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As filed with the Securities and Exchange Commission on January 16, 1996
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
____________________
HARKEN ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
____________________
DELAWARE 95-2841597
(State or other jurisdiction of (I.R.S. employer identification number)
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)
________________________________
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)
________________________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
________________________________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]__________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ] ______________________
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
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==============================================================================================================================
Proposed Maximum Proposed Maximum
Title of each Class of Amount to be Offering Price Per Aggregate Offering Amount of
Securities to be Registered Registered Unit(1) Price(1) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, par value $0.01 2,500,000 $1.6875 $4,218,750 $1,454.74
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
January 10, 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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<PAGE> 2
PROSPECTUS
2,500,000 Shares
HARKEN ENERGY CORPORATION
Common Stock
____________________
The 2,500,000 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 Stockholder"). 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
$25,000), and of any offering and sale hereunder not including certain expenses
such as commissions and discounts of underwriters, dealers or agents. See
"Selling Stockholder" and "Use of Proceeds."
The Common Stock is traded on the American Stock Exchange, under the symbol
"HEC." On January , 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
Stockholder 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 Stockholder 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 Stockholder 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.
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.
____________________
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.
____________________
The date of this Prospectus is January , 1996.
<PAGE> 3
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
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Page
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<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 8
Selling Stockholder . . . . . . . . . . . . . . . . . . . . . . . 9
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . 10
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
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 STOCKHOLDER 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 for the fiscal year ended
December 31, 1994;
(2) The Company's Quarterly Report on Form 10-Q, for the quarterly
period ended March 31, 1995;
(3) The Company's Quarterly Report on Form 10-Q, for the quarterly
period ended June 30, 1995;
(4) The Company's Quarterly Report on Form 10-Q, for the quarterly
period ended September 30, 1995;
(5) The Company's Proxy Statement for the Annual Meeting of Stockholders
of Harken held on June 16, 1995;
(6) 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;
(7) The Company's Current Report on Form 8-K dated November 4, 1994, as
amended by the Company's Current Report on Form 8-K/A filed on
January 3, 1995;
(8) The Company's Current Report on Form 8-K dated April 27, 1995;
(9) The Company's Current Report on Form 8-K dated May 16, 1995;
(10) The Company's Current Report on Form 8-K dated June 2, 1995, as
amended by the Company's Current Report on Form 8-K/A filed on
August 3, 1995;
(11) The Company's Current Report on Form 8-K dated October 5, 1995, as
amended by the Company's Current Report on Form 8-K/A filed on
December 1, 1995;
(12) The Company's Current Report on Form 8-K dated October 12, 1995;
(13) The Company's Current Report on Form 8-K dated December 15, 1995;
and
(14) The Company's Current Report on Form 8-K dated December 21, 1995.
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, 1993 and 1994 and the nine months ended September 30, 1995,
in the amounts of $1,797,000, $8,211,000 and $579,000, respectively. There can
be no assurance that Harken will not continue to report losses.
EFFECT OF SALES OF COMMON STOCK ON MARKET PRICE
As of January 10, 1996, there were 74,472,936 shares of Common Stock
outstanding. Harken has previously registered with the Commission an aggregate
of 6,246,308 shares of Common Stock for resale by certain stockholders of the
Company, in addition to the 2,500,000 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 6,246,308 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.
Pursuant to a Purchase and Sale Agreement (the "Momentum Agreement")
by and among Harken, Harken Exploration Company, a wholly owned subsidiary of
the Company ("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 the Company have the right to convert all amounts due at each
maturity date of the Note into shares of Common Stock of the Company. 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 the Company may elect to issue to Momentum can not
presently be determined. However, if the Company 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 the Company.
