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As filed with the Securities and Exchange Commission on May 22, 1996
Registration No. _________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HARKEN ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE 95-2841597
(State or other jurisdiction of (I.R.S.employer identification nuumber)
incorporation or organization)
HARKEN ENERGY CORPORATION
5605 NORTH MACARTHUR BLVD., SUITE 400
IRVING, TEXAS 75038
(214) 753-6900
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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GREGORY S. PORTER
VICE PRESIDENT - LEGAL
HARKEN ENERGY CORPORATION
5605 NORTH MACARTHUR BLVD., SUITE 400
IRVING, TEXAS 75038
(214) 753-6900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
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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
<TABLE>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $0.01 1,244,000 $2.50 $3,110,000 $1,072.41
per share
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</TABLE>
(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 May 17, 1996.
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.
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PROSPECTUS
1,244,000 Shares
HARKEN ENERGY CORPORATION
Common Stock
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The 1,244,000 shares (the "Shares") of common stock, par value $0.01 per
share ("Common Stock"), of Harken Energy Corporation, a Delaware corporation
("Harken" or the "Company"), offered hereby are being offered by the
stockholders of the Company named herein (the "Selling Stockholders"). The
Company will not receive any of the proceeds from the sale of the Shares, but
the Company has agreed to bear certain expenses of registration of the Shares
under the federal and state securities laws (currently estimated to be $7,000),
and of any offering and sale hereunder not including certain expenses such as
commissions and discounts of underwriters, dealers or agents. See "Selling
Stockholders" and "Use of Proceeds."
The Common Stock is traded on the American Stock Exchange, under the
symbol "HEC." On May __, 1996, the closing sales price of the Common Stock
as reported on the American Stock Exchange was $______ per share.
The Shares may be offered and sold from time to time by the Selling
Stockholders directly or through broker-dealers or underwriters who may act
solely as agents, or who may acquire the Shares as principals. The distribution
of the Shares may be effected in one or more transactions that may take place
through the American Stock Exchange or any other national securities exchange on
which the Common Stock is approved for listing in the future, including block
trades or ordinary broker's transactions, or through privately negotiated
transactions, or through an underwritten public offering, or through a
combination of any such methods of sale, at such prices as may be obtainable.
Usual and customary or specially negotiated brokerage fees or commissions may be
paid by the Selling Stockholders in connection with such sales. See "Plan of
Distribution."
To the extent required, the specific shares of Common Stock to be sold,
the purchase price, public offering price, names of any agent, dealer or
underwriter, and any applicable commission or discount with respect to a
particular offering will be set forth in an accompanying Prospectus Supplement.
The aggregate proceeds to the Selling Stockholders from the sale of the Shares
will be the purchase price thereof less the aggregate agents' commissions and
underwriters' discounts, if any, and other expenses of distribution not borne by
the Company.
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of any of the
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"), and any commission received by
them and any profit on the resale of the Shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act. See "Plan
of Distribution" for indemnification arrangements.
PROSPECTIVE INVESTORS SHOULD CONSIDER AND REVIEW THE INFORMATION UNDER
THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 4 PRIOR TO AN INVESTMENT IN THE
SHARES OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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The date of this Prospectus is May __, 1996.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed by the Company may be
inspected and copied, at prescribed rates, at the public reference facilities
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, Room
1024, as well as at the regional offices of the Commission at Seven World
Trade Center, 13th Floor, New York, New York 10048, and Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60601. Copies
of such material may also be obtained at prescribed rates by writing to the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Common Stock is listed on the American Stock
Exchange. Reports, proxy statements and other information described above
may also be inspected and copied at the offices of the American Stock
Exchange at 86 Trinity Place, New York, New York 10006.
The Company has filed with the Commission a registration statement on
Form S-3 (the "Registration Statement") under the Securities Act, with
respect to the Shares offered hereby. This Prospectus, which constitutes a
part of the Registration Statement, does not contain all the information set
forth in the Registration Statement and the exhibits thereto. For further
information with respect to the Company and the Common Stock, reference is
hereby made to such Registration Statement and exhibits. Statements contained
herein concerning the provisions of any documents are necessarily summaries
of those documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission.
The Registration Statement and any amendments thereto, including exhibits
filed as a part thereof, are available for inspection and copying as set
forth above.
TABLE OF CONTENTS
PAGE
-----
Available Information .................................................. 2
Incorporation of Certain Documents by Reference ........................ 3
The Company ............................................................ 4
Risk Factors ........................................................... 4
Use of Proceeds ........................................................ 8
Selling Stockholders ................................................... 9
Plan of Distribution ................................................... 10
Legal Matters .......................................................... 11
Experts ................................................................ 11
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR ANY OTHER PERSON. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR ANY OFFER TO
OR SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed with the Commission are
incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K/A for the year ended
December 31, 1995;
(2) The Company's Proxy Statement for the Annual Meeting of Stockholders
of Harken to be held on June 11, 1996;
(3) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, as amended, including all
amendments and reports filed for the purpose of updating such
description; and
(4) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1996.
