<PAGE> 1
As filed with the Securities and Exchange Commission on February 4, 1999
Registration No. _________
================================================================================
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
(972) 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
(972) 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>
<CAPTION>
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TITLE OF EACH CLASS OF SHARES AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED TO BE AGGREGATE AGGREGATE OFFERING REGISTRATION
REGISTERED PRICE PER SECURITY (1) PRICE (1) FEE (1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share 1,350,000 $2.00 $2,700,000 $818.18
- ----------------------------------------------------------------------------------------------------------------------------------
Preferred Stock Purchase Rights 1,350,000 Not Applicable Not Applicable -- (2)
==================================================================================================================================
</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
February 1, 1999.
(2) In accordance with Rule 457(g), no additional registration fee is required
in respect of the Preferred Stock Purchase Rights.
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.
================================================================================
<PAGE> 2
SUBJECT TO COMPLETION DATED FEBRUARY 4, 1999
PROSPECTUS
1,350,000 Shares
HARKEN ENERGY CORPORATION
Common Stock
------------
Parkcrest Explorations, Ltd. is offering for sale 1,350,000 shares of
Common Stock of Harken Energy Corporation. The shares of Common Stock being
offered for sale by Parkcrest include preferred stock purchase rights attached
to the Common Stock under Harken's Stockholder Rights Plan. Harken will not
receive any of the proceeds from the sale of the 1,350,000 shares of Common
Stock.
The Common Stock is traded on the American Stock Exchange, under the
symbol "HEC." On February 1, 1999, the closing sales price of the Common Stock
as was $2.00 per share.
Parkcrest will receive the purchase price of the shares of Common Stock
sold less any commissions and underwriters' discounts. Parkcrest will be
responsible for any commissions or underwriters' discounts. You can find more
information about Parkcrest in this document under the heading "Information
About Parkcrest."
PROSPECTIVE INVESTORS SHOULD CONSIDER AND REVIEW THE INFORMATION UNDER
THE HEADING "RISK FACTORS" BEGINNING ON PAGE 3 PRIOR TO INVESTING IN THE COMMON
STOCK.
------------
Neither the Securities and Exchange Commission nor any State Securities
Commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
------------
The date of this Prospectus is February __, 1999.
The information in this prospectus is not complete and may be changed.
Parkcrest may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and neither we nor Parkcrest are soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Get More Information......................................... 2
The Company................................................................ 4
Risk Factors............................................................... 4
Use of Proceeds............................................................ 8
Information About Parkcrest................................................ 9
Plan of Distribution....................................................... 10
Legal Matters.............................................................. 11
Experts.................................................................... 11
</TABLE>
YOU SHOULD RELY ONLY ON THE INFORMATION IN THIS PROSPECTUS AND THE
ADDITIONAL INFORMATION DESCRIBED UNDER THE HEADING "WHERE YOU CAN GET MORE
INFORMATION." WE HAVE NOT AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH
DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR INCONSISTENT
INFORMATION, YOU SHOULD NOT RELY ON IT. NEITHER WE NOR PARKCREST ARE MAKING AN
OFFER TO SELL THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS
NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION IN THIS PROSPECTUS AND THE
ADDITIONAL INFORMATION DESCRIBED UNDER THE HEADING "WHERE YOU CAN GET MORE
INFORMATION" WAS ACCURATE ON THE DATE ON THE FRONT COVER OF THE PROSPECTUS ONLY.
OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE
CHANGED SINCE THAT DATE.
WHERE YOU CAN GET MORE INFORMATION
Harken files reports, proxy statements, and other information with the
Securities and Exchange Commission (the "SEC"). Such reports, proxy statements
and other information concerning Harken can be read and copied at the SEC's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
room. The SEC maintains an Internet site at http://www.sec.gov that contains
reports, proxy statements and other information regarding issuers that file
information electronically, including Harken. Harken's Common Stock is listed on
the American Stock Exchange. These reports, proxy statements and other
information can also be read and copied at the offices of the American Stock
Exchange at 86 Trinity Place, New York, New York 10006.
