<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 21, 1995
HARKEN ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-9207 95-2841597
(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
5605 N. MACARTHUR BLVD, SUITE 400 75038
IRVING, TEXAS 75038 (ZIP Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (214) 753-6900
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 15, 1995, Harken Energy Corporation (the "Company")
entered into a Purchase and Sale Agreement (the "Purchase and Sale Agreement")
with Harken Exploration Company, a wholly owned subsidiary of the Company
("Harken Exploration"), and Momentum Operating Co., Inc. ("Momentum"). The
transactions contemplated by the Purchase and Sale Agreement were consummated
on December 21, 1995. Pursuant to the Purchase and Sale Agreement, Harken
Exploration acquired all of Momentum's working interests in certain producing
oil and gas leases located on approximately 6,800 acres in Hutchison County,
Texas, a gas gathering system located thereon, property and equipment related
thereto and the surface rights to a 161 acre tract of land (the "Properties"),
in exchange for 2,500,000 shares of common stock, $.01 par value per share (the
"Common Stock") of the Company (the "Purchase Shares"), $2,500,000 in cash and
a promissory note of Harken Exploration (the "Note") in the principal amount of
$13,000,000.
The Note bears interest at 5% per annum as to $8,000,000 in principal
amount only, is secured by Harken Exploration's interest in the Properties (but
is otherwise a non-recourse note) and has not been guaranteed by the Company.
The Note matures and becomes payable in two stages. Upon the earlier of (i)
the expiration of 270 days following the date upon which the Securities and
Exchange Commission (the "Commission") declares the First Registration
Statement (as defined below) effective or (ii) January 15, 1997, $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 as
described below, 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.
Pursuant to the Purchase and Sale Agreement, Harken Exploration may
elect to pay the amounts due at either or both of Maturity I and Maturity II in
shares of Common Stock, with the number of shares to be issued at Maturity I to
be determined by dividing the amount due at Maturity I by the average of the
closing prices of the Common Stock on the American Stock Exchange during the
period beginning upon the date which the First Registration Statement is
declared effective and ending ten (10) trading days prior to Maturity I (the
"Maturity I Average Trading Price") and the number of shares to be issued at
Maturity II to be determined by dividing the amount due at Maturity II by the
average of the closing prices of the Common Stock on the American Stock
Exchange during the period beginning upon the date which the Second
Registration Statement is declared effective and ending ten (10) trading days
prior to Maturity II (the "Maturity II Average Trading Price").
The Purchase Shares issued to Momentum have not been registered under
the Securities Act of 1933 (the "Securities Act"), and were issued in reliance
upon exemptions from registration
2
<PAGE> 3
available under the Securities Act. Such shares are "restricted securities"
within the meaning of Rule 144 promulgated by the Commission under the
Securities Act and may not be sold, transferred, or otherwise disposed of
unless they are registered or sold, transferred, or otherwise disposed of
pursuant to an exemption from registration.
Pursuant to the terms of a Registration Rights Agreement between the
Company and Momentum executed concurrently with the Purchase and Sale
Agreement, 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 by Momentum of the Purchase Shares no later than January 20,
1996, and to use diligent efforts to maintain the effectiveness of the First
Registration Statement for the shorter of (i) 270 days from the date of
effectiveness of the First Registration Statement, or (ii) the date on which
all of the Purchase shares have been sold by Momentum. If the amount due at
Maturity I is paid in shares of Common Stock, Harken has agreed to file a
second "shelf" registration statement (the "Second Registration Statement")
pursuant to Rule 415 under the Securities Act on or before the expiration of 30
days following Maturity I, covering all of the shares of Common Stock issued to
Momentum at Maturity I, and to use diligent efforts to maintain the
effectiveness of the Second Registration Statement for the shorter of (i) 270
days from the date of effectiveness of the Second Registration Statement, or
(ii) the date on which all of the shares of Common Stock covered by the Second
Registration Statement have been sold by Momentum. If the amounts due at
Maturity II are paid in shares of Common Stock, Harken has agreed to file a
third "shelf" registration statement (the "Third Registration Statement")
pursuant to Rule 415 under the Securities Act on or before the expiration of
30 days following Maturity II, covering the sale of all of the shares of Common
Stock issued to Momentum at Maturity II, and to use diligent efforts to
maintain the effectiveness of the Third Registration Statement for the shorter
of (i) 270 days from the date of effectiveness of the Third Registration
Statement, or (ii) the date on which all of the shares of Common Stock covered
by the Third Registration Statement have been sold by Momentum.
