As filed with the Securities and Exchange Commission on December 3, 2001
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
580 WESTLAKE PARK BOULEVARD, SUITE 600
HOUSTON, TEXAS 77079
(281) 504-4000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
LARRY E. CUMMINGS
GENERAL COUNSEL
HARKEN ENERGY CORPORATION
580 WESTLAKE PARK BOULEVARD, SUITE 600
HOUSTON, TEXAS 77079
(281) 504-4000
(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
======================================================================================================================
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SHARES TO BE AGGREGATE OFFERING AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PRICE PER SECURITY (1) PRICE (1) FEE (1)
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Common Stock, par value $0.01 per
share 3,193,334 $1.22 $3,895,867.48 $931.12
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Preferred Stock Purchase Rights 3,193,334 Not Applicable Not Applicable -- (2)
=======================================================================================================================
(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
November 30, 2001.
(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.
SUBJECT TO COMPLETION, DATED DECEMBER 3, 2001
PROSPECTUS
3,193,334 Shares
HARKEN ENERGY CORPORATION
Common Stock
------------
This prospectus relates to the offer and sale from time to time of up to an
aggregate of 3,193,334 shares of our common stock for the account of our
stockholders named in this prospectus. The selling stockholders' shares of
common stock being offered for sale include preferred stock purchase rights
attached to the common stock under our stockholder rights plan. We will not
receive any of the proceeds from the sale of the 3,193,334 shares of common
stock.
The shares covered by this prospectus may be sold at market prices
prevailing at the time of sale or at negotiated prices. The selling
stockholders may effect such transactions by selling the shares to or through
broker-dealers. These broker-dealers, if used, may receive discounts,
concessions or commissions from the selling stockholders or from the purchaser
of the shares. The selling stockholders will receive the purchase price of the
shares of stock sold less any such discounts, concessions or commissions. The
selling stockholders will be responsible for any such discounts, concessions or
commissions.
Our common stock is listed for trading on the American Stock Exchange,
under the trading symbol "HEC." On November 30, 2001, the last reported sales
price of our common stock on the American Stock Exchange was $1.21 per share.
Our principal offices are located at 580 WestLake Park Boulevard, Suite 600,
Houston, Texas 77079, and our telephone number is (281) 504-4000.
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 _________________, 2001.
The information in this prospectus is not complete and may be changed. The
selling stockholders 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 the selling
stockholders nor we are soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
TABLE OF CONTENTS
Page
----
The Company.............................................. 3
Risk Factors............................................. 3
Safe Harbor for Forward-Looking Statements............... 11
Where You Can Get More Information....................... 11
Use of Proceeds.......................................... 12
Information About the Selling Stockholders............... 12
Plan of Distribution..................................... 14
Legal Matters............................................ 15
Experts.................................................. 15
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 THE SELLING STOCKHOLDERS NOR WE
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" WERE 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.
AS USED IN THIS PROSPECTUS, "WE," "US," "OUR," OR "HARKEN" MEANS HARKEN
ENERGY CORPORATION.
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THE COMPANY
Our company explores for, develops and produces oil and gas both
domestically and internationally. Our domestic operations are primarily located
in the onshore and offshore Gulf Coast regions of South Texas and Louisiana, in
portions of West Texas and the Texas Panhandle. Our international operations
are primarily concentrated in Colombia, Costa Rica, Peru and Panama.
Our company was incorporated in 1973 in the State of California and
reincorporated in 1979 in the State of Delaware. Our principal offices are
located at 580 WestLake Park Boulevard, Suite 600, Houston Texas 77079, and our
telephone number is (281) 504-4000.
RISK FACTORS
Prior to making an investment decision, you should consider carefully all
of the information in this prospectus and should evaluate the following risk
factors.
RISKS ASSOCIATED WITH OUR OPERATIONS
OUR OPERATIONS REQUIRE SIGNIFICANT EXPENDITURES OF CAPITAL THAT MAY NOT BE
RECOVERED
We require significant expenditures of capital in order to locate and
acquire producing properties and to drill exploratory wells. In conducting
exploration and development activities from a particular well, the presence of
unanticipated pressure or irregularities in formations, miscalculations or
accidents may cause our exploration, development and production activities to be
unsuccessful, potentially resulting in abandoning the well. This could result in
a total loss of our investment. In addition, the cost and timing of drilling,
completing and operating wells is difficult to predict.