The SEC allows Harken to "incorporate by reference" the information it
files with the SEC. This permits Harken to disclose important information to you
by referencing these filed documents. Any information referenced this way is
considered part of this prospectus, and any information filed with the SEC after
the date on the cover of this prospectus will automatically be deemed to update
and supercede this information. Harken incorporates by reference the following
documents which have been filed with the SEC:
(1) Annual Report on Form 10-K for the year ended December 31, 1997;
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1998;
(3) Quarterly Report on Form 10-Q for the quarter ended June 30, 1998;
(4) Quarterly Report on Form 10-Q for the quarter ended September 30,
1998;
(5) Proxy Statement for the Annual Meeting of Stockholders of Harken
held on June 15, 1998;
(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; and the description of the Company's Preferred Stock
Purchase Rights as contained in the Company's Registration
Statement on Form 8-A, filed with the Commission on April 7, 1998,
including all amendments and reports filed for the purpose of
updating such description;
(7) Current Report on Form 8-K dated April 7, 1998; and
(8) Current Report on Form 8-K dated May 27, 1998.
Harken also incorporates by reference any future filings made with the
SEC until Parkcrest sells all of the shares of Common Stock.
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<PAGE> 4
This prospectus is part of a registration statement filed with the SEC.
This prospectus does not contain all the information contained in the
registration statement. The full registration statement can be obtained from the
SEC. This prospectus contains a general description of Harken and the securities
being offered for sale. You should read this prospectus together with the
additional information incorporated by reference.
You can request a copy of any document incorporated by reference in this
prospectus in writing or by phone. Requests for copies should be directed to
Gregory S. Porter, Harken Energy Corporation, 5605 North MacArthur Blvd., Suite
400, Irving, Texas 75038 (Telephone: (972) 753-6900).
3
<PAGE> 5
THE COMPANY
Harken explores for, develops and produces oil and gas both domestically
and internationally. Harken's domestic operations are primarily located in the
Four Corners Area of Utah, Arizona and New Mexico, the Gulf Coast of Texas, the
Texas Panhandle, the Magnolia region of Arkansas, the Carlsbad region of New
Mexico and St. Martin and LaFourche Parishes in Louisiana. Harken's
international operations are primarily concentrated in the Republic of Colombia
and the Republic of Costa Rica.
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 (972) 753-6900.
RISK FACTORS
Prior to making an investment decision, prospective investors should
consider carefully all of the information in this Prospectus and should evaluate
the following risk factors.
VOLATILITY OF HARKEN COMMON STOCK TRADING PRICE
The price of Harken's Common Stock has fluctuated significantly over the
past 12 months, ranging from a high of $7.38 per share to a low of $1.56 per
share. Harken believes that the price of the Common Stock may fluctuate
significantly based upon the success or failure of Harken's exploration
activities in Colombia and Costa Rica.
LOSSES FROM CONTINUING OPERATIONS
Harken has reported losses in three out of the last four years. Harken
also reported a loss of approximately $27 million for the first nine months of
1998. Harken expects to report additional losses for the fourth quarter of 1998,
and may report additional losses in the future.
POTENTIAL DILUTION; EFFECT OF SALES OF COMMON STOCK ON MARKET PRICE
On February 1, 1999, there were 134,078,830 shares of Common Stock
outstanding. Harken also has contractual obligations that may require Harken to
issue a significant number of additional shares of Common Stock in the future.
If Harken issues additional shares of Common Stock, it could negatively effect
the market price of the Common Stock. Furthermore, if Harken issues additional
shares as described below, it could result in significant dilution to you.
Between October 1997 and March 1998, Harken entered into three separate
Development Finance Agreements with institutional investors. The institutional
investors provided $33 million to Harken to finance the drilling of three
prospects in Colombia. In exchange, the institutional investors will receive
future payments from Harken based on Harken's net profits from the three
prospects. Such future payments are commonly referred to as a "net profits
interest." The institutional investors have the right to convert the net profits
interest into shares of Common Stock. If the institutional investors convert the
net profits interest into shares of Common Stock, the number of shares of Common
Stock they will receive will be equal to the amount that the institutional
investors originally invested with Harken plus interest at 15% per year
compounded monthly divided by the market price of the Common Stock at the time
of conversion. Harken also has the right to convert the net profits interest
into shares of Common Stock. If Harken elects to covert the net profits interest
into shares of Common Stock, the number of shares that Harken will issue to the
institutional investors will be the same as if the institutional investors had
elected to convert the net profits interest, except that the interest
4
<PAGE> 6
rate will be 25% instead of 15%. Harken can also elect to pay cash upon a
conversion of the net profits interest instead of issuing shares of Common
Stock. In addition, if the institutional investors sell the shares of Common
Stock that they receive upon conversion of the net profits interest, Harken may
be required to issue the institutional investors additional shares of Common
Stock if the institutional investors are not able to recover their original
investment in Harken plus interest from the sale of the shares of Common Stock.