All documents filed by Harken pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering made hereby shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of the
filing of such documents. Any statement contained in this Prospectus, in a
supplement to this Prospectus or in a document incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any subsequently filed supplement to this Prospectus or in any document
that also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will furnish without charge to each person to whom a copy of
this Prospectus has been delivered, upon written or oral request, a copy of any
or all documents incorporated by reference in this Prospectus, other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference in such documents. Written or oral requests for such copies should be
directed to Gregory S. Porter, Harken Energy Corporation, 5605 North MacArthur
Blvd., Suite 400, Irving, Texas 75038 (Telephone: (214) 753-6900).
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THE COMPANY
Harken is engaged in oil and gas exploration, development and production
operations both domestically and internationally through its various wholly-
owned subsidiaries and joint venture investments. Harken's domestic operations
include oil and gas exploration and production operations in the Aneth Field and
Blanding Sub-Basin portions of the Paradox Basin in Utah, Arizona and New
Mexico, in the Western Paradox Basin in Utah, and the on-shore Gulf Coast of
Texas and the Texas Panhandle. Harken's international operations include four
exclusive Colombian Association Contracts between Harken's wholly-owned
subsidiary, Harken de Colombia, Ltd., and Empresa Colombiana de Petroleos
("Ecopetrol"). Harken's international operations currently consist solely of
exploration activities, however, management is continuing to pursue
international opportunities in all areas of Harken's operations.
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 5605 North MacArthur Blvd., Suite 400, Irving, Texas 75038 and its
telephone number is (214) 753-6900.
RISK FACTORS
PRIOR TO MAKING AN INVESTMENT DECISION, PROSPECTIVE INVESTORS SHOULD
CONSIDER CAREFULLY ALL OF THE INFORMATION SET FORTH IN THIS PROSPECTUS AND, IN
PARTICULAR, SHOULD EVALUATE THE FOLLOWING RISK FACTORS.
LOSSES FROM CONTINUING OPERATIONS
Harken reported losses from continuing operations for the fiscal years
ended December 31, 1994 and 1995, and the quarter ended March 31, 1996, in the
amounts of $8,211,000, $1,625,000 and $296,000, respectively. There can be no
assurance that Harken will not continue to report losses.
DILUTION; EFFECT OF SALES OF COMMON STOCK ON MARKET PRICE
As of May 21, 1996, there were 81,209,908 shares of Common Stock
outstanding. Harken has previously registered with the Commission an aggregate
of 5,529,091 shares of Common Stock for resale by certain stockholders of the
Company, in addition to the 1,244,000 shares of Common Stock registered for
resale pursuant to the Registration Statement of which this Prospectus forms a
part. In addition, Harken has reserved a significant number of shares of Common
Stock for future issuance as described below. There can be no assurance that
the sale of the 5,529,091 shares of Common Stock previously registered for
resale or the issuance of the shares of Common Stock which have been reserved
for future issuance will not have a material adverse effect on the then
prevailing market price of the Common Stock. Furthermore, issuance of the
shares of Common Stock as described below could result in significant dilution
to the stockholders of the Company.
Pursuant to a Purchase and Sale Agreement (the "Momentum Agreement") by
and among Harken, Harken Exploration Company, a wholly-owned subsidiary of
Harken ("Exploration"), and Momentum Operating Co., Inc. ("Momentum"), among
other consideration, Exploration issued a promissory note (the "Note") to
Momentum in the principal amount of $13,000,000, which principal amount is
subject to adjustment as described below under "--Momentum Promissory Note."
Exploration and Harken have the right to convert all amounts due at each
maturity date of the Note into shares of Common Stock of Harken. The number of
shares of Common Stock to be issued at maturity will be based upon the average
market price of the Common Stock determined during a defined trading period
prior to each maturity date. As a result, the number of shares of Common Stock
which Harken may elect to issue to Momentum can not presently be determined.
However, if Harken elects to convert the amounts due under the Note into shares
of Common Stock, the number of shares of Common Stock to be issued to Momentum
could result in significant dilution to the stockholders of Harken.
