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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 12, 1995
HARKEN ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-9207 95-2841597
(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
5605 N. MACARTHUR BLVD, SUITE 400 75038
IRVING, TEXAS (ZIP Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (214) 753-6900
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ITEM 5. OTHER EVENTS
On October 12, 1995, Harken Energy Corporation, a Delaware corporation
("Harken"), entered into a Development Finance Agreement (the "Development
Agreement") with Arbco Associates L.P., Offense Group Associates L.P., Kayne
Anderson Nontraditional Investments L.P. and Opportunity Associates L.P.
(collectively, the "Investors"), pursuant to which the Investors agreed to
provide up to $3,500,000 to Harken to finance the drilling of two wells on the
Rio Negro prospect in its Bocachico contract area in Colombia, in exchange for
the right to receive future payments from Harken equal to 40% of the net
profits Harken may derive from the sale of oil and gas produced from the Rio
Negro prospect (the "Participation") if the planned drilling on that prospect
is successful. Pursuant to the Development Agreement, Harken has agreed to
drill two wells on the Rio Negro prospect.
Pursuant to the Development Agreement, the Investors have the right at
any time prior to October 12, 1997 (the "Committment Date"), to convert all or
part of the Participation into shares of a newly created series of preferred
stock of Harken (the "Preferred Stock"), and Harken likewise has the right,
exercisable following the Committment Date, to convert up to 75% of the
Participation into shares of Preferred Stock if the Investors have not
previously elected to convert all of such Participation. If Harken exercises
its right to convert the Participation into Preferred Stock, the Investors at
this time can elect to receive cash instead of Preferred Stock or elect to
further convert any remianing portion of the Participation into addtional
shares of Preferred Stock. The shares of Preferred Stock would pay dividends
at an annual rate of 15% and are redeemable by Harken without premium except
for accrued unpaid dividends at any time after the Committment Date, and must
be redeemed by Harken no later than October 12, 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
None.
(b) Pro forma financial information.
None.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
99.1 -- Press Release dated October 13, 1995.
</TABLE>
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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 hereunto duly authorized.
HARKEN ENERGY CORPORATION
Date: October 16, 1995 By: /s/ Bruce N. Huff
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Bruce N. Huff,
Senior Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
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<CAPTION>
Sequentially
Numbered
Exhibit No. Exhibit Page
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<S> <C> <C>
99.1 Press Release dated October 13, 1995
</TABLE>
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NEWS RELEASE FOR FURTHER INFORMATION 214-753-6900
FOR IMMEDIATE RELEASE
HARKEN ANNOUNCES PARTNER FOR
COLOMBIA DRILLING
Dallas, Texas (October 13, 1995)--Harken Energy Corporation ("Harken")
(AMEX: "HEC") announced today the signing of an agreement with Kayne Anderson,
a Los Angeles financial manager and investment firm. Under this agreement,
Kayne Anderson will acquire a 40% participation in Harken's Rio Negro prospect
area in Colombia for $3,500,000.
In early 1994, Harken obtained an exclusive development and
exploration agreement covering the Bocachico Association Contract in the
Middle Magdalena Basin in Colombia. Since obtaining these exploration rights,
Harken has evaluated past drilling (1960's) on the acreage, reprocessed
existing seismic, and acquired new seismic data. Following this analysis,
Harken identified approximately 30,000 acres of this 190,000 acre Bocachico
Association Contract as the Rio Negro prospect.
As part of the technical evaluation of the Rio Negro prospect, Harken
engaged ResTech, a leading petrophysical firm, to evaluate the reservoir
potential of the area. The ResTech report estimated that utilizing modern
drilling and completion technology, approximately 200 million barrels of
recoverable hydrocarbon potential exists on this Rio Negro prospect.
The $3.5 million will be utilized by Harken to fund 100% of the
estimated costs to drill and evaluate two wells on the Rio Negro prospect. The
first well site has been identified (Torcaz #1) and Harken expects to begin
preparation of the site and mobilization of a drilling rig upon the receipt of
environmental permits, currently estimated to be late November. The second
well will be drilled following a production testing and evaluation program on
the first well, which could be concluded as early as the second quarter of
1996.
The agreement further provides that following completion of these two
wells, either party, Harken or Kayne Anderson, can elect an option under which
Harken will reacquire some portion or all of this participation interest for
Preferred Stock.
Mikel D. Faulkner, Chairman of Harken, had this to say, "I am very
pleased to have the Kayne Anderson group as a partner in the development of the
Rio Negro prospect. They have an excellent track record of investment
performance in the energy industry."
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HARKEN ENERGY CORPORATION ("HARKEN") (AMEX: "HEC") EXPLORES FOR, DEVELOPS AND
PRODUCES OIL AND GAS RESERVES DOMESTICALLY AND INTERNATIONALLY. THE COMPANY
CURRENTLY CONTROLS ACREAGE IN COLOMBIA AND OFFSHORE BAHRAIN AND IS ACTIVE IN
THE PARADOX BASIN IN UTAH AND THE ONSHORE GULF COAST OF TEXAS.