THE OIL AND GAS WE PRODUCE MAY NOT BE READILY MARKETABLE AT THE TIME OF
PRODUCTION
Crude oil, natural gas, condensate, and other oil and gas products
are generally sold to other oil and gas companies, government agencies and other
industries. The availability of ready markets for oil and gas that we might
discover and the prices obtained for such oil and gas depend on many factors
beyond our control, including:
. the extent of local production and imports of oil and gas,
. the proximity and capacity of pipelines and other transportation
facilities,
. fluctuating demand for oil and gas,
. the marketing of competitive fuels, and
. the effects of governmental regulation of oil and gas production and sales.
Natural gas associated with oil production is often not marketable due to demand
or transportation limitations and is often flared at the producing well site.
Pipeline facilities do not exist in certain areas of exploration and, therefore,
any actual sales of discovered oil and gas might be delayed for extended periods
until such facilities are constructed.
WE MAY ENCOUNTER OPERATING HAZARDS IN OUR OPERATIONS THAT MAY RESULT IN
SUBSTANTIAL LOSS
We are also subject to operating hazards normally associated with the
exploration and production of oil and gas, including, without limitation,
blowouts, cratering, pollution, earthquakes, labor disruptions and fires. The
occurrence of any such operating hazard could result in substantial losses to
our company due to injury or loss of
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life and damage to or destruction of oil and gas wells, formations, production
facilities or other properties. In accordance with customary industry practices,
we maintain insurance coverage limiting financial loss resulting from certain of
these operating hazards. Losses and liabilities arising from uninsured or
underinsured events could reduce our revenues or increase our costs. There can
be no assurance that any insurance will be adequate to cover losses or
liabilities associated with operational hazards. We cannot predict the continued
availability of insurance, or its availability at premium levels that justify
its purchase.
DRILLING OIL AND GAS WELLS PARTICULARLY IN THE LOUISIANA WETLANDS, THE ONSHORE
REGIONS OF TEXAS AND IN COLOMBIA, COSTA RICA, PERU AND PANAMA COULD BE HINDERED
BY HURRICANES, EARTHQUAKES AND OTHER WEATHER-RELATED OPERATING RISKS
Our operations in the Louisiana wetlands, the onshore regions of Texas and
in Colombia, Costa Rica, Peru and Panama are subject to risks from hurricanes
and other natural disasters. Damage caused by hurricanes, earthquakes or other
operating hazards could result in substantial losses to our company. The
occurrence of such an event that is not fully covered by insurance could have a
material adverse effect on our financial position and results of operations.
WE FACE STRONG COMPETITION FROM LARGER OIL AND GAS COMPANIES
The exploration and production business is highly competitive. Many of our
competitors have substantially larger financial resources, staffs and
facilities. Our competitors in the United States include numerous major oil and
gas exploration and production companies and in Colombia, Costa Rica, Peru and
Panama include such major oil and gas companies as BP Amoco, Exxon/Mobil,
Texaco, Conoco, Shell and Arco. These major oil and gas companies are often
better positioned to obtain the rights to exploratory acreage that we compete
for.
OUR OPERATIONS ARE SUBJECT TO STRINGENT ENVIRONMENTAL LAWS AND REGULATIONS THAT
MAY CHANGE
Our operations are subject to stringent foreign, federal, state and local
laws and regulations governing the discharge of materials into the environment
or otherwise relating to environmental protection. These laws and regulations
may require the acquisition of a permit before drilling commences, restrict the
types, quantities and concentrations of various substances that can be released
into the environment, limit or prohibit construction or drilling activities on
certain sensitive lands, and impose substantial liabilities for pollution
resulting from former or current operations. Failure to comply with these laws
and regulations may result in the imposition of administrative, civil and
criminal penalties. Changes in environmental laws and regulations occur
frequently, and any changes that result in more stringent and costly waste
management or cleanup requirements could result in substantial costs or loss of
revenue for our company.