Pursuant to the terms of an Agreement and Plan of Merger among Harken,
Search Exploration, Inc. ("Search") and a wholly-owned subsidiary of Harken (the
"Search Acquisition"), Harken may be required to issue up to approximately 8.4
million shares of Common Stock, in addition to the approximately 2.2 million
shares of Common Stock that were issued upon the consummation of the Search
Acquisition in May 1995. Of
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the approximately 8.4 million shares of Common Stock which may be required to
be issued in connection with the Search Acquisition, (i) approximately
300,000 shares of Common Stock may be issued upon the exercise of certain
warrants issued by Harken, and (ii) up to 8.1 million shares of Common Stock
may be issued on or about September 30, 1996, to the holders of record at the
effective time of the Search Acquisition of certain securities of Search and
overriding royalty interests in certain properties held by Search, based in
part upon the increase that may subsequently be realized in the value of a
group of undeveloped leases and properties of Search.
Harken has reserved additional shares of Common Stock for issuance as
follows: (i) as of May 21, 1996, Harken had $5,450,000 in principal amount of 8%
Senior Convertible Notes outstanding which are presently convertible by the
holders thereof into 3,633,333 shares of Common Stock; (ii) 2,510,000 shares of
Common Stock have been reserved for issuance upon exercise of outstanding
warrants, in addition to the warrants issued pursuant to the Search Acquisition;
and (iii) 3,796,848 shares of Common Stock have been reserved for issuance upon
exercise of outstanding stock options.
MOMENTUM PROMISSORY NOTE
As described above, pursuant to the Momentum Agreement, Exploration
issued to Momentum the Note in the principal amount of $13,000,000. The Note
matures and becomes payable in two stages. On October 18, 1996, $8,000,000 in
principal amount of the Note, subject to adjustment as described below, will
mature, and become payable ("Maturity I"). The remaining $5,000,000 in
principal amount of the Note, subject to adjustment as described below, will
mature and become payable ("Maturity II') on July 15, 1997; provided, however,
that if the amount due at Maturity I is paid in shares of Common Stock, such
principal amount will mature and become payable on the earlier of (i) the
expiration of 270 days following the date upon which the Commission declares
effective a registration statement covering the resale of the shares of Common
Stock issued to Momentum at Maturity I or (ii) November 15, 1997.
The principal amount due at Maturity I is subject, among other
adjustments, to adjustment as follows: (i) the principal amount will be adjusted
by an amount equal to the difference between (x) the greater of the amount
realized by Momentum upon the sale of the 2,500,000 shares of Common Stock
issued to Momentum upon closing of the Momentum Agreement (the "Purchase
Shares") or the amount which could have been realized by Momentum if the
Purchase Shares were sold at the average trading price of the Common Stock
during the period between December 21, 1995 and Maturity I (the "Maturity I
Average Trading Price") and (y) $2.00 per share multiplied by the number of such
shares of Common Stock sold by Momentum between December 21, 1995 and Maturity
I; and (ii) the principal amount will be increased by a factor calculated at 10%
per annum from December 21, 1995 on the weighted average daily differences
between $5,000,000 and the aggregate proceeds received by Momentum upon the sale
of the Purchase Shares.
The principal amount due at Maturity II is subject to adjustment as
follows: (i) the principal amount will be adjusted by an amount equal to the
difference between (x) the greater of the amount realized by Momentum upon the
sale of the shares of Common Stock issued to Momentum at Maturity I or the
amount which could have been realized by Momentum if such shares were sold at
the average trading price of the Common Stock during the period between Maturity
I and Maturity II and (y) the Maturity I Average Trading Price multiplied by the
number of shares of Common Stock sold by Momentum between Maturity I and
Maturity II; and (ii) the principal amount will be increased by a factor
calculated at 10% per annum from Maturity I of the weighted average daily
difference between $8,000,000 and the aggregate proceeds received by Momentum
upon the sale of the shares of Common Stock issued to Momentum at Maturity I.
The Company does not currently have sufficient cash reserves to repay
the Note, and the Company does not anticipate that the Company's cash flow from
operations will be sufficient to repay the Note. If the Company does not elect
to convert the amounts due under the Note into shares of Common Stock, the
Company anticipates that it will be required to seek additional sources of
financing in order to repay the Note. There can be no assurance that such
financing will be available to the Company. In addition, the Company does not
currently have available a sufficient number of authorized and unissued shares
of Common Stock which have not previously been reserved for other purposes to
allow the Company to convert the amount due at Maturity I
5
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into shares of Common Stock. Unless shares which have previously been
reserved become available, an amendment to the Company's Certificate of
Incorporation would be required to increase the number of authorized shares
of Common Stock, which would require approval of the Company's stockholders.
There can be no assurance that such approval can be secured. Upon a default
in payment of the Note, Momentum would be entitled to assume operation of the
properties acquired by Exploration under the Momentum Agreement, and to
receive a substantial portion of the proceeds therefrom until the Note is
repaid, which could have a material adverse effect on Harken's financial
condition.
