item-gain on repurchase of
European Notes - 106,000
--------------- ---------------
Net loss $ (2,189,000) $ (1,412,000)
=============== ===============
Preferred stock dividends - (316,000)
--------------- ---------------
Net loss attributed to common stock $ (2,189,000) $ (1,728,000)
=============== ===============
Basic and diluted loss per common share:
Loss per common share before extraordinary items $ (0.14) $ (0.10)
Extraordinary item-charge for reduction of unamortized
issuance costs (0.00) -
Extraordinary item-gain on repurchase of
European Notes - 0.00
--------------- ---------------
Loss per common share $ (0.14) $ (0.10)
=============== ===============
Weighted average common shares outstanding 15,718,721 17,855,827
=============== ===============
The accompanying Notes to Consolidated Condensed Financial Statements are
an integral part of these Statements.
5
HARKEN ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Accumulated
Additional Other
Preferred Common Paid-In Treasury Accumulated Comprehensive
Stock Stock Capital Stock Deficit Income (Loss) Total
------------------------------------------------------------------------------------------
Balance, December 31, 2000 $ 158,000 $ 177,000 $ 371,546,000 $ (453,000) $ (324,886,000) $ 134,000 $46,676,000
Issuance of common stock, net - 3,000 136,000 - - - 139,000
Preferred stock dividends - - - - (316,000) - (316,000)
Comprehensive income:
Cumulative effect of change in
accounting principle - - - - - (3,025,000)
Net change in derivative fair value - - - - - 280,000
Reclassification of derivative fair
value into earnings - - - - - 1,010,000
Net loss - - - - (1,412,000) -
Total comprehensive income (loss) (3,147,000)
-----------------------------------------------------------------------------------------
Balance, March 31, 2001 $ 158,000 $ 180,000 $ 371,682,000 $ (453,000) $ (326,614,000) $ (1,601,000) $43,352,000
=========================================================================================
The accompanying Notes to Consolidated Condensed Financial Statements are
an integral part of these Statements.
6
HARKEN ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
------------------------------------
2000 2001
--------------- ---------------
Cash flows from operating activities:
Net loss $ (2,189,000) $ (1,412,000)
Adjustment to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 2,921,000 3,249,000
Amortization of issuance costs 281,000 679,000
Extraordinary items 7,000 (106,000)
Charge for European Note conversion 2,068,000 -
Change in assets and liabilities:
(Increase) decrease in accounts receivable (748,000) 1,101,000
Increase (decrease) in trade payables and other (112,000) 326,000
--------------- ---------------
Net cash provided by (used in) operating activities 2,228,000 3,837,000
--------------- ---------------
Cash flows from investing activities:
Proceeds from sales of assets - 1,815,000
Capital expenditures, net (6,400,000) (9,020,000)
--------------- ---------------
Net cash used in investing activities (6,400,000) (7,205,000)
--------------- ---------------
Cash flows from financing activities:
Repayments of long-term debt (425,000) (140,000)
Collection of note receivable - 140,000
--------------- ---------------
Net cash used in financing activities (425,000) -
--------------- ---------------
Net decrease in cash and temporary investments (4,597,000) (3,368,000)
Cash and temporary investments at beginning of period 25,612,000 20,673,000
--------------- ---------------
Cash and temporary investments at end of period $ 21,015,000 $ 17,305,000
=============== ===============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 446,000 $ 220,000
Income taxes - -
The accompanying Notes to Consolidated Condensed Financial Statements
are an integral part of these Statements.
7
HARKEN ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2000 AND 2001
(Unaudited)
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements of
Harken Energy Corporation ("Harken") have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission ("SEC"). Certain
information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to these rules and regulations, although
Harken believes that the disclosures made are adequate to make the information
presented not misleading. In the opinion of Harken, these financial statements
contain all adjustments necessary to present fairly its financial position as of
December 31, 2000 and March 31, 2001 and the results of its operations and
changes in its cash flows for all periods presented as of March 31, 2000 and
2001. All such adjustments represent normal recurring items. These condensed
financial statements should be read in conjunction with the financial statements
and the notes thereto included in Harken's Annual Report on Form 10-K for the
year ended December 31, 2000. Certain prior year amounts have been reclassified
to conform with the 2001 presentation.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reported
period. Actual results could differ from these estimates.
The results of operations for the three month period ended March 31, 2001
are not necessarily indicative of the results to be expected for the full year.
(2) ACQUISITIONS AND DISPOSITIONS
Acquisition of Benz Prospects -- On December 30, 1999, pursuant to a
Purchase and Sale Agreement and other related agreements, Harken, along with
Harken Gulf Exploration Company, a wholly-owned subsidiary, purchased oil and
gas leases covering nine exploration prospect areas (the "Benz Prospects")
covering approximately 51,000 net acres plus certain other assets from Benz
Energy, Incorporated ("Benz"). In exchange for the prospects, Harken issued 5%
subordinated notes (the "Benz Convertible Notes") with a face value of $12
million, which are convertible into Harken common stock at a conversion price of
$65.00 per share and originally were to mature on May 26, 2003.