WE MAY BE SUBJECT TO LIABILITY FOR FAILING TO COMPLY WITH ENVIRONMENTAL LAWS AND
REGULATIONS OR FOR CLEAN-UP OBLIGATIONS RELATED TO OUR CURRENT OR FORMER
PROPERTIES
While we believe that we are in substantial compliance with current
environmental laws and regulations, we may incur substantial liability for
failing to comply with such laws and regulations in the future.
The Comprehensive Environmental Response, Compensation and Liability Act,
referred to as CERCLA but also known as "Superfund," and comparable state laws
impose liability without regard to fault or the legality of the original conduct
on certain classes of persons who are considered to be responsible for the
release of a "hazardous substance" into the environment. These persons include
the owner or operator of the disposal site where the release occurred and
companies who arrange for the disposal or transport of the hazardous substances
found at the site. Under CERCLA, such persons may be subject to joint and
several liability for the costs of cleaning up the released hazardous
substances, for damages to natural resources, and for the costs of certain
health studies. The Resource Conservation and Recovery Act, referred to as
RCRA, generally does not regulate most wastes generated by the exploration and
production of oil and gas. However, these wastes may be regulated as solid
waste. Also,
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ordinary industrial wastes, such as paint wastes, waste solvents, and laboratory
wastes, may be regulated as hazardous waste. We own or lease, and have in the
past owned or leased, properties that have been used for the exploration and
production of oil and gas. In addition, many of these properties have been
operated by third parties whose treatment and release of hydrocarbons or other
wastes were not under our control. These properties and the wastes disposed on
these properties may be subject to CERCLA, RCRA, and analogous state laws. Under
such laws, we could be required to remove or remediate previously released
wastes or property contamination.
The Oil Pollution Act of 1990, referred to as OPA, pertains to the
prevention of and response to spills or discharges of hazardous substances or
oil into navigable water of the United States. Under OPA, a person owning or
operating a facility or equipment from which there is a discharge or threat of a
discharge of oil into or upon navigable waters or adjoining shorelines is
liable, regardless of fault, as a "responsible party" for removal costs and
damages. Federal law imposes strict, joint and several liability on facility
owners for containment and clean-up costs and certain other damages, including
natural resource damages arising from a spill. The OPA establishes a liability
limit for onshore facilities of $350 million; however, a party cannot take
advantage of this liability limit if the spill is caused by gross negligence or
willful misconduct, if the spill resulted from a violation of a federal safety,
construction, or operating regulation, or if a party fails to report a spill or
cooperate in the cleanup. The Federal Water Pollution Control Act, also
referred to as the Clean Water Act and analogous state laws impose strict
controls regarding the discharge of pollutants, including produced waters and
other oil and gas wastes, into state waters or waters of the United States. The
discharge of pollutants into regulated waters is prohibited, except in accord
with the terms of a permit issued by EPA or the state. Federal regulations
under the OPA and the Clean Water Act also require certain owners and operators
of facilities that store or otherwise handle oil, such as us, to prepare and
implement spill prevention, control and countermeasure plans and spill response
plans relating to possible discharge of oil into surface waters.
OUR FOREIGN OPERATIONS ARE SUBJECT TO ENVIRONMENTAL LAWS AND REGULATIONS AND WE
HAVE EXPERIENCED SOME DIFFICULTY IN GETTING APPROPRIATE PERMITS AND
AUTHORIZATIONS FROM FOREIGN GOVERNMENTS
Our operations are subject to similar laws and regulations in Costa Rica,
Colombia, Peru and Panama. While we believe that our operations are in
substantial compliance with existing requirements of governmental bodies in
these foreign countries, our ability to conduct continued operations is subject
to satisfying applicable regulatory and permitting controls in these foreign
countries. Our current permits and authorizations and ability to get future
permits and authorizations in these foreign countries may be susceptible, on a
going forward basis, to increased scrutiny, greater complexity resulting in
increased costs, or delays in receiving appropriate authorizations.
Our exploration and production operations in Colombia, including well
drilling, pipeline construction, and seismic activities, require specific
federal and local environmental licenses and permits, the acquisition of which
in the past has been subject to extensive delays. We may continue to experience
similar delays in the future. Failure to obtain these licenses and permits in a
timely manner may prevent us from obtaining financing for our projects.