VOLATILITY OF HARKEN COMMON STOCK TRADING PRICE
The daily closing prices of the Common Stock as reported by the American
Stock Exchange has fluctuated significantly over the past 12 months, ranging
from a high of $2.9375 per share to a low of $1.4375 per share. Management
believes that the price fluctuations and trading activity in the Common Stock
during the past 12 months are attributable to a number of factors, including
Harken's international exploration activities. There can be no assurance that
future announcements regarding Harken's international exploration efforts will
not have a substantial adverse effect on the then prevailing market price of the
Common Stock.
CONTINGENT LIABILITIES OF HARKEN
Harken has certain contingent liabilities that could have a material
adverse effect on its financial condition if Harken were required to satisfy
these liabilities, including the following:
Harken Southwest Corporation ("HSW") owns an interest in the Aneth Gas
Plant. The Aneth Gas Plant facility was in operation for many years prior to
HSW becoming an owner. The operations at the Aneth Gas Plant previously used
open, unlined drip pits for storage of various waste products. The current
plant owners have replaced all of the open ground pits currently being used with
steel tanks. The plant owners are currently in the process of closing the open
ground pits.
Texaco, the plant's operator, received a letter from the Environmental
Protection Agency ("EPA") dated July 21, 1991 and a subsequent letter dated
June 8, 1992, in which the EPA requested certain information in order to
determine if hazardous substances had been released into the environment at
the Aneth Gas Plant. Texaco has advised HSW that certain information was
supplied to the EPA pursuant to this request. Subsequently, core samples in
and around certain pit areas were jointly taken by the EPA and Texaco. The
EPA has responded to the initial sampling of the drip pits, and Texaco is now
completing a Phase II environmental investigation to provide further test
results in response to evaluation procedures required by the EPA related to
the drip pits.
The prior owner of the Aneth Gas Plant facility has agreed to accept
financial responsibility for a portion of this remediation work. Texaco and the
other current plant owners, including HSW, are presently negotiating a formal
agreement with the prior owner to allocate the costs of the remediation work.
Harken has accrued a liability in its financial statements for its best estimate
of its share of the remediation cost. There can be no assurance, however, that
the actual amount will not be significantly higher than the amount that has been
accrued, which could have a material adverse effect on the financial condition
of Harken.
PREFERRED STOCK AUTHORIZED FOR ISSUANCE
Harken has ten million shares of preferred stock available for issuance.
The Board of Directors is authorized to issue such preferred stock in one or
more series and to set the designations, preferences, powers and relative rights
and restrictions thereof without further approval by the stockholders of the
Company. Presently, Harken has four series of preferred stock authorized, but
no shares of preferred stock are currently outstanding. Such shares of
preferred stock, if issued, would have certain preferences over the shares of
Common Stock with respect to the payment of dividends and upon liquidation,
dissolution, winding-up and in certain instances, voting. The Board of
Directors of Harken also may authorize additional series of preferred stock in
the future that have similar or additional preferences over the shares of Common
Stock.
6
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RISKS RELATED TO INTERNATIONAL OPERATIONS
Harken presently conducts international operations and anticipates that
it will conduct significant international operations in the future. Foreign
properties, operations or investments may be adversely affected by local
political and economic developments, exchange controls, currency fluctuations,
royalty and tax increases, retroactive tax claims, renegotiation of contracts
with governmental entities, expropriation, import and export regulations and
other foreign laws or policies governing operations of foreign-based companies,
as well as by laws and policies of the United States affecting foreign trade,
taxation and investment. In addition, as certain of Harken's operations are
governed by foreign laws, in the event of a dispute, Harken may be subject to
the exclusive jurisdiction of foreign courts or may not be successful in
subjecting foreign persons to the jurisdiction of courts in the United States.
Harken may also be hindered or prevented from enforcing its rights with respect
to a governmental instrumentality because of the doctrine of sovereign immunity.
Exploration and production activities in areas outside the United States are
also subject to the risks inherent in foreign operations, including loss of
revenue, property and equipment as a result of hazards such as expropriation,
nationalization, war, insurrection and other political risks.
Harken anticipates that full development of the oil and gas reserves in
the contract areas covered by Harken's four Colombian Association Contracts, if
any are discovered, will take several years and may require extensive production
facilities which could require significant additional capital expenditures. The
ultimate amount of such expenditures cannot be presently predicted. Harken
anticipates that amounts required to fund international activities, including
those in Colombia, will be funded from existing cash balances, asset sales,
stock issuances, production payments, operating cash flows and potentially from
industry partners; however, there can be no assurances that Harken will have
adequate funds available to it to fund its international activities without
participation from industry partners or that industry partners can be obtained
to fund such international activities. In addition, Harken faces certain
deadlines for completing specific projects required pursuant to the four
Association Contracts. Failure to meet any of such deadlines could result in
Harken losing its rights to one or more of the Association Contracts, which
could have a material adverse effect on Harken's business.