Benz retained a 20% reversionary interest, subject to the Benz Prospects
achieving payout as defined in the Purchase and Sale Agreement. Also, pursuant
to the agreements, a former officer of Benz shall earn additional purchase price
consideration based on 20% of the project reserve value, as defined, as of
December 31, 2000, 2001 and 2002 less total project costs, as defined, related
to the Benz Prospects. Such purchase price consideration percentage shall
increase to 40% in the event Benz merges into or is otherwise acquired by
Harken. Pursuant to the agreement, in April 2001 Harken issued 263,301 shares of
Harken
8
common stock relating to this additional purchase price consideration based on
the reserve value of the Benz Prospects as of December 31, 2000.
Sale of Certain Non-Operated Interests - During the first quarter of 2001,
Harken sold additional interests in 12 oil and gas properties located in Texas
and Louisiana for approximately $1,415,000 cash. Subsequent to March 31, 2001,
and through May 14, 2001, Harken has sold additional interests in 57 oil and gas
properties located primarily in Texas, New Mexico and Arkansas for approximately
$5,912,000 cash.
(3) PROPERTY AND EQUIPMENT
A summary of property and equipment follows:
December 31, March 31,
2000 2001
------------- -------------
Unevaluated oil and gas properties:
Unevaluated Colombian properties $ 588,000 $ -
Unevaluated Costa Rican properties 7,159,000 7,520,000
Unevaluated domestic properties 9,919,000 9,941,000
Evaluated oil and gas properties:
Evaluated Colombian properties 173,358,000 181,797,000
Evaluated domestic properties 148,487,000 149,387,000
Facilities, gas plants and other property 22,048,000 22,763,000
Less accumulated depreciation and
amortization (250,598,000) (253,846,000)
------------- -------------
$ 110,961,000 $ 117,562,000
============= =============
(4) MIDDLE AMERICAN OPERATIONS
Colombia Operations -- Harken's Colombian operations are conducted through
Harken de Colombia, Ltd., a wholly-owned subsidiary of Harken. Subsequent to
March 31, 2001, and following the evaluation of the results of recent 3-D
seismic, Harken has declined the extension of the Los Olmos Contract into a
third contract year, and has relinquished the Los Olmos Contract acreage back to
Ecopetrol.
Terms of each of the Association Contracts commit Harken to perform certain
activities in accordance with a prescribed timetable. As of May 14, 2001, Harken
was in compliance with the requirements of each of the Association Contracts.
Costa Rica Operations -- Harken, through Harken Costa Rica Holdings LLC
("HCRH", a Nevada limited liability corporation subsidiary) owns an interest in
an Exploration and Production concession contract with the Republic of Costa
Rica ("Costa Rica Contract"). At March 31, 2001, Harken owned 80% of
9
the stock of HCRH, with an affiliate of MKJ Xploration, Inc. ("MKJ") owning the
remaining 20% of the stock of HCRH. Pursuant to the agreement between Harken and
MKJ, up to $4 million of additional funds is to be committed by Harken during
2001 to fund the initial minimum work program obligations under the Costa Rica
Contract. Harken is seeking additional joint venture partner participation for
these work program obligations and to fund the initial well to be drilled.
Peru Operations -- In April 2001, Harken, through a wholly-owned
subsidiary, signed a Technical Evaluation Agreement ("TEA") with PeruPetro, the
national oil company of Peru. The TEA covers an area of approximately 6.8
million gross acres in northeastern Peru. Under the terms of the TEA, 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.
(5) BANK CREDIT FACILITY OBLIGATIONS
A summary of long-term bank obligations follows:
December 31, March 31,
2000 2001
--------------- ------------
Subsidiary notes payable to bank (A) $ 9,937,000 $ 9,937,000
Subsidiary project finance facility (B) - -
--------------- ------------
9,937,000 9,937,000
Less: Current portion - -
-------------- ------------
$ 9,937,000 $ 9,937,000
=============== ============
(A) Certain Harken subsidiaries (the "Borrowers") entered into a three
year loan facility with Bank One Texas, N.A. ("Bank One") which is
secured by certain of Harken's domestic oil and gas properties and a
guarantee from Harken. The Bank One facility provides borrowings
limited by a borrowing base (as defined by the Bank One facility)
which was approximately $15,000,000 as of March 31, 2001, and
approximately $19,000,000 as of May 14, 2001. Such borrowing base,
which is net of outstanding letters of credit, is redetermined by Bank
One on May 1 and October 1 of each year in accordance with the
facility agreement. The Bank One facility provides for interest based
on LIBOR plus a margin of 2.350% (7.43% as of March 31, 2001), payable
at the underlying LIBOR maturities or lender's prime rate, and
provides for a commitment fee of 0.375% on the unused amount. At
March 31, 2001 Harken has $9,937,000 outstanding pursuant to the
facility.