OUR FOREIGN OPERATIONS INVOLVE SUBSTANTIAL COSTS AND ARE SUBJECT TO CERTAIN
RISKS BECAUSE THE OIL AND GAS INDUSTRIES IN SUCH COUNTRIES ARE LESS DEVELOPED
The oil and gas industries in Colombia, Costa Rica, Peru and Panama are not
as developed as the oil and gas industry in the U.S. As a result, our drilling
and development operations in many instances take longer to complete and often
cost more than similar operations in the U.S. The availability of technical
expertise, specific equipment and supplies is more limited in Colombia, Costa
Rica, Peru and Panama than in the U.S. We expect that such factors will
continue to subject us to economic and operating risks not experienced in our
domestic operations.
We follow the full cost method of accounting for exploration and
development of oil and gas reserves in which all of our acquisition, exploration
and development costs are capitalized. Costs related to the acquisition, holding
and initial exploration of oil and gas associated with our contracts in
countries with no proved reserves are initially capitalized, including internal
costs directly identified with acquisition, exploration and development
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activities. If we abandon all exploration efforts in a country where no proved
reserves are assigned, all acquisition and exploration costs associated with the
country are expensed. From time to time, we make assessments as to whether our
investment within a country is impaired and whether exploration activities
within a country will be abandoned based on our analysis of drilling results,
seismic data and other information we believe to be relevant. Due to the
unpredictable nature of exploration drilling activities, the amount and timing
of impairment expenses are difficult to predict.
IF WE FAIL TO COMPLY WITH THE TERMS OF CERTAIN CONTRACTS RELATED TO OUR FOREIGN
OPERATIONS, WE COULD LOSE OUR RIGHTS UNDER EACH OF THOSE CONTRACTS
Terms of each of the Colombia Association Contracts, the Costa Rica
Contract, the Peruvian Technical Evaluation Agreement and the Panamanian
Technical Evaluation Agreement require that we perform certain activities in
accordance with a prescribed timetable. Our failure to timely perform those
activities as required could result in the loss of our rights under a particular
contract, which would likely result in a significant loss to our company. As of
December 3, 2001, we were in compliance with the requirements of each of the
Colombia Association Contracts, the Costa Rica Contract, the Peruvian Technical
Evaluation Agreement and the Panamanian Technical Evaluation Agreement.
WE MAY REQUIRE SIGNIFICANT ADDITIONAL FINANCING FOR OUR FOREIGN OPERATIONS THAT
MAY NOT BE AVAILABLE
We anticipate that full development of our existing and future oil and gas
discoveries in Colombia, Costa Rica, Peru and Panama may take several years and
may require extensive production and transportation facilities requiring
significant additional capital expenditures. If we are unable to timely obtain
adequate funds to finance these investments, our ability to develop oil and gas
reserves in these countries may be severely limited or substantially delayed.
Such limitations or delay would likely result in substantial losses for our
company.
MKJ Xploration, Inc. ("MKJ") is seeking additional joint venture
participation for its Costa Rica work program obligations prior to drilling the
Moin #2 well. There can be no assurance that a joint venture partner can be
obtained. If MKJ fails to obtain such joint venture participation, we may be
prevented or delayed from developing the Costa Rica Contract.
We anticipate that amounts required to fund our foreign activities will be
funded from our existing cash balances, asset sales, stock issuances, production
payments, operating cash flows and from joint venture partners. We cannot
assure you that we will have adequate funds available to finance our foreign
operations.
OUR FOREIGN OPERATIONS ARE SUBJECT TO POLITICAL, ECONOMIC AND OTHER
UNCERTAINTIES
We currently conduct significant operations in Colombia and Costa Rica, and
may also conduct operations in Peru, Panama and other foreign countries in the
future. At December 31, 2000, approximately 13% of Harken's proved reserves
were related to Harken's Colombian operations. Exploration and production
operations in foreign countries are subject to political, economic and other
uncertainties, including:
. the risk of war, revolution, border disputes, expropriation, renegotiation
or modification of existing contracts, import, export and transportation
regulations and tariffs resulting in loss of revenue, property and
equipment;
. taxation policies, including royalty and tax increases and retroactive tax
claims;
. exchange controls, currency fluctuations and other uncertainties arising
out of foreign government sovereignty over international operations;
. laws and policies of the United States affecting foreign trade, taxation
and investment; and
6
. the possibility of being subjected to the jurisdiction of foreign courts in
connection with legal disputes and the possible inability to subject
foreign persons to the jurisdiction of courts in the United States.