INDUSTRY RISKS
OIL AND GAS PRICE VOLATILITY. The revenues generated by Harken are
highly dependent upon the prices of crude oil and natural gas. Fluctuations in
the energy market make it difficult to estimate future prices of oil and natural
gas. Fluctuations in energy prices are caused by a number of factors, including
regional, domestic and international demand, energy legislation, federal or
state taxes on sales of crude oil and natural gas, production guidelines
established by the Organization of Petroleum Exporting Countries, and the
relative abundance of supplies of alternative fuel such as coal. Additionally,
changing international economic and political conditions may have a dramatic
impact upon crude oil and natural gas prices. Many of these factors are beyond
the control of Harken.
BUSINESS RISKS. Harken must continually acquire or explore for and
develop new oil and gas reserves to replace those being depleted by production.
Without successful drilling or acquisition ventures, Harken's oil and gas
assets, properties and revenues derived therefrom will decline over time. To
the extent Harken engages in drilling activities, such activities carry the risk
that no commercially viable oil or gas production will be obtained. The cost of
drilling, completing and operating wells is often uncertain. Moreover, drilling
may be curtailed, delayed or canceled as a result of many factors, including
title problems, weather conditions, shortages of or delays in delivery of
equipment, as well as the financial instability of well operators, major working
interest owners and drilling and well servicing companies. The availability of
a ready market for Harken's oil and gas depends on numerous factors beyond its
control, including the demand for and supply of oil and gas, the proximity of
Harken's natural gas reserves to pipelines, the capacity of such pipelines,
fluctuation in seasonal demand, the effects of inclement weather, and government
regulation. New gas wells may be shut-in for lack of a market until a gas
pipeline or gathering system with available capacity is extended into the area.
OPERATING HAZARDS AND UNINSURED RISKS. The operations of Harken are
subject to the inherent risks normally associated with exploration for and
production of oil and gas, including blowouts, cratering, pollution
7
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and fires, each of which could result in damage to or destruction of oil and
gas wells or production facilities or damage to persons and property. As is
common in the oil and gas industry, Harken is not fully insured against these
risks, either because insurance is not available or because Harken has
elected to self-insure due to high premium costs. The occurrence of a
significant event not fully insured against could have a material adverse
effect on Harken's financial condition.
ENVIRONMENTAL REGULATION. Harken's domestic activities are subject to
various Navajo, federal, state, and local laws and regulations covering the
discharge of material into the environment or otherwise relating to protection
of the environment. In particular, Harken's oil and gas exploration,
development, production, its activities in connection with storage and
transportation of liquid hydrocarbons and its use of facilities for treating,
processing, recovering, or otherwise handling hydrocarbons and wastes therefrom
are subject to stringent environmental regulation by governmental authorities.
In addition to these domestic laws and regulations, Harken's international
operations are subject to the laws, regulations and governmental approvals of
each foreign country in which it conducts activities including, but not limited
to, environmental laws and regulations governing oil and gas operations. Such
domestic and foreign laws and regulations have increased the costs of planning,
designing, drilling, installing, operating and abandoning Harken's oil and gas
wells and other facilities.
IMPRECISE NATURE OF RESERVE ESTIMATES. Reserve estimates are imprecise
and may be expected to change as additional information becomes available.
Furthermore, estimates of oil and gas reserves, of necessity, are projections
based on engineering data, and there are uncertainties inherent in the
interpretation of such data as well as the projection of future rates of
production and the timing of development expenditures. Reserve engineering is a
subjective process of estimating underground accumulations of oil and gas that
cannot be measured in an exact way, and the accuracy of any reserve estimate is
a function of the quality of available data and of engineering and geological
interpretation and judgment.
COMPETITION. The oil and gas industry is competitive in all its phases.
Competition is particularly intense respecting the acquisition of desirable
producing properties and the sale of oil and natural gas production. Harken's
competitors in oil and gas exploration, development and production include major
oil companies and numerous independent oil and gas companies, and individual
producers and operators. Many of Harken's competitors possess and employ
financial and personnel resources substantially greater than those which are
available to Harken, and may, therefore, be able to pay greater amounts for
desirable leases and to define, evaluate, bid for and purchase a greater number
of producing prospects than the financial or personnel resources of Harken will
permit.