The principal amount due at Maturity I is subject to adjustment as
follows: (i) the principal amount due will be reduced by an amount equal to (x)
the value of any title, mechanical or environmental defects with respect to the
Properties discovered by Harken Exploration after closing and (y) the amount of
costs, expenses, or losses suffered by Harken Exploration as a result of a
breach of Momentum's representations and warranties contained in the Purchase
and Sale Agreement, up to a maximum of $800,000; (ii) the principal amount will
be adjusted in an amount equal to the difference between $500,000 and the net
revenue received by Momentum with respect to the Properties between July 1,
1995 and December 21, 1995; (iii) the principal amount will be adjusted in an
amount equal to the difference between (x) the greater of the amount realized
by Momentum upon the sale of the Purchase Shares or the amount which could have
been realized by Momentum if the Purchase Shares were sold at the Maturity I
Average Trading Price and (y) $2.00 per share multiplied by the number of
shares of Common Stock sold by Momentum between December 20, 1995 and Maturity
I; (iv) the principal amount will be increased by a factor equal to 10% per
annum of the weighted average of the daily differences between $5,000,000 and
the
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aggregate proceeds received by Momentum upon the sale of the Purchase Shares;
and (v) the principal amount will be increased by $200,000.
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 Maturity II Average Trading Price and (y) 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 equal to 10% per annum of the weighted average of the daily
differences 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.
Each of the Purchase and Sale Agreement, the Note, and the
Registration Rights Agreement, attached hereto as Exhibits 2.1, 99.1 and 99.2
respectively, is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
4
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Harken Energy Corporation:
We have audited the accompanying statements of revenues and direct operating
expenses of Momentum Properties for the fiscal years ended July 31, 1993, 1994,
and 1995. These statements of revenues and direct operating expenses are the
responsibility of Harken Energy Corporation's management. Our responsibility
is to express an opinion on these statements of revenues and direct operating
expenses based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements of revenues and direct
operating expenses are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statements of revenues and direct operating expenses. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the
statements of revenues and direct operating expenses. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the statements of revenues and direct operating expenses
referred to above present fairly, in all material respects, the revenues and
direct operating expenses of Momentum Properties as of July 31, 1993, 1994, and
1995, in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Dallas, Texas,
November 13, 1995
5
<PAGE> 6
MOMENTUM PROPERTIES
STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES
FOR THE FISCAL YEARS ENDED JULY 31, 1993, 1994, AND 1995,
AND FOR THE THREE-MONTH PERIODS ENDED OCTOBER 31,
1994 AND 1995 (In thousands)
<TABLE>
<CAPTION>
Three-Month
Fiscal Years Ended Periods Ended
July 31, October 31,
---------------------------------- --------------------
1993 1994 1995 1994 1995
-------- -------- -------- -------- --------
(Unaudited)
<S> <C> <C> <C> <C> <C>
REVENUES:
Oil $ 156 $ 138 $ 217 $ 61 $ 36
Gas 812 920 1,110 277 297
------- ------- ------- -------- --------
968 1,058 1,327 338 333
------- ------- ------- -------- --------
DIRECT OPERATING EXPENSES:
Production and other expenses 182 191 190 52 39
Taxes on production 71 76 94 24 24
------- ------- ------- -------- --------
Total 253 267 284 76 63
------- ------- ------- -------- --------
EXCESS OF REVENUES OVER DIRECT
OPERATING EXPENSES $ 715 $ 791 $ 1,043 $ 262 $ 270
======= ======= ======= ======== ========
</TABLE>
See notes to statements of revenues and direct operating expenses.