Central and South America and other regions of the world have a history of
political and economic instability. This instability could result in new
governments or the adoption of new policies, laws or regulations that might
assume a substantially more hostile attitude toward foreign investment. In an
extreme case, such a change could result in termination of contract rights and
expropriation of foreign-owned assets. Any such activity could result in a
significant loss to our company.
GUERRILLA ACTIVITY IN COLOMBIA COULD DISRUPT OR DELAY OUR OPERATIONS, AND WE ARE
CONCERNED ABOUT SAFEGUARDING OUR OPERATIONS AND PERSONNEL IN COLOMBIA.
From time to time, guerilla activity in Colombia has delayed our projects
there. This guerilla activity has increased over the last few years, causing
delays in the development of our fields in Colombia. Guerilla activity, such as
road blockades, has also from time to time slowed our deployment of workers in
the field and affected our operations. In addition, guerillas could attempt to
disrupt the flow of our production through pipelines. We have become
substantially more concerned about safeguarding our operations and personnel
with the recent occurrences of threats of violence throughout the country. In
addition to these security issues, we have also become the subject of media
focus in Colombia that may further compromise our security position in the
country.
Our company and the Colombian government have taken steps to maintain
security and favorable relations with the local population. These steps have
included the hiring of security to patrol our facilities, and programs to
provide local communities with health and educational assistance. We anticipate
continuing these steps throughout the term of our operations in Colombia.
Our operating plans in Colombia are continuing, subject to the ongoing
monitoring of these security developments. We are also continuing to analyze and
upgrade our security procedures and have initiated action to expand security
measures for both personnel and field operations. We cannot assure you that
these attempts to reduce or prevent guerilla activity will be successful or that
guerilla activity will not disrupt operations in the future. We also cannot
assure you that we can maintain the safety of our operations and personnel in
Colombia or that this violence will not affect our operations in the future.
Continued or heightened security concerns in Colombia could also result in a
significant loss to our company.
THE UNITED STATES GOVERNMENT MAY IMPOSE ECONOMIC OR TRADE SANCTIONS ON COLOMBIA
THAT COULD RESULT IN A SIGNIFICANT LOSS TO OUR COMPANY.
Colombia is among several nations whose progress in stemming the production
and transit of illegal drugs is subject to annual certification by the President
of the United States. The President of the United States has announced that
Colombia would be certified. There can be no assurance that, in the future,
Colombia will receive certification or a national interest waiver. The failure
to receive certification or a national interest waiver may result in any of the
following:
. all bilateral aid, except anti-narcotics and humanitarian aid, would be
suspended;
. the Export-Import Bank of the United States and the Overseas Private
Investment Corporation would not approve financing for new projects in
Colombia;
. U.S. representatives at multilateral lending institutions would be required
to vote against all loan requests from Colombia, although such votes would
not constitute vetoes; and
. the President of the United States and Congress would retain the right to
apply future trade sanctions.
7
Each of these consequences could result in adverse economic consequences in
Colombia and could further heighten the political and economic risks associated
with our operations there. Any changes in the holders of significant government
offices could have adverse consequences on our relationship with the Colombian
national oil company and the Colombian government's ability to control guerrilla
activities and could exacerbate the factors relating to our foreign operations
discussed above.
Any sanctions imposed on Colombia by the U.S. government could threaten our
ability to obtain necessary financing to develop the Colombian properties or
cause Colombia to retaliate against us, including by nationalizing our Colombian
assets. Accordingly, the imposition of the foregoing economic and trade
sanctions on Colombia would likely result in a substantial loss to our company
and a decrease in the price of our common stock. We cannot assure you that the
United States will not impose sanctions on Colombia in the future or predict the
effect in Colombia that these sanctions might cause.
WE MAY SUFFER LOSSES FROM EXCHANGE RATE FLUCTUATIONS
We account for our Colombian, Costa Rican, Peruvian and Panamanian
operations using the U.S. dollar as the functional currency. The costs
associated with our exploration efforts in Colombia, Costa Rica, Peru and Panama
have typically been denominated in U.S. dollars. We expect that a substantial
portion of our future Colombian revenues may be denominated in Colombian pesos.