EXTENSIVE REGULATION. The production of oil and gas is subject to
extensive Navajo, federal and state laws, rules, orders and regulations
governing a wide variety of matters, including the drilling and spacing of
wells, allowable rates of production, prevention of waste and pollution and
protection of the environment. In addition to these domestic laws and
regulations, Harken's international operations are subject to the laws,
regulations and governmental approvals of each foreign country in which it
conducts activities including, but not limited to, environmental laws and
regulations governing oil and gas operations. Such laws, rules and regulations
are subject to change. Any such change in any law, rule or regulation could
have the effect of increasing the Company's cost of exploration or production
or may limit the Company's revenues by regulating the level of oil and gas
production, either of which could have a material adverse effect on the
financial condition of the Company.
USE OF PROCEEDS
Harken will not receive any part of the proceeds from the sale of Shares
by the Selling Stockholders.
8
<PAGE>
SELLING STOCKHOLDERS
This Prospectus covers the offer and sale of the Shares by the Selling
Stockholders. Set forth below is the name of the Selling Stockholders, the
nature of any position, office or other material relationship that the Selling
Stockholders has had within the last three years with the Company or any of its
predecessors or affiliates, the number of shares of Common Stock owned by the
Selling Stockholders as of the date of this Prospectus, the number of shares of
Common Stock which may be offered by the Selling Stockholders pursuant to this
Prospectus, and the number of shares of Common Stock and the percentage of the
outstanding shares of Common Stock to be owned by the Selling Stockholders upon
completion of the offering if all of the Shares held by the Selling Stockholders
are sold. Any or all of the Shares listed below may be offered for sale by the
Selling Stockholders from time to time.
SHARES SHARES PERCENT OF
OWNED PRIOR SHARES OWNED COMMON STOCK
TO THE OFFERED AFTER THE OWNED AFTER THE
SELLING STOCKHOLDERS OFFERING HEREBY OFFERING(1) OFFERING(1)
- ------------------------- -------- ------ ---------- ---------------
Codell Holdings, Ltd. 150,000 150,000 -0- (2)
Gail Daly Forster 100,000 100,000 -0- (2)
Philippe Boutboul 100,000 100,000 -0- (2)
Sandra J. Kessler 264,000 200,000 64,000 (2)
Nicholas C. Kessler 70,000 70,000 -0- (2)
Uniform Gift to Minor
David Rudich 76,923 76,923 -0- (2)
Paul Kessler 30,000 30,000 -0- (2)
IRA Rollover
HIG Securities Limited 233,077 233,077 -0- (2)
Kenneth Friedman 120,000 80,000 40,000 (2)
BSR Investments Limited 183,000(3) 100,000 83,000(3) (2)
Stonington Partners Group 104,000(3) 104,000 -0- (2)
- --------------------
(1) Assumes no other disposition or acquisition of Common Stock and all Shares
included herein are sold.
(2) Less than one percent (1%).
(3) Represents shares issuable upon exercise of warrants to acquire Common
Stock.
9
<PAGE>
PLAN OF DISTRIBUTION
The Company 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 in the manner set forth on the cover page of
this Prospectus, from time to time, directly or through broker-dealers or
underwriters who may act solely as agents or may acquire the Shares 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 securities offered hereby for whom they
may act as agent.
The net proceeds to the Selling Stockholders from the sale of Common
Stock so offered 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 the Company. 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, to the extent
required, 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 applicable commission or discount with respect to a particular offering will
be set forth in an accompanying Prospectus Supplement. Such Prospectus
Supplement may, if necessary, 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 Commission to reflect the disclosure of additional information with
respect to the distribution of such securities.
Pursuant to the terms of separate Private Placement Subscription
Agreements between the Company and certain of the Selling Stockholders, the
Company has agreed to file a "shelf" registration statement pursuant to
Rule 415 under the Securities Act covering the sale of the shares of Common
Stock held by such Selling Stockholders, and to use diligent efforts to
maintain the effectiveness of such registration statement for the shorter of
(i) one year from the date of effectiveness of the registration statement, or
(ii) the date on which all of the shares of Common Stock covered by the
registration statement have been sold by the Selling Stockholders.
Under the terms of the Private Placement Subscription Agreements, the
Company has agreed to bear certain expenses of registration of the Shares under
the federal and state securities laws (currently estimated to be $7,000) and of
any offering and sale hereunder not including certain expenses such as
commissions or discounts of underwriters, dealers or agents attributable to the
sale of such Common Stock.
Pursuant to the Private Placement Subscription Agreements, the Company
has agreed to indemnify the Selling Stockholders against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments the
Selling Stockholders may be required to make in respect thereof.
To comply with the securities laws of certain jurisdictions, the
securities offered hereby may be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the securities offered hereby may not be offered or sold unless
they have been registered or qualified for sale in such jurisdictions or an
exemption from registration or qualification is available and is complied with.