The Bank One facility requires the Borrowers, as well as Harken, to
maintain certain financial covenant ratios and requirements. Harken
and the Borrowers are in compliance with all requirements under the
Bank One facility, as amended, as of March 31, 2001. Such financial
covenant ratios and requirements for the Borrowers are effective
beginning June 30, 2001 and include a current ratio, as defined, of
not less than 1.0 to 1.0, a total liabilities to net capital
investment ratio, as defined, of not more than 1.15 to 1.0 and a debt
service coverage ratio, as defined, of not less than 1.5 to 1.0.
Required financial covenants for Harken include a ratio of total
10
liabilities to net worth, as defined, of not more than 0.6 to 1.0, and
a debt service coverage ratio, as defined, of not less than 1.25 to
1.0.
(B) Effective September 1, 1999, Harken de Colombia, Ltd. entered into a
project finance loan agreement with the International Finance
Corporation ("IFC") to be utilized in the development of the Bolivar
Association Contract block in Colombia ("the Project"). As of March
31, 2001, no borrowings have been drawn down by Harken de Colombia,
Ltd. under the facility.
Subsequent to March 31, 2001, Harken de Colombia, Ltd and IFC agreed
to terminate the project finance loan agreement in light of recent
drilling and production results on the Bolivar Association Contract
block and in light of recent security concerns in Colombia.
(6) CONVERTIBLE NOTES PAYABLE
A summary of convertible notes payable is as follows:
December 31, March 31,
2000 2001
-------------- --------------
5% European Notes $ 59,810,000 $ 59,560,000
Benz Convertible Notes 10,130,000 10,200,000
-------------- --------------
69,940,000 69,760,000
Less: Current portion - -
-------------- --------------
$ 69,940,000 $ 69,760,000
============== ==============
5% European Notes -- On May 26, 1998, Harken issued to qualified purchasers
a total of $85 million in 5% Senior Convertible Notes (the "5% European Notes")
which mature on May 26, 2003. Interest incurred on these notes is payable semi-
annually in May and November of each year to maturity or until the 5% European
Notes are converted.
During the first quarter of 2001, Harken repurchased 5% European Notes in
the face amount of $250,000 from certain holders in exchange for cash of
approximately $140,000 plus transaction expenses. Harken has reflected an
extraordinary item gain from the cash purchase of outstanding 5% European Notes
in the accompanying Consolidated Condensed Statements of Operations.
(7) HEDGING ACTIVITIES
Harken holds certain commodity derivative instruments which are effective
in mitigating commodity price risk associated with a portion of its future
monthly crude oil and natural gas production and related cash flows. Harken's
oil and gas operating revenues and cash flows are highly dependent upon
commodity product prices, which are volatile and cannot be accurately predicted.
Harken's objective for holding these commodity derivatives is to protect the
operating revenues and cash flows related to a portion of its future oil
11
and gas sales from the risk of significant declines in commodity prices.
As of March 31, 2001, Harken, through a wholly-owned subsidiary, held
natural gas price swaps resulting in the subsidiary receiving fixed prices of
approximately $2.20 per MMBTU covering a total of 675,000 MMBTUs over the
remaining life of the swaps, which terminate in December 2001. Upon the January
1, 2001 adoption of Statement of Financial Accounting Standards ("SFAS") No.
133, Harken reflected an increase in its accrued liabilities of approximately
$3,025,000 in order to fully record the fair value of these natural gas swaps.
As such derivatives qualify as cash flow hedges under SFAS No. 133, the
offsetting impact upon adoption was a charge to Other Comprehensive Income
within Harken's stockholders' equity. Such natural gas swaps are reflected in
accrued liabilities at March 31, 2001 with a remaining market value of
approximately $1,972,000. In addition, in January 2001, Harken purchased a put
option for crude oil with a fixed price of $25 per barrel. As of March 31, 2001,
such put option covered a total of 24,000 barrels over the remaining life of the
option, which expires in June 2001, and had no remaining market value.
Each of the above derivatives have been designated as cash flow hedges of
the exposure from the variability of cash flows from future specified production
from certain of Harken's domestic property operations. Gains and losses from
commodity derivative instruments are reclassified into earnings when the
associated hedged production occurs. Harken holds no derivative instruments
which are designated as either fair value hedges or foreign currency hedges.
Settlements of oil and gas commodity derivatives are based on the difference
between fixed swap or option prices and the New York Mercantile Exchange closing
prices for each month during the life of the contracts. Harken monitors its
crude oil and gas production prices compared to New York Mercantile Exchange
prices to assure its commodity derivatives are effective hedges in mitigating
its commodity price risk.
Risk management policies established by Harken management limit Harken's
derivative instrument activities to those derivative instruments which are
effective in mitigating certain operating risks, including commodity price risk.
In addition to other restrictions, the extent and terms of any derivative
instruments are required to be reviewed and approved by executive management of
Harken. With the August 19, 1999 merger with XPLOR Energy, Inc. ("XPLOR"),
Harken assumed the above mentioned natural gas swap contract currently held by
XPLOR.
(8) SEGMENT INFORMATION
Harken's accounting policies for each of its operating segments are the
same as those for its consolidated financial statements. There are no
intersegment sales or transfers. Revenues and expenses not directly
identifiable with either segment, such as certain general and administrative
expenses, are allocated by Harken based on various internal and external
criteria including an assessment of the relative benefit to each segment. During
the periods presented below, none of Harken's Middle American segment operating
revenues related to Costa Rica or Peru.