To the extent that the amount of our revenues denominated in Colombian pesos is
greater than the amount of costs denominated in Colombian pesos, we could suffer
a loss if the value of the Colombian peso were to drop relative to the value of
the U.S. dollar. Any substantial currency fluctuations could have a material
adverse effect on our results of operations.
GOVERNMENT AGENCIES IN COLOMBIA, COSTA RICA, PERU AND PANAMA MAY TAKE ACTION
RESULTING IN AN INCREASE IN OUR COSTS, DELAYS IN OUR OPERATIONS OR THE
TERMINATION OR SUSPENSION OF OUR OPERATIONS
We are required to obtain an environmental permit or approval from the
governments in Colombia, Costa Rica, Peru and Panama prior to conducting seismic
operations, drilling a well or constructing a pipeline in such foreign
locations. Our operations in foreign countries have been delayed in the past
and could be delayed in the future through the process of obtaining an
environmental permit. Compliance with these laws and regulations may increase
our costs of operations, as well as further restrict our foreign operations.
Costa Rica has implemented policies and laws with a high level of attention
to the protection of its ecological areas and environment. As a result, our
operations in Costa Rica are subject to much greater control, scrutiny and
restrictions than are usually encountered in international exploration
operations. Due to such additional regulations and requirements in Costa Rica,
we will likely encounter further delays in our operations, future challenges to
the implementation of the Costa Rica Contract and significant increases in our
projected costs.
RISKS ASSOCIATED WITH MARKET CONDITIONS
OUR STOCK PRICE IS VOLATILE
Our stock price has been and is highly volatile. Our stock price is
highly influenced by current expectations of future revenue and earnings growth
rates. As an exploration and production company, these expectations may be
greatly influenced by the success or failure of each well that we drill. Based
in part on the results of such drilling activity in Colombia and Costa Rica, the
market price of our common stock declined significantly in 1999 and 2000. From
August 6, 1999 through December 3, 2001, our common stock ranged from a high of
$20.00 per share to a low of $1.02 per share (as adjusted for the one-for-ten
reverse stock split occurring on November 7, 2000).
8
WE MAY ISSUE ADDITIONAL SHARES OF COMMON STOCK THAT MAY DILUTE THE VALUE OF OUR
COMMON STOCK TO CURRENT STOCKHOLDERS AND MAY ADVERSELY AFFECT THE MARKET PRICE
OF OUR COMMON STOCK
We may be required to issue up to approximately 11.2 million shares of
common stock as a result of outstanding warrants, stock options, convertible
notes and preferred stock which could become exercised or converted,
particularly in the event of an increase in the market price of our common
stock. If we issue additional shares, your ownership position in our company
may be significantly diluted. In addition, we may elect to issue a significant
number of additional shares of common stock for financing or other purposes,
which could result in a decrease in the market price of our common stock.
There are currently several registration statements with respect to our
common stock that are or will become effective, pursuant to which certain of our
stockholders may sell up to an aggregate of 4,343,555 shares of common stock.
If the selling stockholders named in such registration statements sell all of
the shares of common stock registered pursuant to such registration statements,
such sales could result in a decrease in the market price of our common stock.
WE HAVE ISSUED SHARES OF PREFERRED STOCK WITH GREATER RIGHTS THAN OUR COMMON
STOCK AND MAY ISSUE ADDITIONAL SHARES OF PREFERRED STOCK IN THE FUTURE
We are permitted under our charter to issue up to ten million shares of
preferred stock. We can issue shares of our preferred stock in one or more
series and can set the terms of the preferred stock without seeking any further
approval from our common stockholders. Any preferred stock that we issue may
rank ahead of our common stock in terms of dividend priority or liquidation
premiums and may have greater voting rights than our common stock. As of the
date hereof, we have issued 494,465 shares of Series G1 Preferred Stock and
95,800 shares of Series G2 Preferred Stock in private placement transactions
exempt from registration under the Securities Act of 1933. These shares of
preferred stock have rights senior to our common stock with respect to dividends
and liquidation. In addition, such preferred stock may be converted into shares
of common stock, which could dilute the value of common stock to current
stockholders and could adversely affect the market price of our common stock.