The Selling Stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Rules 10b-6
and 10b-7, which provisions may limit the timing of purchases and sales by the
Selling Stockholders and any other such person. Furthermore, under Rule 10b-6
under the Exchange Act, any person engaged in a distribution of the Common Stock
may not simultaneously engage in market making activities with respect to such
securities for a period of two business days prior to the commencement of such
distribution. All of the foregoing may affect the marketability of the
securities offered hereby.
10
<PAGE>
LEGAL MATTERS
The validity of the Shares will be passed upon for Harken by Gregory S.
Porter, Esq., Vice President - Legal of Harken.
EXPERTS
The consolidated financial statements of the Company included in the
Company's Annual Report on Form 10-K/A for the year ended December 31, 1995,
which is incorporated by reference herein, has been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and is incorporated by reference herein in reliance upon the authority
of said firm as experts in accounting and auditing in giving said report.
11
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses to be paid by the Company in connection with the offering
described in this Registration Statement are estimated as follows:
Commission Registration Fee. . . . . . $ 1,072.00
Printing and Engraving Expenses. . . . 2,000.00
Accounting Fees and Expenses . . . . . 2,000.00
Blue Sky Fees and Expenses . . . . . . 500.00
Miscellaneous. . . . . . . . . . . . . 1,428.00
----------
Total . . . . . . . . . . . . . . . $ 7,000.00
----------
----------
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 the Company's Certificate of Incorporation and Article
VII of the Company's bylaws provide, in general, that the Company shall
indemnify its directors and officers under certain of the circumstances defined
in Section 145. The Company 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 the Company's
Certificate of Incorporation and bylaws.
ITEM 16. EXHIBITS.
4.1 - Form of certificate representing shares of Common Stock (filed as
Exhibit 1 to Harken's Registration Statement on Form 8-A,
File No. 0-9207, and incorporated by reference herein).
II-1
<PAGE>
4.2 - 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).
4.3 - 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 quarterly period
ended September 30, 1995, File No. 0-9207, and incorporated by
reference herein).
*5.1 - Opinion of Gregory S. Porter, Esq.
*23.1 - Consent of Arthur Andersen LLP.
*23.2 - Consent of Gregory S. Porter, Esq. (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, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) 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;
(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 thereto)
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
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the Registration
Statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act, 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 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under Item 15
above, 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.
II-3
<PAGE>
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 Irving, State of Texas, on May 22,
1996.
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------- ------------------------------- ------------
<S> <C> <C>
* Chairman of the Board and Chief May 22, 1996
- ---------------------------- Executive Officer (Principal
Mikel D. Faulkner Executive Officer)
* President and Chief Operating May 22, 1996
- ---------------------------- Officer and Director
Richard H. Schroeder
* Senior Vice President and Chief May 22, 1996
- ---------------------------- Financial Officer (Principal
Bruce N. Huff Accounting Officer and Principal
Financial Officer)
* Director May 22, 1996
- ----------------------------
Michael M. Ameen, Jr.
* Director May 22, 1996
- ----------------------------
Michael R. Eisenson
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
* Director May 22, 1996
- ----------------------------
Edwin C. Kettenbrink, Jr.
* Director May 22, 1996
- ----------------------------
Talat M. Othman
* Director May 22, 1996
- ----------------------------
Donald W. Raymond
* Director May 22, 1996
- ----------------------------
Gary B. Wood
</TABLE>
*Gregory S. Porter, by signing his 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 the Company and each officer and director.
/s/ Gregory S. Porter
- --------------------------------
Gregory S. Porter,
Attorney-in-Fact
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NO. EXHIBIT NUMBERED PAGE
--------------------------------------------------------- -------------
<S> <C> <C>
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 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 the
fiscal year ended December 31, 1989, File No. 0-9207, and
incorporated by reference herein).
4.3 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 quarterly period ended September 30, 1995, File
No. 0-9207, and incorporated by reference herein).
*5.1 Opinion of Gregory S. Porter, Esq.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Gregory S. Porter, Esq. (included in opinion
filed as Exhibit 5.1).
*24.1 Powers of Attorney.
</TABLE>
____________
* Filed herewith
<PAGE>
Exhibit 5.1
May 22, 1996
Harken Energy Corporation
5605 N. MacArthur Blvd
Suite 400
Irving, TX 75038
Re: Registration Statement on Form S-3
Gentlemen:
I have acted as counsel to Harken Energy Corporation, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of the offer and sale of an
aggregate of 1,244,000 shares (the "Shares") of common stock, $.01 par value
per share, of the Company ("Common Stock") pursuant to a Registration
Statement on Form S-3 of the Company (the "Registration Statement") to which
this opinion letter is an exhibit.