12
Harken's financial information for each of its operating segments is as
follows for the periods ended March 31, 2000 and 2001:
NORTH MIDDLE
AMERICA AMERICA TOTAL
----------------------- ------------------- ---------------------
FOR THE THREE MONTHS ENDED
MARCH 31, 2000:
Operating revenues $ 7,155,000 $ 2,729,000 $ 9,884,000
Interest and other income 150,000 238,000 388,000
Depreciation and amortization 1,991,000 930,000 2,921,000
Interest expense and other, net 815,000 628,000 1,443,000
Income tax expense 15,000 - 15,000
Segment loss before extraordinary
items (645,000) (1,537,000) (2,182,000)
Capital expenditures 2,507,000 3,256,000 5,763,000
Total assets at end of period 100,601,000 196,675,000 297,276,000
NORTH MIDDLE
AMERICA AMERICA TOTAL
----------------------- ------------------- ---------------------
FOR THE THREE MONTHS ENDED
MARCH 31, 2001:
Operating revenues $ 7,008,000 $ 1,907,000 $ 8,915,000
Interest and other income 119,000 158,000 277,000
Depreciation and amortization 1,819,000 1,430,000 3,249,000
Interest expense and other, net 876,000 836,000 1,712,000
Income tax expense 15,000 - 15,000
Segment income (loss) before
extraordinary items 766,000 (2,284,000) (1,518,000)
Capital expenditures 2,737,000 8,212,000 10,949,000
Total assets at end of period 99,434,000 47,613,000 147,047,000
(9) COMMITMENTS AND CONTINGENCIES
In September 1997, Harken Exploration Company, a wholly-owned subsidiary of
Harken, was served with a lawsuit filed in U.S. District Court for the Northern
District of Texas, Amarillo Division, styled D. E. Rice and Karen Rice, as
Trustees for the Rice Family Living Trust ("Rice") vs. Harken Exploration
Company. In the lawsuit, Rice alleges damages resulting from Harken Exploration
Company's alleged spills on Rice's property and has claimed that the Oil
Pollution Act ("OPA") should be applied in this circumstance. Harken believes
that this position as well as the lawsuit in total is without merit. In October
1999, the trial court granted Harken's Motion for Summary Judgment that the OPA
did not apply and dismissed the Rice claim under it. Rice appealed the trial
court's summary judgment to the U.S. Fifth Circuit Court of Appeals. In April
2001, the Fifth Circuit Court of Appeals issued its opinion affirming the
13
trial court's summary judgment in Harken's favor. In Harken management's
opinion, the results of any further appeal will not have a material adverse
effect on Harken's financial position.
Search Acquisition Corp. ("Search Acquisition"), a wholly-owned subsidiary
of Harken, is a defendant in a lawsuit filed by Petrochemical Corporation of
America and Lorken Investments Corporation (together, "Petrochemical"). This
lawsuit arises out of Petrochemical's attempt to enforce a judgment of joint and
several liability entered in 1993 against a group of twenty limited partnerships
known as the "Odyssey limited partnerships." Petrochemical claims that Search
Exploration, Inc. is liable for payment of the judgment as the successor-in-
interest to eight Odyssey limited partnerships. Search Acquisition was the
surviving corporation in the 1995 merger with Search Exploration, Inc. On
February 28, 1996, the court granted Search Acquisition's motion for summary
judgment. On July 3, 1998, the Fifth District Court of Appeals for the State of
Texas reversed the trial court's summary judgment and remanded the case to the
trial court. It is estimated that this trial will take place in the second
quarter of 2001. Although the ultimate outcome of this litigation is uncertain,
Harken believes that any liability to Harken as a result of this litigation will
not have a material adverse effect on Harken's financial condition.
420 Energy Investment, Inc. and ERI Investments, Inc. (collectively "420
Energy") filed a lawsuit against XPLOR Energy, Inc., ("XPLOR") a wholly-owned
subsidiary of Harken, on December 21, 1999 in the New Castle County Court of
Chancery of the State of Delaware. 420 Energy alleges that they are entitled to
appraisal and payment of the fair value of their common stock in XPLOR as of the
date XPLOR merged with Harken. Harken has relied on an indemnity provision in
the XPLOR merger agreement to tender the costs of defense in this matter to a
third party. Although the outcome of this litigation is uncertain, Harken
believes that any liability to Harken as a result of this litigation will not
have a material adverse effect on Harken's financial condition.
Harken has accrued approximately $6,627,000 at March 31, 2001 relating to
certain other operational or regulatory liabilities related to Harken's domestic
operations. Harken and its subsidiaries currently are involved in various
lawsuits and other contingencies, which in management's opinion, will not result
in significant loss exposure to Harken.
14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
Certain statements included in the accompanying condensed financial
statements and in the following discussion and analysis of financial condition
and results of operations, including statements of Harken management's current
expectations, intentions, plans and beliefs, and statements containing the words
"believes", "anticipates", "estimates", "expects", or "may" are forward-looking
statements, as defined in Section 21D of the Securities Exchange Act of 1934.