If the institutional investors elected to convert the net profits interest into
shares of Common Stock, and based upon the current market price of the Common
Stock of $2.00, Harken would be required to issue approximately 19 million
shares of Common Stock.
On May 26, 1998, Harken issued $85,000,000 of 5% Senior Convertible Notes
due 2003 (the "Notes"). The holders of the Notes can elect to covert the Notes
into shares of Common Stock at a conversion price of $6.50 per share. If all of
the Notes were converted into Common Stock, Harken would be required to issue
approximately 13.1 million shares of Common Stock.
In addition, Harken can require conversion of the Notes at any time after
May 26, 1999 if the average of the closing market price of the Common Stock over
any 30 calendar day period exceeds $8.13. Furthermore, Harken can redeem the
Notes at our option at any time after May 26, 2002 for the face amount of the
Notes. Beginning on November 26, 2002, Harken can also redeem up to 50% of the
Notes for shares of Common Stock, and on May 26, 2003, Harken may redeem all
remaining Notes for shares of Common Stock. If Harken redeems the Notes for
shares of Common Stock, the number of shares of Common Stock which Harken will
issue will be based upon the average of the closing market price of the Common
Stock over the 30 day period prior to the date Harken notifies the holders of
the Notes that it is redeeming the Notes (the "Average Market Price"). For each
$1,000 of principal amount of the Notes to be redeemed, Harken will issue the
number of shares of Common Stock according to the following formula:
o $1,100 divided by the Average Market Price if Harken's market
capitalization is greater than $500 million.
o $1,150 divided by the Average Market Price if Harken's market
capitalization is less than $500 million.
In addition, Harken has issued warrants to third parties which permit
them to purchase 1,830,624 shares of Common Stock, and Harken has granted its
employees and directors options to purchase 11,145,624 shares of Common Stock.
PREFERRED STOCK AUTHORIZED FOR ISSUANCE
Harken is permitted under its charter to issue up to ten million shares
of preferred stock. Harken can issue shares of its preferred stock in one or
more series and we can set the terms of the preferred stock without seeking any
further approval from you. Harken does not currently have any shares of
preferred stock outstanding. If Harken issues any shares of preferred stock, the
shares of preferred stock may have greater rights than the shares of Common
Stock.
5
<PAGE> 7
RISKS RELATED TO INTERNATIONAL OPERATIONS
A large part of Harken's business is in the Republic of Colombia and
the Republic of Costa Rica. Harken's operations in Colombia and Costa Rica are
subject to all of the risk associated with operating outside of the United
States including 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, in the event of a
dispute, Harken may be required to litigate the dispute in the courts of a
foreign country or Harken may not be able to sue foreign persons in United
States courts. Exploration and production activities in areas outside the United
States are also subject to the risks inherent in foreign operations, including
loss of revenue, property and equipment as a result of hazards such as
expropriation, nationalization, war, insurrection and other political risks.
Harken anticipates that full development of the oil and gas reserves in
Colombia and Costa Rica will take several years and may require extensive
production facilities which could require significant additional capital
expenditures. The ultimate amount of such expenditures cannot be presently
predicted. Harken anticipates that amounts required to fund its international
activities, including those in Colombia, will be funded from its existing cash
balances, asset sales, stock issuances, production payments, operating cash
flows and potentially from industry partners, but Harken can not assure you that
Harken will have adequate funds available to it to fund its international
activities. In addition, Harken faces certain deadlines for completing specific
projects in Colombia and Costa Rica. If Harken does not meet these deadlines,
Harken's business could be adversely effected.
UNCERTAINTIES IN UNITED STATES -- COLOMBIA RELATIONS
Under the Foreign Assistance Act of 1961, the President of the United
States is required to determine whether foreign countries have cooperated with
the United States to prevent drug trafficking. In 1995, 1996 and 1997, the
President determined that the Republic of Colombia had not taken sufficient
steps to prevent drug trafficking. As a result, the United States imposed
economic sanctions on Colombia, including withholding bilateral economic
assistance, blocking Export-Import Bank and Overseas Private Investment
Corporation loans and political risk insurance, and voting against multilateral
assistance to Colombia in the World Bank and the InterAmerican Development Bank.
In 1998, the President determined that Colombia had taken sufficient steps to
prevent drug trafficking and the economic sanctions were lifted. We can not
assure you the United States will not impose sanction on Colombia in the future.