In reaching the opinion set forth herein, I have reviewed (a) the
Registration Statement, (b) the Certificate of Incorporation of the Company,
as amended, (c) the Bylaws of the Company, (d) records of proceedings of the
Board of Directors and the stockholders of the Company and (e) except as set
forth below, such other agreements, certificates of public officials and
officers of the Company, records, documents and matters of law that I deemed
relevant.
Based on and subject to the foregoing and subject further to the
assumptions, exceptions and qualifications hereinafter stated, I am of the
opinion that, subject to compliance with federal and state securities laws
(as to which I express no opinion), the Shares were duly authorized and
validly issued and are fully paid and nonassessable.
The opinion expressed above is subject in all respects to the following
assumptions, exceptions and qualifications:
a. I have assumed that (i) all signatures on all documents examined by me
are genuine, (ii) all documents submitted to me as originals are
accurate and complete, (iii) all documents submitted to me as copies
are true and correct copies of the originals thereof, (iv) all
information submitted to me is accurate and complete as of the date
hereof, (v) all persons executing and delivering documents reviewed
by me were competent to execute and to deliver such documents and
(vi) that all persons signing, in a representative capacity, documents
reviewed by me had authority to sign in such capacity.
b. I have assumed that there are no agreements, indentures, mortgages,
deeds of trust or instruments that affect the ability of the Company
to issue the Shares.
The opinions expressed above are limited to the laws of the State of
Texas, the General Corporation Law of the State of Delaware and the federal
laws of the United States of America. You should be aware that I am not
admitted to the practice of law in the State of Delaware and my opinion
herein as to the General Corporation Law of the State of Delaware is based
solely upon the unofficial compilation thereof contained in Prentice Hall
Information Services Corporation Statutes.
<PAGE>
Harken Energy Corporation
May 22, 1996
Page 2
This opinion letter may be filed as an exhibit to the Registration
Statement. In giving this consent, I do not thereby admit that I come into
the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
I disclaim any duty to advise you regarding any changes in, or to
otherwise communicate with you with respect to, the matters addressed herein.
Very truly yours,
/s/ GREGORY S. PORTER
--------------------------------------
Gregory S. Porter, Esq.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 of our report dated
February 28, 1996, except with regard to Note 15 as to which such date is
April 18, 1996, included in Harken Energy Corporation's Form 10-K/A for the
year ended December 31, 1995, and to all references to our Firm included in
this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Dallas, Texas
May 22, 1996
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints Mikel D. Faulkner, Bruce N. Huff, Larry E. Cummings and Gregory S.
Porter, or any of them (with full power of each of them to act alone), his
true and lawful attorney-in-fact and agent, with full power of substitution,
for him and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute and file a Registration Statement on Form S-3
under the Securities Act of 1933, as amended, and any or all amendments
(including without limitation, post-effective amendments and any amendment or
amendments increasing the amount of securities for which registration is
being sought), with all exhibits and any and all documents required to be
filed with respect thereto, with the Securities and Exchange Commission
and/or any regulatory authority relating to the registration of 1,244,000
shares of Common Stock, $0.01 par value, of Harken Energy Corporation and
such additional shares of Common Stock as the holders of "piggy-back"
registration rights may request to be included in such registration
statement, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same, as fully and to all intents and purposes as he himself
might or could do of personally present, hereby ratifying and confirming all
that the said attorneys-in-fact and agents, or any of them, or their
substitute or substitutes, may lawfully do or cause to be done.
IN WITNESS WHEREOF, this Power of Attorney has been signed by the following
persons in the capacities indicated as of the 16th day of May, 1996.
NAME CAPACITIES
/s/ Mikel D. Faulkner Chairman of the Board, Director and
- ------------------------------ Chief Executive Officer
Mikel D. Faulkner (Principal Executive Officer)
/s/ Bruce N. Huff Senior Vice President and Chief Financial
- ------------------------------ Officer (Principal Financial and
Bruce N. Huff Accounting Officer)
/s/ Richard H. Schroeder President, Chief Operating Officer
- ------------------------------ and Director
Richard H. Schroeder
<PAGE>
POWER OF ATTORNEY
May 16, 1996
Page 2
/s/ Michael M. Ameen, Jr. Director
- ------------------------------
Michael M. Ameen, Jr.
/s/ Michael R. Eisenson Director
- ------------------------------
Michael R. Eisenson
/s/ Talat M. Othman Director
- ------------------------------
Talat M. Othman
/s/ Donald W. Raymond Director
- ------------------------------
Donald W. Raymond
/s/ Edwin C. Kettenbrink, Jr. Director
- ------------------------------
Edwin C. Kettenbrink, Jr.
/s/ Gary B. Wood Director
- ------------------------------
Gary B. Wood