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
8.8 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 the approximately 8.8 million shares of
Common Stock which may be required to be issued in connection with the Search
Acquisition, (i) approximately 730,000 shares of Common Stock may be issued
upon the exercise of certain warrants issued by
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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
merger 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) Harken has $12,550,000 in principal amount of 8% Senior
Convertible Notes outstanding which are presently convertible by the holders
thereof into 8,366,673 shares of Common Stock; (ii) 2,306,000 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)
3,960,915 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 _______________, 1996 [270 days
from the date the Registration Statement is declared effective by the
Securities and Exchange Commission (the "Commission")], $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 amount realized
by Momentum or which could have been realized by Momentum upon the sale of
2,500,000 shares of Common Stock issued to Momentum upon consummation of the
Momentum Agreement 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 20, 1995 on the weighted average daily differences
between $5,000,000 and the aggregate proceeds received by Momentum upon the
sale of the 2,500,000 shares of Common Stock offered hereby, which were issued
to Momentum at the closing of the Momentum Agreement.
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 amount realized by Momentum or which could have been
realized by Momentum upon the sale of the shares of Common Stock issued to
Momentum at Maturity I and (y) average trading price of the Common Stock during
the period between December 21, 1995 and _____________, 1996 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 a sufficient number of authorized but unissued shares of Common
Stock available to allow the Company to convert the amount due at Maturity I
into shares of Common Stock. 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 is 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.
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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 1/2 per share to a low of $1 3/8 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 affect 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. At this time, however, it is impossible for HSW to estimate the costs of
the cleanup at the Aneth Gas Plant facility or the amount of indemnification
the prior owner will provide to the present owners, including HSW, for the
costs of the remediation work.
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.
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,
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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 reserves in the Alcaravan
and Playero contract areas of the Llanos Basin and the Bocachico and Cambulos
contract areas of the Middle Magdalena Basin of Colombia may 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.
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 (if any) 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 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
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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 Stockholder.
8
<PAGE> 10
SELLING STOCKHOLDER
This Prospectus covers the offer and sale of the Shares by the Selling
Stockholder. Set forth below is the name of the Selling Stockholder, the
nature of any position, office or other material relationship that the Selling
Stockholder 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 Stockholder as of the date of this Prospectus, the number of shares of
Common Stock which may be offered by the Selling Stockholder 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 Stockholder upon
completion of the offering if all of the Shares held by the Selling Stockholder
are sold. Any or all of the Shares listed below may be offered for sale by the
Selling Stockholder from time to time.
<TABLE>
<CAPTION>
Percent of
Shares Owned Shares Shares Owned Common Stock
Selling Prior to the Offered After the Owned After the
Stockholder Offering Hereby Offering(1) Offering(1)
- ------------------------ -------------- ------------ --------------- ------------------
<S> <C> <C> <C> <C>
Momentum Operating Co. 2,500,000 2,500,000 -0-(2) 0.0%(2)
</TABLE>
- --------------------
(1) Assumes no other disposition or acquisition of Common Stock and all
Shares included herein are sold.
(2) Pursuant to the Momentum Agreement, Momentum may be issued an
undetermined number of shares of Common Stock in the future. See "Plan of
Distribution."
9
<PAGE> 11
PLAN OF DISTRIBUTION
The Company will not receive any proceeds from the sale of Common
Stock owned by the Selling Stockholder. It is anticipated that the Selling
Stockholder 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 Stockholder.
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 Stockholder or the purchasers of the securities offered hereby for
whom they may act as agent.
The net proceeds to the Selling Stockholder 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.
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 a Registration Rights Agreement between the
Company and Momentum, the Company has agreed to file a "shelf" registration
statement (the "First Registration Statement") pursuant to Rule 415 under the
Securities Act covering the sale of 2,500,000 shares of Common Stock issued to
Momentum pursuant to the Momentum Agreement, and to use its best efforts to
maintain the effectiveness of the First Registration Statement for no less than
270 days from the date of effectiveness of the First Registration Statement.
The Registration Statement of which this Prospectus forms a part constitutes
the First Registration Statement.