OUR STRATEGIC PLAN INCLUDES THE ACQUISITION OF ADDITIONAL RESERVES THROUGH
BUSINESS COMBINATIONS
Our strategic plan includes the acquisition of additional reserves,
including through business combinations. We may not be able to consummate future
business combinations on favorable terms. Additionally, future business
combinations may not achieve favorable financial results.
Future business combinations may also involve the issuance of shares of our
common stock, which could have a dilutive effect on your interests as a
stockholder. Furthermore, acquisitions may require substantial financial
expenditures that will need to be financed through cash flow from operations or
future debt and equity offerings by us. We may not be able to acquire companies
or oil and gas properties using our equity as currency. In the case of cash
acquisitions, we may not be able to generate sufficient cash flow from
operations or obtain debt or equity financing sufficient to fund future
acquisitions of reserves.
RISKS ASSOCIATED WITH OUR FINANCIAL CONDITION
IF ESTIMATES OF OUR OIL AND GAS RESERVE INFORMATION ARE ADJUSTED, OUR FINANCIAL
CONDITION MAY SUFFER
Our proved oil and gas reserve information is based upon criteria mandated
by the Securities and Exchange Commission ("SEC") and represents only estimates.
Our future production, revenues and expenditures with respect to such oil and
gas reserves will likely be different from estimates and the differences may be
material. If estimates of oil and gas reserves are greater than future
production amounts, or if future production costs and expenditures are greater
than estimates, our business, financial condition, and results of operations may
be negatively affected.
Our reserve estimates of future production volumes are based on underlying
estimates of the accumulation
9
of oil and gas and the economic recoverability of those volumes. Petroleum
engineering is a subjective process of estimating underground accumulations of
oil and gas that cannot be measured in an exact manner. Estimates of
economically recoverable oil and gas reserves and of future net cash flows
necessarily depend upon a number of variable factors and assumptions.
Because all reserve estimates are to some degree subjective, each of the
following items may prove to differ materially from those assumed in estimating
reserves:
. the quantities of oil and gas that are ultimately recovered,
. the production and operating costs incurred,
. the amount and timing of future development expenditures, and
. future oil and gas sales prices.
Furthermore, different reserve engineers may make different estimates of
reserves and cash flows based on the same available data.
The estimated discounted future net cash flows described in our annual
report on Form 10-K for the year ended December 31, 2000, incorporated by
reference herein, should not be considered as the current market value of the
estimated oil and gas reserves attributable to our properties from proved
reserves. Such estimates are based on prices and costs as of the date of the
estimate, in accordance with SEC requirements, while future prices and costs may
be materially higher or lower and do not reflect the impact of sales of
producing properties consummated during 2001.
WE HAVE A HISTORY OF LOSSES AND MAY SUFFER LOSSES IN THE FUTURE
We have reported losses in each of the last five years including a net loss
of $152,933,000 for the year ended December 31, 2000 that was primarily caused
by the writedown of Harken's Colombian oil properties. We have reported
cumulative net losses of approximately $222 million over the last five years.
Our ability to generate net income is strongly affected by, among other factors,
the market price of crude oil and natural gas. If the market price of crude oil
and natural gas declines, we may report additional losses in the future.
IF ESTIMATED DISCOUNTED FUTURE NET CASH FLOWS DECREASE, WE MAY BE REQUIRED TO
TAKE ADDITIONAL WRITEDOWNS
We periodically review the carrying value of our oil and gas properties
under applicable full-cost accounting rules. These rules require a writedown of
the carrying value of oil and gas properties if the carrying value exceeds the
applicable estimated discounted future net cash flows from proved oil and gas
reserves. Given the volatility of oil and gas prices, it is reasonably possible
that the estimated discounted future net cash flows could change in the near
term. If oil and gas prices decline in the future, even if only for a short
period of time, it is possible that additional writedowns of oil and gas
properties could occur. Whether we will be required to take such a charge will
depend on the prices for oil and gas at the end of any quarter and the effect of
reserve additions or revisions and capital expenditures during such quarter.
Based on prices as of September 30, 2001, the net evaluated capitalized
costs related to our domestic oil and gas properties exceeded the domestic cost
ceiling which would have resulted in a writedown of our oil and gas properties.