Such forward-looking statements involve known and unknown risk, uncertainties
and other factors which may cause the actual results, performance, timing or
achievements of Harken to be materially different from any results, performance,
timing or achievements expressed or implied by such forward-looking statements.
Such factors include, among others, the risks described in Harken's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000 filed with the
Securities and Exchange Commission.
OVERVIEW
Harken reported a net loss for the three months ended March 31, 2001 of
$1,412,000 compared to a net loss of $2,189,000 for the prior year period due
primarily to a $2,068,000 charge to earnings during the prior year period
related to the exchange of European Notes for shares of Harken common stock.
Harken worldwide oil and gas revenues have decreased 10% during the first
quarter of 2001 compared to the prior year period despite increased prices for
natural gas due to reduced oil revenues as a result of domestic property sales
and declines in Colombian oil production. Gross profit before depreciation and
amortization, general and administrative and interest expenses totaled
approximately $5.7 million during the three months ended March 31, 2001 compared
to approximately $6.6 million for the prior year period.
Three Months Ended
March 31,
-------------------------------------
2000 2001
-------------- ---------------
(unaudited)
OPERATING REVENUES
Domestic Exploration and Production Operations
Oil sales revenues $ 3,968,000 $ 1,456,000
Oil volumes in barrels 143,000 54,000
Oil price per barrel $ 27.75 $ 26.96
Gas sales revenues $ 2,991,000 $ 5,552,000
Gas volumes in mcf 1,124,000 969,000
Gas price per mcf $ 2.66 $ 5.73
Gas plant revenues $ 196,000 $ -
Colombian Exploration and Production Operations
Oil sales revenues $ 2,729,000 $ 1,907,000
Oil volumes in barrels 124,000 94,000
Oil price per barrel $ 22.01 $ 20.29
15
Three Months Ended
March 31,
-------------------------------------
2000 2001
-------------- ---------------
(unaudited)
OTHER REVENUES
Interest income $ 382,000 $ 245,000
Other income $ 6,000 $ 32,000
RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected Harken's earnings and balance sheet
during the periods included in the accompanying consolidated financial
statements.
For the quarter ended March 31, 2001 compared with the corresponding prior
period.
NORTH AMERICAN OPERATIONS
Domestic gross oil and gas revenues during the first quarter of 2001 relate
primarily to the operations in the onshore and offshore areas of the Texas and
Louisiana Gulf Coast, the Western and Panhandle regions of Texas, the Magnolia
region of Arkansas and the Carlsbad region of New Mexico.
Domestic oil revenues decreased 63% to $1,456,000 during the first quarter
of 2001 compared to $3,968,000 during the first quarter of 2000 due to the
December 2000 sale of Harken Southwest Corporation, which operated Harken's Four
Corners area production. In addition, Harken's Gulf Coast oil production was
reduced by temporary operational curtailments during the first quarter of 2001
at Harken's Main Pass area offshore Louisiana. Overall, domestic oil production
volumes decreased 62% during the first quarter of 2001 compared to the prior
year period.
Domestic gas revenues increased 86% to $5,552,000 for the three months
ended March 31, 2001 compared to $2,991,000 for the prior year period due
primarily to the increase in average gas prices received during the first
quarter of 2001, as Harken received an overall average price of $5.73 per mcf of
gas during the first quarter of 2001 compared to $2.66 per mcf received during
the first quarter of 2000. Such increases in natural gas prices offset an
overall decrease in gas production volumes, compared to the prior year period,
due primarily to normal production declines and due to the sale of Harken
Southwest Corporation.
Gas plant revenues during the first quarter of 2000 were derived through
Harken Southwest Corporation which was sold in December 2000.
Domestic oil and gas operating expenses consist of lease operating expenses
and a number of production and reserve based taxes. Domestic oil and gas
operating expenses decreased 9% to $2,491,000 during the first quarter of 2001
compared to $2,746,000 during the prior year primarily due to the above
mentioned sale of Harken Southwest Corporation. Oil and gas operating expenses
decreased as a percentage of related oil and gas revenues due primarily to the
increase in gas prices during the first quarter of 2001
16
compared to the prior year period. Harken is reviewing its existing domestic
operations to identify specific properties for which operating expenses can be
reduced.
Harken expects that oil and gas production volumes generated as a result of
recent drilling and workover activity will offset the normal production declines
experienced in its operating areas. Harken's oil and gas production volumes
during the remainder of 2001 are expected to decrease due to recent property
sales and could further decrease as Harken is currently continuing to review
certain opportunities to sell additional producing properties for cash in order
to raise capital for future capital expenditure and acquisition needs. Harken
expects that domestic oil and gas revenues will further benefit if crude oil and
natural gas prices remain at current levels. Harken's oil and gas revenues are
highly dependent upon product prices, which Harken is unable to predict.
MIDDLE AMERICAN OPERATIONS
Harken's Colombian oil revenues have decreased 30% from $2,729,000 during
the first quarter of 2000 to $1,907,000 during the first quarter of 2001.