Harken is not able to predict the consequences if the United States
imposes additional sanctions on Colombia in the future. The President also has
authority to impose far-reaching economic, trade and investment sanctions on
Colombia under the International Emergency Economic Powers Act of 1978. The
Colombian government's reaction to United States sanctions could potentially
include restrictions on the repatriation of profits and the nationalization of
Colombian assets owned by United States companies. Accordingly, imposition of
the foregoing economic and trade sanctions on Colombia could materially affect
the performance of the Common Stock and the Company's long-term financial
results.
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<PAGE> 8
INDUSTRY RISKS
Oil and Gas Price Volatility. Harken's revenues are highly dependent
upon the prices of crude oil and natural gas. Fluctuations in the energy market
make it difficult to estimate future prices of oil and natural gas. Fluctuations
in energy prices are caused by a number of factors, including regional, domestic
and international demand, energy legislation, federal or state taxes on sales of
crude oil and natural gas, production guidelines established by the Organization
of Petroleum Exporting Countries, and the relative abundance of supplies of
alternative fuel such as coal. Additionally, changing international economic and
political conditions may have a dramatic impact upon crude oil and natural gas
prices. All 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
and the revenues generated by such assets will decline over time. If Harken
drills for oil and gas, such activities carry the risk that Harken will not find
commercially viable amounts of oil or gas. 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 shortage of available working
capital, title problems, weather conditions, environmental concern, 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 reserves to pipelines, the capacity of
such pipelines, fluctuation in seasonal demand, the effects of inclement
weather, and government regulation. New wells may be shut-in for lack of a
market until a 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
and production, its activities in connection with storage and transportation of
liquid hydrocarbons and its use of facilities for treating, processing,
recovering, or otherwise handling hydrocarbons and wastes therefrom are subject
to stringent environmental regulation by governmental authorities. In addition
to these domestic laws and regulations, Harken's international operations are
subject to the laws, regulations and governmental approvals of each foreign
country in which it conducts activities including environmental laws and
regulations governing oil and gas operations.
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.
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Competition. The oil and gas industry is competitive in all its phases.
Competition in the acquisition of desirable producing properties and the sale of
oil and natural gas production is particularly intense. 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. A change in any law, rule or regulation governing Harken
could increase Harken's cost of exploration or production or limit Harken's
revenues by regulating the level of oil and gas production, either of which
could negatively effect Harken's financial condition.
USE OF PROCEEDS
Harken will not receive any part of the proceeds from the sale of shares
of Common Stock by Parkcrest.
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INFORMATION ABOUT PARKCREST
This Prospectus covers the offer and sale of 1,350,000 shares of Common
Stock by Parkcrest Explorations, Ltd. ("Parkcrest"). Harken issued such shares
to Parkcrest as a result of a transaction that was consummated on December 31,
1998. In that transaction, Harken reacquired all of Parkcrest's interest in the
Alcaravan and Miradores Contracts between Harken and Ecopetrol, the Colombian
state owned oil company. In exchange, Harken issued the 1,350,000 shares of
Common Stock to Parkcrest. Harken has agreed to file a "shelf" registration
statement with the SEC pursuant to Rule 415 under the Securities Act covering
the sale of shares of Common Stock held by Parkcrest, and to use its reasonable
best efforts to maintain the effectiveness of any such registration statement
for no less than one year from the date of effectiveness of such registration
statement. In addition, the Company has agreed to bear certain expenses of
registration of the shares of Common Stock under the federal and state
securities laws (currently estimated to be $7,000). The Company has also agreed
to indemnify Parkcrest, or their transferees or assigns, against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments Parkcrest may be required to make in respect thereof.
Parkcrest has not had any position, office or other material relationship
(other that the interest Parkcrest held in the Alcaravan and Miradores
Contracts) with the Company in the last three years. The chart below describes
the number of shares of Common Stock owned by Parkcrest, the number of shares of
Common Stock which may be offered for sale by Parkcrest, and the number of
shares of Common Stock Parkcrest will own if all of the shares of Common Stock
held by Parkcrest are sold. Any or all of the shares listed below may be offered
for sale by Parkcrest from time to time.
<TABLE>
<CAPTION>
Percent of
Common
Shares Shares Stock
Owned Prior Shares Owned Owned After
to the Offered After the the
Selling Stockholders Offering Hereby Offering(1) Offering(1)
- ------------------------------------------- ---------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
Parkcrest Explorations, Ltd. 1,350,000 1,350,000 -0- -0-
</TABLE>
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(1) Assumes no other disposition or acquisition of Common Stock and all
shares of Common Stock included herein are sold.