Pursuant to the Momentum Agreement, the Company issued to Momentum
the Note in the principal amount of $13,000,000. On ,1996,
$8,000,000 in principal amount of the Note will mature and become payable
("Maturity I") and the remaining $5,000,000 in principal amount of the Note
will mature and become payable on July 15, 1997 ("Maturity II"); 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 the Second Registration Statement (as defined below) effective or (ii)
November 15, 1997. The Company has the option to pay the amounts due at
Maturity I and Maturity II in shares of Common Stock, with the number of shares
to be issued to be determined by dividing the amount due at Maturity I or
Maturity II, as applicable, by the average market value of the Common Stock
during a defined trading period. On or before 30 days subsequent to the
expiration of 270 days from the date of effectiveness of the First Registration
Statement, Harken has agreed to file a second "shelf" registration statement
(the "Second Registration Statement") pursuant to Rule 415 under the Securities
Act covering all of the shares of Common Stock issued to Momentum at Maturity
I, if any, and to use its best efforts to maintain the effectiveness of the
Second Registration Statement for no less than 270 days from the date of
effectiveness of the Second Registration Statement. On or before 30 days
subsequent to the expiration of 270 days from the date of effectiveness of the
Second Registration Statement, Harken has agreed to file a third "shelf"
registration statement (the "Third Registration Statement") pursuant to Rule
415 under the Securities Act covering the sale of all of the shares of Common
Stock issued to Momentum at Maturity II, if any, and to use its best efforts to
maintain the effectiveness of the Third Registration Statement for no less than
270 days from the date of effectiveness of the Third Registration Statement.
10
<PAGE> 12
Under the terms of the Registration Rights Agreement, the Company has
agreed to bear certain expenses of registration of the Shares under the federal
and state securities laws (currently estimated to be $25,000) 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 Registration Rights Agreement, the Company has agreed
to indemnify the Selling Stockholder against certain liabilities, including
liabilities under the Securities Act, or to contribute to payments the Selling
Stockholder 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.
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 (i) consolidated financial statements and schedules of the Company
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, (ii) financial statements of the CHAP Venture as of December
31, 1993, included in the Company's Current Report on Form 8-K dated November
4, 1994, as amended by the Company's Current Report on Form 8-K/A filed on
January 3, 1995, (iii) the statements of revenues and direct operating expenses
of the Yellowhouse Properties for the years ended December 31, 1992, 1993 and
1994, included in the Company's Current Report on Form 8-K dated October 5,
1995, as amended by the Company's Current Report on Form 8-K-A filed on
December 1, 1995, and (iv) the statements of revenues and direct operating
expenses of the Momentum Properties for the years ended December 31, 1992,
1993, and 1994, included in the Company's Current Report on Form 8-K dated
December 21, 1995, each of which are incorporated by reference herein, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
The consolidated financial statements of Search for the year ended
December 31, 1994, included in the Company's Current Report on Form 8-K dated
June 2, 1995, as amended by the Company's Current Report on Form 8-K/A filed on
August 3, 1995, which is incorporated by reference herein, have been audited by
Hein + Associates LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
11
<PAGE> 13
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:
<TABLE>
<S> <C>
Commission Registration Fee . . $ 1,455.00
AMEX Listing Fee . . . . . . . 17,500.00
Printing and Engraving Expenses 2,000.00
Accounting Fees and Expenses . 2,000.00
Blue Sky Fees and Expenses . . 1,000.00
Miscellaneous . . . . . . . . . 1,045.00
-------------------
Total . . . . . . $25,000.00
===================
</TABLE>
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.
II-1
<PAGE> 14
ITEM 16. EXHIBITS.
4.1 - Form of certificate representing shares of Harken common
stock, par value $.01 per share (filed as Exhibit 1 to
Harken's Registration Statement on Form 8-A, File No.
0-9207, and incorporated by reference herein).
4.2 - Certificate of 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 Hein + Associates LLP.
*23.3 - Consent of Gregory S. Porter, Esq. (included in opinion
filed as Exhibit 5.1).
*24.1 - Powers of Attorney.