During the first quarter of 2000 and 2001, Harken's Colombian production
operations consisted of production testing conducted on Harken's Bolivar and
Alcaravan Association Contract areas.
During the first quarter of 2000 and 2001, sales of production from
Harken's Estero #1 well on the Alcaravan Contract area have been temporarily
limited to approximately 1,000 gross barrels of oil per day due to pipeline
constraints and pumping capacity. Beginning in April 2001, such pipeline
constraints have been partially alleviated and Harken is now allowed to produce
and transport up to approximately 2,000 gross barrels of oil per day from both
Estero #1 and initial production test operations from the recently drilled
Estero #2 well. Harken's Catalina #1 and Olivo #1 wells on the Bolivar Contract
area have averaged a combined 436 gross barrels of oil per day during the first
quarter of 2001, compared to averaging approximately 1,250 gross barrels per day
during the prior year period. Harken's production volumes during the remainder
of 2001 will primarily remain dependent on existing well production, pipeline
transportation capacity and pumping efficiency.
Middle American operating expenses have increased from $527,000 during the
first quarter of 2000 to $763,000 for the first quarter of 2001, primarily due
to transportation and security costs.
INTEREST AND OTHER INCOME
Interest and other income decreased during the first quarter of 2001
compared to the prior year period due to Harken's usage of cash during 2000 for
capital expenditures. Harken generated approximately $382,000 of interest income
during the first quarter of 2000, compared to approximately $245,000 of interest
income during the first quarter of 2001. Additional decreases in Harken's cash
balances could be mitigated or offset by Harken's efforts and plans to sell or
monetize certain domestic oil and gas properties as well as from additional
capital sources.
OTHER COSTS AND EXPENSES
General and administrative expenses decreased during the first quarter of
2001 compared to the first quarter of 2000 primarily due to staff reductions and
overall administrative efficiencies.
17
Depreciation and amortization expense increased during the first quarter of
2001 compared to the prior year period primarily due to downward revisions
during 2000 in Harken's Colombia proved reserves. Depreciation and amortization
on oil and gas properties is calculated on a unit of production basis in
accordance with the full cost method of accounting for oil and gas properties.
Interest expense and other increased during the first quarter of 2001
compared to the prior year period primarily due to the decrease in the amounts
of interest capitalized to Harken's Colombian unevaluated property costs. In
addition, during the first quarter of 2001, Harken expensed the remaining
unamortized issuance costs related to the IFC project loan finance facility,
which was terminated in May 2001.
LIQUIDITY AND CAPITAL RESOURCES
CAPITAL SOURCES
Harken's working capital at March 31, 2001 was approximately $6.2 million,
compared to approximately $15.3 million at December 31, 2000. The decrease in
working capital during the first quarter of 2001 resulted primarily from
approximately $9.0 million of capital expenditures. Assisted by current strong
oil and natural gas prices, Harken's operations generated approximately $3.8
million of cash flow during the first quarter of 2001. Harken's cash resources
at March 31, 2001 totaled approximately $17.3 million. Considering its existing
cash resources and potential additional capital sources, Harken believes that it
will have sufficient cash resources to fund all of its planned capital
expenditures during 2001. Harken's ongoing exploration, development and
acquisition efforts are expected to be funded through a combination of cash on
hand, issuances of debt or equity securities, or through cash provided by either
existing or newly established financing arrangements or through property sales.
Sales of domestic producing property interests during the first quarter 2001
generated cash proceeds of approximately $1.4 million. Subsequent to March 31,
2001, Harken has sold additional oil and gas properties for approximately $5.9
million cash. In light of current strong prices for oil and natural gas, Harken
is continuing to consider selling or monetizing certain additional domestic oil
and gas reserves for cash in order to fund future acquisition or capital
expenditure needs.
Harken's cash flows from operations continue to be supplemented by ongoing
production from its Alcaravan and Bolivar Contract areas in Colombia. Subsequent
to March 31, 2001, Colombian operating cash flows have also been strengthened by
production from Harken's newly drilled Estero #2 well, in addition to Harken's
success in increasing transportation capacity from the Palo Blanco field area.
Domestically, reductions in operating cash flows due to recent property sales
are expected to be partially mitigated due to the significant drilling activity
during 2000, additional domestic drilling planned in 2001, and due to continuing
strong oil and natural gas prices.
Certain Harken subsidiaries entered into a three year loan facility with
Bank One Texas, N.A. ("Bank One"), which is secured by certain of Harken's
domestic oil and gas properties and a guarantee from Harken. The Bank One
facility provides borrowings subject to a borrowing base (as defined by the Bank
One facility) which was approximately $15,000,000 as of March 31, 2001. As of
May 14, 2001, the borrowing base was
18
approximately $19,000,000, which provides availability for additional borrowing
of up to approximately $9 million to be used for domestic exploration and
development activities.
The Bank One facility requires the Borrowers, as well as Harken, to
maintain certain financial covenant ratios and requirements. Harken and the
Borrowers are in compliance with all requirements under the Bank One facility,
as amended, as of March 31, 2001.