6
<PAGE> 7
MOMENTUM PROPERTIES
NOTES TO STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES
1. BASIS OF PRESENTATION:
On December 15, 1995, Harken Energy Corporation (the "Company") and Harken
Exploration Company, a wholly owned subsidiary of the Company, entered into an
agreement, effective July 1, 1995, with Momentum Operating Co., Inc. to acquire
certain oil and gas producing properties ("Momentum Properties") in exchange
for, among other consideration, 2,500,000 shares of the Company's restricted
common stock, $2,500,000 cash consideration, and a note payable for
$13,000,000. The closing of these transactions occurred on December 21, 1995.
Eight million dollars of the $13,000,000 note payable bears interest at 5% per
annum, is payable in either cash or shares of the Company's restricted common
stock, and matures on the earlier of (i) nine months following the date of
effectiveness of the registration statement for the shares of the Company's
restricted common stock issued at closing or (ii) January 15, 1997 (the "First
Maturity Date"). The remaining $5,000,000 of the $13,000,000 note payable is
non-interest bearing, is payable in either cash or shares of the Company's
restricted common stock, and matures on July 15, 1997; provided, however, that
if the amount due at the First Maturity Date is paid in shares of the Company's
restricted common stock, such amount shall mature on the earlier of (i) nine
months following the date of effectiveness of the registration statement for
the shares of the Company's restricted common stock issued at the First
Maturity Date or (ii) November 15, 1997. The total purchase price was allocated
to producing properties. The producing interests in approximately 52 wells
consist entirely of operated interests in the panhandle region of Texas.
The accompanying statements of revenues and direct operating expenses do not
include general and administrative expense, interest income or expense, a
provision for depreciation, depletion and amortization or any provision for
income taxes because the property interests acquired represent only a portion
of a business and the costs incurred by Momentum Operating Co., Inc. are not
necessarily indicative of the costs to be incurred by the Company. In
addition, the accompanying statements of revenues and direct operating expenses
do not include any operating overhead costs as Momentum Operating Co., Inc.
operates all of the Momentum Properties and did not allocate internal overhead
costs incurred by Momentum Operating Co., Inc. to the properties. The
accompanying statements of revenue and direct operation expenses are presented
for the fiscal years ended July 31, 1993, 1994 and 1995 as this is the fiscal
year end of Momentum Operating Co. Inc.
Historical financial information reflecting financial position, results of
operations, and cash flows of the Momentum Properties is not presented because
the acquisition cost was assigned to the oil and gas property interests
acquired. Accordingly, the historical statements of revenues and direct
operating expenses have been presented in lieu of the financial statements
required under Rule 3-05 of Securities and Exchange Commission Regulation S-X.
2. SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (unaudited):
Estimated Quantities of Proved Oil and Gas Reserves
Reserve information presented below has been estimated using October 31, 1995,
prices and costs. Proved reserves are estimated quantities of crude oil and
natural gas which, based on geologic and engineering data, are estimated to be
reasonably recoverable in future years from known reservoirs under existing
economic and operating conditions. Proved developed reserves are those which
are expected to be recovered through existing wells with existing equipment and
operating methods. Because of inherent uncertainties and the limited nature of
reservoir data, such estimates are subject to change as additional information
becomes available.
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<PAGE> 8
The proved oil and gas reserves at October 31, 1995, are as follows:
<TABLE>
<CAPTION>
Oil (Mbbls) Gas (Mmcf)
----------- ----------
<S> <C> <C>
Proved reserves 863 24,102
Proved developed reserves 131 4,935
</TABLE>
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil
and Gas Reserves
The standardized measure of discounted future net cash flows ("Standardized
Measure") is prepared using assumptions required by the Financial Accounting
Standards Board. Such assumptions include the use of period-end prices for oil
and gas and period-end costs for estimated future development and production
expenditures to produce period-end estimated proved reserves. Discounted
future net cash flows are calculated using a 10% discount rate.
The Standardized Measure does not represent the Company's estimate of future
net cash flows or the value of proved oil and gas reserves. Furthermore,
period-end prices, used to determine the Standardized Measure, are influenced
by seasonal demand and other factors and may not be the most representative in
estimating future revenues or reserve data.