99.1 - Registration Rights Agreement, dated as of December 15,
1995, by and among Harken Energy Corporation and Momentum
Operating Co. (filed as Exhibit 99.2 to Harken's Current
Report on Form 8-K dated December 21, 1995, File No. 0-9207,
and incorporated by reference herein).
_____________
* 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;
II-2
<PAGE> 15
(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.
(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> 16
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 January 16, 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 January 16, 1996
------------------------------- Executive Officer (Principal
Mikel D. Faulkner Executive Officer)
* President and Chief Operating January 16, 1996
------------------------------- Officer and Director
Richard H. Schroeder
* Senior Vice President and Chief January 16, 1996
------------------------------- Financial Officer (Principal
Bruce N. Huff Accounting Officer and Principal
Financial Officer)
* Director January 16, 1996
-------------------------------
Michael M. Ameen, Jr.
* Director January 16, 1996
-------------------------------
Michael R. Eisenson
</TABLE>
II-4
<PAGE> 17
<TABLE>
<S> <C> <C>
Director
-------------------------------
Edwin C. Kettenbrink, Jr.
* Director January 16, 1996
-------------------------------
Talat M. Othman
* Director January 16, 1996
-------------------------------
Donald W. Raymond
* Director January 16, 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> 18
INDEX TO EXHIBITS
Sequentially
Exhibit No. Exhibit Numbered Page
- ----------- --------------------------------------------------- -------------
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 Hein + Associates LLP.
*23.3 Consent of Gregory S. Porter, Esq. (included in
opinion filed as Exhibit 5.1).
*24.1 Powers of Attorney.
99.1 Registration Rights Agreement, dated as of December
15, 1995, by and among Harken Energy Corporation and
Momentum Operating Co. (filed as Exhibit 99.2 to
Harken's Current Report on Form 8-K dated December
21, 1995, File No. 0-9207, and incorporated by
reference herein).
_____________
* Filed herewith
<PAGE> 1
January 16, 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 2,500,000 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> 2
Harken Energy Corporation
January 16, 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> 1
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 10, 1995, included in Harken Energy Corporation's Form 10-K for the
year ended December 31, 1994, of our report dated December 22, 1994, on the
financial statements of the CHAP Venture as of and for the year ended December
31, 1993, included in Harken Energy Corporation's Form 8-K/A dated January 3,
1995; of our report dated November 6, 1995, on the statements of revenue and
direct operating expenses of Yellowhouse Properties for the three years in the
period ended December 31, 1994, included in Harken Energy Corporation's Form
8-K-A dated December 1, 1995; and of our report dated November 13, 1995, on the
statements of revenue and direct operating expenses of Momentum Properties for
the three years in the period ended July 31, 1995, included in Harken Energy
Corporation's Form 8-K dated December 21, 1995, and to all references to our
Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Dallas, Texas
January 15, 1996
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in the Registration Statement on
Form S-3 of Harken Energy Corporation of our report dated February 10, 1995,
accompanying the consolidated financial statements of Search Exploration, Inc.
incorporated by reference in such Registration Statement, and to the use of our
name and the statements with respect to us, as appearing under the heading
"Experts" in the Registration Statement.
/s/ HEIN + ASSOCIATES LLP
HEIN + ASSOCIATES LLP
January 10, 1996
Dallas, Texas
<PAGE> 1
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 2,500,000 shares of Common Stock,
$0.01 par value, of Harken Energy Corporation, 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 15th day of November, 1995.
<TABLE>
<CAPTION>
NAME CAPACITIES
<S> <C>
/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
Bruce N. Huff (Principal Financial and Accounting Officer)
/s/ Richard H. Schroeder President, Chief Operating Officer
---------------------------------- and Director
Richard H. Schroeder
</TABLE>
<PAGE> 2
POWER OF ATTORNEY
November 15, 1995
Page 2
<TABLE>
<S> <C>
/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
Director
----------------------------------
Edwin C. Kettenbrink, Jr.
/s/ Gary B. Wood Director
----------------------------------
Gary B. Wood
</TABLE>