During the third quarter of 1999, Harken announced the non-recourse project
finance loan agreement facility with the International Finance Corporation
("IFC"), the private sector subsidiary of the World Bank Group. Loans under
this facility were to be available for the development of the Bolivar
Association Contract in Colombia ("the Project"). In May 2001, Harken and IFC
agreed to terminate the project finance loan agreement, in light of recent
drilling and production results on the Bolivar Association Contract block and in
light of recent security concerns in Colombia.
CAPITAL COMMITMENTS
Harken's primary need for capital is to fund its planned exploration and
development efforts domestically as well as in Middle America. Not including its
planned Costa Rica exploration activities, Harken anticipates worldwide capital
expenditures will total approximately $25 million during 2001. Harken plans to
seek joint venture partner participation to fund a portion of the cost for all
of its significant exploration projects, particularly its Costa Rican
operations. A portion of Harken's planned capital expenditures are discretionary
and, as a result, will be curtailed if sufficient funds are not available. In
addition, Harken intends to continue to pursue North American and international
acquisition opportunities.
Harken anticipates that full development of its Middle American operations
will take several years and require significant additional capital expenditures,
the ultimate amount of which cannot be presently predicted. A large portion of
Harken's capital expenditure obligations and plans in Colombia for 2001 were
accomplished during the first quarter of 2001, with the drilling of the
Manantial #1, the Olivo #2 and the Estero #2 wells as well as the acquisition of
Los Olmos Contract area seismic. Harken has one additional obligation well in
Colombia during the current year related to the Bocachico Contract, which it
plans to drill during the third quarter of 2001. Harken may choose to drill
additional wells in Colombia.
Terms of each of the Association Contracts entered into between Harken de
Colombia, Ltd. and Ecopetrol commit Harken to perform certain activities in
Colombia in accordance with a prescribed timetable. Failure by Harken to
perform these activities as required could result in Harken losing its rights
under the particular Association Contract, which could potentially have a
material adverse effect on Harken's business.
Related to Harken's Costa Rica operations, Harken is to pay a remaining
amount of $500,000 to MKJ Xploration, Inc. ("MKJ") upon the mobilization of the
rig related to the initial well to be drilled offshore Costa Rica, the Moin #2,
which Harken expects to drill pending the receipt of the necessary environmental
drilling permit and subject to drilling rig availability. Also, up to $4 million
is to be committed by Harken over the next year to fund the initial minimum work
program obligations under the Costa Rica Contract, and such minimum amount would
be expended with the Moin #2 well, which is expected to require in excess of $10
million to drill. Harken is currently seeking joint venture partner
participation to share in the work program expenditures required by the Costa
Rica Contract prior to drilling
19
the Moin #2 well. Terms of the Costa Rica Contract and the agreement with MKJ
commit Harken Costa Rica Holdings ("HCRH") to perform certain activities in
Costa Rica in accordance with a prescribed timetable. Failure by HCRH to perform
these activities as required could result in HCRH losing its rights under the
Costa Rica Contract or Harken losing a portion of its ownership in HCRH, either
of which could have a material adverse effect on Harken's business.
Funded by efforts to generate additional cash through sales of certain
producing properties in light of current high product prices, Harken's North
American operating strategy continues to include efforts to acquire additional
oil and gas reserves through exploration and development drilling activities in
North America, particularly on selected properties acquired through the August
1999 merger with XPLOR Energy, Inc., the additional prospects acquired in
December 1999, and through acquisitions.
Subsequent to yearend, and through May 14, 2001, Harken has repurchased
additional 5% European Notes with a total face amount of $250,000 from holders
in exchange for cash of approximately $140,000 plus transaction expenses. Harken
continues to consider additional transactions with the 5% European Note holders
whereby Harken may retire additional Notes in exchange for shares of Harken
common stock, cash or other consideration.
Operational Contingencies -- Harken has accrued approximately $6.6 million
at March 31, 2001 relating to operational or regulatory liabilities related to
Harken's North American operations. Harken and its subsidiaries currently are
involved in various lawsuits and other contingencies, which in management's
opinion, will not result in significant loss exposure to Harken.
Harken's 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. Harken's international oil and gas exploration
and production operations, 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. Harken may continue to experience similar delays in the future. Failure
to obtain these licenses and permits in a timely manner may prevent Harken from
obtaining alternative financing.
20
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) EXHIBIT INDEX
Exhibit
--------
3.1 Certificate of Incorporation of Harken Energy Corporation as
amended (filed as Exhibit 3.1 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).
3.2 Amendment to the Certificate of Incorporation of Harken
Energy Corporation (filed as Exhibit 28.8 to the
Registration Statement on Form S-1 of Tejas Power
Corporation, File No. 33-37141, and incorporated by
reference herein.)
3.3 Amendment to the Certificate of Incorporation of Harken
Energy Corporation (filed as Exhibit 3 to Harken's Quarterly
Report on Form 10-Q for fiscal quarter ended March 31, 1991,
File No. 0-9207, and incorporated by reference herein.)