The Standardized Measure at October 31, 1995, is as follows (in thousands):
<TABLE>
<S> <C>
Future cash inflows $ 97,772
Future costs-
Production (17,254)
Development (8,161)
--------
Future net cash flows 72,357
10% annual discount (29,649)
--------
Standardized Measure before income taxes $ 42,708
========
</TABLE>
8
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(b) Pro forma financial information.
The following unaudited pro forma combined condensed financial
statements give effect to the December 21, 1995, acquisition by Harken
Exploration Company, a subsidiary of Harken Energy Corporation ("Harken"), of
certain oil and gas producing properties ("Momentum Properties") in exchange
for, among other consideration, 2,500,000 shares of restricted Harken common
stock, $2,500,000 cash consideration and a note payable in the face amount of
$13,000,000. In addition, the unaudited pro forma combined condensed financial
statements also reflect the October 5, 1995, acquisition of certain oil and gas
properties ("Yellowhouse Properties"), as well as the May 12, 1995, issuance of
European 8% Senior Convertible Notes in the amount of $15,000,000, the May 22,
1995, merger with Search Exploration, Inc. ("Search"), and the October 1994
acquisition of an additional 20.35625% interest in the CHAP Joint Venture (the
"Prior Transactions").
The pro forma combined condensed balance sheet gives effect to the acquisition
of the Momentum Properties and the Yellowhouse Properties as if they had been
consummated as of September 30, 1995. The pro forma combined condensed
statements of operations for the year ended December 31, 1994, and for the nine
months ended September 30, 1995, give effect to all transactions as if each had
been consummated at the beginning of each period.
The pro forma information is presented for illustrative purposes only and is
not necessarily indicative of the financial position or operating results that
would have occurred had the transactions been consummated at the dates
indicated, nor are they indicative of future financial position or operating
results.
9
<PAGE> 10
HARKEN ENERGY CORPORATION
PRO FORMA COMBINED CONDENSED BALANCE SHEET--SEPTEMBER 30, 1995
(Unaudited)
(In thousands of dollars)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Adjustments- Adjustments-
Harken Yellowhouse Momentum
ASSETS Actual Properties(1) Properties(2) Pro Forma
------ ------------ ------------- ------------- ---------
<S> <C> <C> <C> <C>
CURRENT ASSETS $ 9,059 $ 345 $ - $ 9,404
PROPERTY AND EQUIPMENT, net 27,363 4,426 20,790 52,579
RESTRICTED CASH IN EUROPEAN
SEGREGATED ACCOUNT 9,674 - (2,500) 7,174
INVESTMENTS IN FORMER
SUBSIDIARIES 1,219 - - 1,219
NOTES RECEIVABLE FROM
RELATED PARTIES, including interest 232 - - 232
OTHER ASSETS, net 1,846 - - 1,846
-------- ------- -------- --------
Total assets $ 49,393 $ 4,771 $ 18,290 $ 72,454
======== ======= ======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
--------------------
CURRENT LIABILITIES $ 4,556 $ 580 $ 346 $ 5,482
LONG-TERM DEBT 13,300 - 12,944 26,244
REDEEMABLE PREFERRED STOCK 1,868 - - 1,868
STOCKHOLDERS' EQUITY 29,669 4,191 5,000 38,860
-------- ------- -------- --------
Total liabilities and
stockholders' equity $ 49,393 $ 4,771 $ 18,290 $ 72,454
======== ======= ======== ========
</TABLE>
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HARKEN ENERGY CORPORATION
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(Unaudited)
(In thousands of dollars)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Adjustments- Adjustments-
Harken Search Prior Momentum
Actual Actual Transactions Properties Pro Forma
----------- ------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
OIL AND GAS REVENUES $ 4,189 $ 188 1,510(7) $ 982 (1) $ 6,869
OTHER REVENUES 992 - (90)(2) 902
----------- ------- ------ ------ -----------