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PLAN OF DISTRIBUTION
The Company will not receive any proceeds from the sale of Common Stock
owned by Parkcrest. It is anticipated that Parkcrest will offer the shares of
Common Stock for sale from time to time, directly or through broker-dealers or
underwriters who may act solely as agents or may acquire the shares of Common
Stock as principals, in all cases as designated by Parkcrest. 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 Parkcrest or the
purchasers of the securities offered hereby for whom they may act as agent.
The net proceeds to Parkcrest from the sale of Common Stock 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. Parkcrest and any dealers or agents that
participate in the distribution of Common Stock may be deemed to be
"underwriters" within the meaning of the Securities Act.
At any time a particular offer of Common Stock is made, to the extent
required, the specific shares of Common Stock to be sold, the purchase price,
public offering price, the names of any such agent, dealer or underwriter and
any applicable commission or discount with respect to a particular offering will
be set forth in an accompanying Prospectus Supplement. Such Prospectus
Supplement may, if necessary, be in the form of a post-effective amendment to
the Registration Statement of which this Prospectus is a part, and will be filed
with the SEC to reflect the disclosure of additional information with respect to
the distribution of such securities.
The shares of Common Stock being offered by Parkcrest or their respective
pledgees, donees, transferees or other successors in interest, will be sold in
one or more transactions (which may involve block transactions) on the American
Stock Exchange or on such other market on which the Common Stock may from time
to time be trading, in privately-negotiated transactions, through the writing of
options on the shares of Common Stock, short sales or any combination thereof.
The sale price to the public may be the market price prevailing at the time of
sale, a price related to such other price as Parkcrest may determine from time
to time. The shares of Common Stock may also be sold pursuant to Rule 144.
Parkcrest shall have the sole and absolute discretion not to accept any purchase
offer or make any sale of shares of Common Stock if they deem the purchase price
to be unsatisfactory at any particular time.
Parkcrest or their respective pledgees, donees, transferees or other
successors in interest, may also sell the shares of Common Stock directly to
market makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers. It is possible that Parkcrest will attempt to
sell shares of Common Stock in block transactions to market makers or other
purchasers at a price per share which may be below the then market price. There
can be no assurance that any of the shares of Common Stock covered by this
prospectus will be sold by Parkcrest.
Parkcrest, alternatively, may sell all or any part of the shares of
Common Stock offered hereby through an underwriter. Parkcrest has not entered
into any agreement with a prospective underwriter and there is no assurance that
any such agreement will be entered into. If Parkcrest enters into such an
agreement, the relevant details will be set forth in a supplement or revisions
to this Prospectus.
Parkcrest and any others persons participating in the sale or
distribution of the shares of Common Stock will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of any of the shares of
Common Stock by Parkcrest or any other such person. The foregoing may affect the
marketability of the shares of Common Stock.
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.
10
<PAGE> 12
LEGAL MATTERS
The validity of the shares of Common Stock will be passed upon for Harken
by Gregory S. Porter, Esq., Vice President - Legal of Harken.
EXPERTS
The consolidated financial statements of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997, which
is incorporated by reference herein, have been audited by Arthur Andersen 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 report.
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................... $ 818.18
Printing and Engraving Expenses............... 2,000.00
Accounting Fees and Expenses.................. 2,000.00
Blue Sky Fees and Expenses.................... 1,000.00
Miscellaneous................................. 1,181.82
----------
Total.................................... $ 7,000.00
==========
</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 Common Stock
(filed as Exhibit 1 to Harken's Registration Statement on Form
8-A, File No. 0-9207, and incorporated by reference herein).
4.2 - Rights Plan dated as of April 6, 1998, by and between Harken
Energy Corporation and ChaseMellon Shareholder Services L.L.C.
(filed as Exhibit 4 to Harken's Current Report on Form 8-K
dated April 7, 1998, file No. 0-9207, and incorporated by
reference herein).
4.3 - Certificate of Designations of Series E Junior Participating
Preferred Stock (filed as Exhibit B to Exhibit 4 to Harken's
Current Report on Form 8-K dated April 7, 1998, file No.
0-9207, and incorporated by reference herein).
* 5.1 - Opinion of Gregory S. Porter, Esq.
*23.1 - Consent of Arthur Andersen LLP.
*23.2 - Consent of Gregory S. Porter, Esq. (included in opinion filed
as Exhibit 5.1).
*24.1 - Powers of Attorney.