3.4 Amendments to the Certificate of Incorporation of Harken
Energy Corporation (filed as Exhibit 3 to Harken's Quarterly
Report on Form 10-Q for fiscal quarter ended June 30,1991,
File No. 0-9207, and incorporated by reference herein.)
3.5 Amendments to the Certificate of Incorporation of Harken
Energy Corporation (filed as Exhibit 3.5 to Harken's Annual
Report on Form 10-K for the fiscal year ended December 31,
1996, File No. 0-9207, and incorporated herein by
reference).
3.6 Amendment to the Certificate of Incorporation of Harken
Energy Corporation (filed as Exhibit 3.6 to Harken's Annual
Report on Form 10-K for the fiscal year ended December 31,
1997, File No. 0-9207 and incorporated by reference herein).
3.7 Amendment to the Certificate of Incorporation of Harken
Energy Corporation (filed as Exhibit 3.6 to Harken's
Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1998, File No. 0-9207, and incorporated by
reference herein).
3.8 Bylaws of Harken Energy Corporation, as amended (filed as
Exhibit 3.2 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).
4.1 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. 0-9027, 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).
21
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.LC., as Rights Agent (filed as Exhibit 4 to
Harken's Current Report on Form 8-K dated April 7, 1998,
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, 1998, File No. 0-9207, and incorporated by
reference herein).
4.8 Certificate of Designations, Preferences and Rights of
Series F Convertible Preferred Stock (filed as Exhibit 4.8
to Harken's Quarterly Report on Form 10-Q for the period
ended June 30, 1998, File No. 0-9207, and incorporated by
reference herein).
4.9 Certificate of Designations of Series G1 Convertible
Preferred Stock (filed as Exhibit 4.9 to Harken's Annual
Report on Form 10-K for fiscal year ended December 31,
2000, File No. 09207, and incorporated by reference
herein).
10.1 Seventh Amendment and Restatement of Harken's Amended Stock
Option Plan (filed as Exhibit 10.1 to Harken's Annual
Report on Form 10-K for the fiscal year ended December 31,
1991, File No. 0-9207, and incorporated by reference
herein).
10.2 Amended and Restated Non-Qualified Incentive Stock Option
Plan of Harken adopted by Harken's stockholders on
February 18, 1991 (filed as Exhibit 10.2 to Harken's Annual
Report on Form 10-K for the fiscal year ended December 31,
1991, File No. 0-9207, and incorporated by reference
herein).
10.3 Form of Advancement Agreement dated September 13, 1990,
between Harken and each director of Harken (filed as
Exhibit 10.38 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).
22
10.4 Harken Energy Corporation's 1993 Stock Option and
Restricted Stock Plan (filed as Exhibit 4.3 to Harken's
Registration Statement on Form S-8, and incorporated by
reference herein).
10.5 Harken Energy Corporation's Directors Stock Option Plan
(filed as Exhibit 4.3 to Harken's Registration Statement on
Form S-8, and incorporated herein by reference).
10.6 Association Contract (Bolivar) by and between Harken de
Colombia, Ltd. and Empresa Colombia de Petroleos (filed as
Exhibit 10.4 to Harken's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 1996, and incorporated
herein by reference).
10.7 Harken Energy Corporation 1996 Incentive and Nonstatutory
Stock Option Plan (filed as Exhibit 10.1 to Harken's
Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 1996, and incorporated herein by
reference).
10.8 Association Contract (Alcaravan) dated as of December 13,
1992, but effective as of February 13, 1993, by and between
Empresa Colombia de Petroleos (filed as Exhibit 10.1 to
Harken's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, File No. 0-9207, and incorporated
herein by reference).
10.9 Association Contract (Bocachico) dated as of January 1994,
but effective as of April 1994, by and between Empresa
Colombia de Petroleos (filed as Exhibit 10.1 to Harken's
Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1994, File No. 0-9207, and incorporated
herein by reference).
10.10 Trust Indenture dated June 11, 1997, by and between Harken
and Marine Midland Bank plc (filed as Exhibit 10.1 to
Harken's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1997, File No. 0-9207, and
incorporated herein by reference).
10.11 Placing Agreement Dated June 3, 1997, by and among Harken
and the other signatories thereto (filed as Exhibit 10.2 to
Harken's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1997, File No. 0-9207, and
incorporated herein by reference).
10.12 Credit Agreement between Harken Exploration Company, XPLOR
Energy, Inc. Harken Energy West Texas, Inc. , Harken
Southwest Corporation, South Coast Exploration Co., Xplor
Energy SPV-1, Inc., McCulloch Energy, Inc. and Bank One,
Texas, N.A. dated August 11, 2000 and as amended
December 21, 2000 and December 31, 2000 (Filed as Exhibit
10.12 to Harken's Annual Report on Form 10-K for fiscal
year ended December 31, 2000, File No. 09207, and
incorporated by reference herein).
(b) REPORTS ON FORM 8-K
None filed.
23
HARKEN ENERGY CORPORATION
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Harken Energy Corporation
-----------------------------------
(Registrant)
Date: May 14, 2001 By: /s/Anna M. Williams
---------------------- -----------------------------------
Senior Vice President-Finance and
Chief Financial Officer
24