Total revenues 5,181 188 1,510 892 7,771
OIL AND GAS OPERATING
EXPENSE 1,343 79 665(7) 214 (3) 2,301
GENERAL AND
ADMINISTRATIVE EXPENSE 2,285 236 123(7) 81 (4) 2,725
DEPRECIATION AND
AMORTIZATION 1,810 18 651(9) 346 (5) 2,825
INTEREST EXPENSE AND
OTHER 322 19 462(8) 713 (6) 1,516
----------- ------- ------ ------ -----------
Total expenses 5,760 352 1,901 1,354 9,367
----------- ------- ------ ------ -----------
INCOME/(LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES (579) (164) (391) (462) (1,596)
INCOME TAX EXPENSE - - - - -
----------- ------- ------ ------ -----------
INCOME/(LOSS) FROM
CONTINUING OPERATIONS $ (579) $ (164) $ (391) $ (462) $ (1,596)
=========== ======= ====== ====== ===========
Net loss per share from
continuing operations
attributable to common
stock $ (0.01) $ (0.02)
=========== ===========
Weighted average shares
outstanding 63,052,443 69,924,089
=========== ===========
</TABLE>
11
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HARKEN ENERGY CORPORATION
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(Unaudited)
(In thousands of dollars)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Acquired Adjustments- Adjustments-
Harken Interest in Search Prior Momentum
Actual CHAP-Actual Actual Transactions Properties Pro Forma
----------- ----------- ------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
OIL AND GAS REVENUES $ 4,156 $ 1,035 $ 495 $ 2,154 (7) $ 1,252 (1) $ 9,092
OTHER REVENUES 739 39 221 (120)(2) 879
----------- ------- ------- ------- ------- ----------
Total revenues 4,895 1,074 716 2,154 1,132 9,971
OIL AND GAS OPERATING EXPENSE 1,535 337 274 940 (7) 335 (3) 3,421
GENERAL AND ADMINISTRATIVE
EXPENSE 3,132 96 698 166 (7) 108 (4) 4,200
DEPRECIATION AND AMORTIZATION 1,993 416 499 157 (9) 416 (5) 3,481
PROVISION FOR ASSET IMPAIRMENTS 6,361 - 2,667 (2,667)(9) - 6,361
INTEREST EXPENSE AND OTHER 85 - 5 1,779 (8) 846 (6) 2,715
----------- ------- ------- ------- ------- ----------
Total expenses 13,106 849 4,143 375 1,705 20,178
----------- ------- ------- ------- ------- ----------
INCOME/(LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES (8,211) 225 (3,427) 1,779 (573) (10,207)
INCOME TAX EXPENSE/(BENEFIT) - - (227) 227 (10) - -
----------- ------- ------- ------- ------- ----------
INCOME/(LOSS) FROM CONTINUING
OPERATIONS $ (8,211) $ 225 $(3,200) $ 1,552 $ (573) $ (10,207)
=========== ======= ======= ======= ======= ==========
Net loss per share from continuing
operations attributable to common
stock $ (0.14) $ (0.15)
=========== ==========
Weighted average shares
outstanding 59,722,853 68,345,609
=========== ==========
</TABLE>
12
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HARKEN ENERGY CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS
PRO FORMA ADJUSTMENTS - PRO FORMA COMBINED CONDENSED BALANCE SHEET:
(1) Pro forma entry to record the acquisition of Yellowhouse Properties at
September 30, 1995, in exchange for 3,000,000 shares of restricted Harken
common stock previously held as treasury stock. Harken also issued
1,000,000 warrants to purchase additional shares of restricted Harken
common stock at $2 per share, and also issued 82,759 shares of restricted
Harken common stock previously held as treasury stock to a financial
advisor in connection with the acquisition. The purchase price was
calculated using the market value, discounted by 25%, of the shares
issued in the acquisition. In addition, Harken assumed certain
short-term notes payable with a remaining balance of $333,000. The
purchase price was allocated entirely to the Yellowhouse Properties
proved reserves and includes $100,000 of estimated transaction costs. In
addition, certain closing adjustments have been reflected in the pro
forma balance sheet including $345,000 of cash and other current assets
and $147,000 of current liabilities related to the acquired properties.