- ------------------
* Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(b) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereto) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in
volume of securities offered (if the total
dollar value of securities offered would not
exceed that which was registered) and any
deviation from the low or high end of the
estimated maximum offering range may be
reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price
represent no more than a 20% change in the
maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in
the effective Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) above do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs
II-2
<PAGE> 15
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 February 4, 1999.
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 February 4, 1999
- ------------------------------ Executive Officer (Principal
Mikel D. Faulkner Executive Officer)
* Vice Chairman and Director February 4, 1999
- ------------------------------
Richard H. Schroeder
* President and Director February 4, 1999
- ------------------------------
Bruce N. Huff
* Executive Vice President, Chief February 4, 1999
- ------------------------------ Operating Officer and Director
Stephen C. Voss
* Director February 4, 1999
- ------------------------------
Gary R. Petersen
* Director February 4, 1999
- ------------------------------
Michael M. Ameen, Jr.
</TABLE>
II-4
<PAGE> 17
<TABLE>
<S> <C> <C>
Director February 4, 1999
- ------------------------------
Michael R. Eisenson
Director February 4, 1999
- ------------------------------
Hobart A. Smith
* Director February 4, 1999
- ------------------------------
Donald W. Raymond
* Director February 4, 1999
- ------------------------------
Gary B. Wood
* Vice President of Finance and Chief February 4, 1999
- ------------------------------ Financial Officer (Principal
A. Wayne Hennecke Accounting Officer and Principal
Financial Officer
</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
<PAGE> 18
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ---------------- ---------------------------------------------------------
<S> <C>
4.1 Form of certificate representing shares of Harken common
stock, par value $.01 per share (filed as Exhibit 1 to
Harken's Registration Statement on Form 8-A, File No.
0-9207, and incorporated by reference herein).
4.2 Rights Plan dated as of April 6, 1998, by and between
Harken Energy Corporation and ChaseMellon Shareholder
Services L.L.C. (filed as Exhibit 4 to Harken's Current
Report on Form 8-K dated April 7, 1998, file No. 0-9207,
and incorporated by reference herein).
4.3 Certificate of Designations of Series E Junior
Participating Preferred Stock (filed as Exhibit B to
Exhibit 4 to Harken's Current Report on Form 8-K dated
April 7, 1998, file No. 0-9207, and incorporated by
reference herein).
*5.1 Opinion of Gregory S. Porter, Esq.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Gregory S. Porter, Esq. (included in opinion
filed as Exhibit 5.1).
*24.1 Powers of Attorney.
</TABLE>
- ------------
* Filed herewith
<PAGE> 1
EXHIBIT 5.1
February 4, 1999
Harken Energy Corporation
5605 N. MacArthur Blvd
Suite 400
Irving, TX 75038
Re: Registration Statement on Form S-3
Gentlemen:
I have acted as counsel to Harken Energy Corporation, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of the offer and sale of an
aggregate of 1,350,000 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 have been 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
February 4, 1999
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 March
17, 1998, included in Harken Energy Corporation's Form 10-K for the year ended
December 31, 1997, and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Dallas, Texas
February 4, 1999
<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 1,350,000 shares of Common Stock, $0.01 par
value, of Harken Energy Corporation and such additional shares of Common Stock
as the holders of "piggy-back" registration rights may request to be included in
such registration statement, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises in order
to effectuate the same, as fully and to all intents and purposes as he himself
might or could do if 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 28thth day of January, 1999.
<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 President and Director
---------------------------------------
Bruce N. Huff
/s/ Richard H. Schroeder Vice Chairman and Director
---------------------------------------
Richard H. Schroeder
</TABLE>
<PAGE> 2
POWER OF ATTORNEY
January 28, 1999
Page 2
<TABLE>
<S> <C>
/s/ Stephen C. Voss Executive Vice President, Chief Operating
--------------------------------------- Officer and Director
Stephen C. Voss
/s/ Gary R. Petersen Director
---------------------------------------
Gary R. Petersen
/s/ Michael M. Ameen, Jr. Director
---------------------------------------
Michael M. Ameen, Jr.
Director
---------------------------------------
Michael R. Eisenson
Director
---------------------------------------
Hobart A. Smith
/s/ Donald W. Raymond Director
---------------------------------------
Donald W. Raymond
/s/ Gary B. Wood Director
---------------------------------------
Gary B. Wood
/s/ A. Wayne Hennecke Vice President of Finance and Chief Financial
--------------------------------------- Officer (Principal Accounting Officer and
A. Wayne Hennecke Principal Financial Officer)
</TABLE>