(2) Pro forma entry to record the acquisition of Momentum Properties at
September 30, 1995, in exchange for, among other consideration,
$2,500,000 in cash, a note payable in the face amount of $13,000,000, and
2,500,000 shares of Harken common stock. The purchase price was
calculated by recording the note payable at its discounted fair value,
using a market rate of interest. The recorded amount of the note
payable, which is payable at Harken's election in either cash or shares
of Harken common stock, also reflects certain estimated adjustments to be
made to the principal balance at its maturity dates. Additionally,
Harken has valued the 2,500,000 shares of Harken common stock issued at
closing at an undiscounted value of $2.00 per share, as Harken has
guaranteed such a sales proceeds value to the seller as part of the
adjusted principal value of the note payable. The purchase price was
allocated entirely to the Momentum Properties proved reserves and
includes $150,000 of estimated transaction costs. In addition, certain
closing adjustments have been reflected in the pro forma balance sheet.
PRO FORMA ADJUSTMENTS - PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS:
(1) Pro forma entry to reflect the actual revenues of the Momentum
Properties.
(2) Pro forma entry to reflect the reduction in interest income earned due to
the $2,500,000 cash consideration to be paid at closing of the
acquisition of the Momentum Properties.
(3) Pro forma entry to reflect the estimated increase in production expenses
attributable to the Momentum Properties, including historical production
expenses of $178,000 and $287,000 for the nine months ended September 30,
1995, and for the year ended December 31, 1994, respectively, and
operating costs expected to be incurred by Harken which were not included
in the historical statements of revenues, and direct operating expenses
of $36,000 and $48,000 for the nine months ended September 30, 1995, and
for the year ended December 31, 1994, respectively, consisting of $4,000
per month in pumper and related expenses that have been incurred in
connection with operating the Momentum Properties.
(4) Pro forma entry to reflect estimated increase in general and
administrative expenses attributable to the Momentum Properties. The
additional general and administrative expenses consist of $24,000 for the
annual cost of a new field office in the panhandle region and $84,000
related to newly hired operating and administrative employees to serve
the Momentum Properties.
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(5) Pro forma entry to reflect depreciation and depletion expense on oil and
gas properties for the Momentum Properties calculated on a consolidated
basis.
(6) Pro forma entry to record the accretion of interest expense related to
the discounted fair value of the note payable issued by Harken as part of
the acquisition of Momentum Properties.
(7) Pro forma entry to reflect the actual revenues and direct operating
expenses primarily of the Yellowhouse Properties.
(8) Pro forma entry to reflect interest expense incurred primarily on the
European 8% Senior Convertible Notes.
(9) Pro forma entry to adjust actual depreciation and depletion expense and
valuation provision on oil and gas properties for the Yellowhouse
Properties, Search, and the acquired interest in CHAP Joint Venture
calculated on a consolidated basis.
(10) Pro forma entry to eliminate income tax benefit of Search.
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(c) Exhibits.
Exhibit
Number Description
------- -----------
* 2.1 -- Agreement of Purchase and Sale dated December 15,
1995, by and between Harken Energy Corporation,
Harken Exploration Company and Momentum Operating
Co., Inc.
* 99.1 -- Promissory Note of Harken Exploration Co., Inc.,
dated December 15, 1995, in the principal amount of
$13,000,000.
* 99.2 -- Registration Rights Agreement, dated as of December
15, 1995, by and among Harken Energy Corporation
and Momentum Operating Co., Inc.
____________________
*previously filed
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HARKEN ENERGY CORPORATION
Date: April 22, 1996 By: /s/ Bruce N. Huff
----------------------------------
Bruce N. Huff,
Senior Vice President and
Chief Financial Officer
16
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit No. Exhibit Page
- ------------ ---------------------------- ------------
<S> <C> <C>
* 2.1 Agreement of Purchase and Sale dated December 15, 1995,
by and between Harken Energy Corporation, Harken
Exploration Company and Momentum Operating Co., Inc.
* 99.1 Promissory Note of Harken Exploration Co., Inc., dated
December 15, 1995, in the principal amount of
$13,000,000.
* 99.2 Registration Rights Agreement, dated as of December 15,
1995, by and among Harken Energy Corporation and Momentum
Operating Co., Inc.
</TABLE>
____________________
*previously filed
17