Subsequent to September 30, 2001 and as of November 8, 2001, along with updated
information related to oil and gas reserve quantities added subsequent to
September 30, 2001, our domestic cost ceiling exceeded our net evaluated
capitalized costs, and no amount has been charged to expense.
Beginning in December 2000, and through the first half of the first quarter
of 2001, we drilled the Olivo #2
10
well in Colombia. Due primarily to the results of the Olivo #2 well, and the
corresponding significant reduction in our proved undeveloped reserves in the
Bolivar Association Contract area, and to a lesser extent due to a reduction in
our proved producing reserves due to production information from the well, we
recognized a non-cash charge in the amount of approximately $156.4 million as of
December 31, 2000. Such amount represents a writedown of the carrying value of
our Colombian evaluated oil properties.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
We believe that certain statements contained or incorporated by reference
in this prospectus are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and are considered prospective.
The following statements are or may constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995:
. statements before, after or including the words "may", "will", "could",
"should", "believe", "expect", "future", "potential", "anticipate",
"intend", "plan", "estimate" or "continue" or the negative or other
variations of these words; and
. other statements about matters that are not historical facts.
We may be unable to achieve the future results covered by the forward-
looking statements. The statements are subject to risks, uncertainties and
other factors that could cause actual results to differ materially from the
future results that the statements express or imply. See "Risk Factors".
Please do not put undue reliance on these forward-looking statements, which
speak only as of the date of this prospectus.
WHERE YOU CAN GET MORE INFORMATION
We file reports, proxy statements, and other information with the SEC.
Such reports, proxy statements and other information concerning our company 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 our company.
Our 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 us to "incorporate by reference" the information we file
with the SEC. This permits us 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. We incorporate by reference the documents
listed below and any future filings made by us with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934, as amended until all of
the securities described in this prospectus are sold:
. our annual report on Form 10-K for the year ended December 31, 2000;
. our quarterly reports on Form 10-Q for the quarterly periods ended March
31, 2001, June 30, 2001 and September 30, 2001;
. our current reports on Form 8-K filed with the SEC on July 24, 2001, August
24, 2001 and September 5, 2001;
11
. the description of our common stock contained in our registration statement
on Form 8-A, filed with the SEC on April 7, 1998, including all amendments
and reports filed for the purpose of updating such description; and
. the description of our preferred stock purchase rights as contained in our
registration statement on Form 8-A, filed with the SEC on April 7, 1998,
including all amendments and reports filed for the purpose of updating such
description.
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 our company 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, at no cost, by writing or telephoning us at the following:
Harken Energy Corporation
580 WestLake Park Boulevard, Suite 600
Houston, Texas 77079
Attention: Larry E. Cummings
Telephone: (281) 504-4000
USE OF PROCEEDS
We will not receive any part of the proceeds from the sale of shares of
common stock by the selling stockholders.
INFORMATION ABOUT THE SELLING STOCKHOLDERS
This prospectus relates to the offer and sale from time to time of up to an
aggregate of 3,193,334 shares of our common stock for the account of the selling
stockholders identified herein. These shares consist of shares of our common
stock issuable upon the conversion of our Series G2 Preferred Stock (the "Series
G2 Preferred").
On May 30, 2001, our board of directors approved the authorization and
issuance of up to 100,000 shares of Series G2 Preferred. As of the date hereof,
there are 95,800 shares of Series G2 Preferred outstanding. The following is a
summary of the material terms of the Series G2 Preferred and is qualified in its
entirety by the full rendition of the Certificate of Designations of the Series
G2 Preferred, which is filed as an exhibit hereto.
The Series G2 Preferred has a liquidation value of $100 per share and is
convertible at the holder's option into common stock at a conversion price of
$3.00 per share of underlying common stock (the "Series G2 Preferred Conversion
Price") for each $100 liquidation value per share of Series G2 Preferred,
subject to adjustment in certain circumstances. At any time after this
registration statement has been declared effective, if for any period of twenty
consecutive trading days the average of the closing prices of our common stock
during such period shall have equaled or exceeded $3.75 (as adjusted for any
stock splits, combinations or the like), we may, at our option, effect the
conversion of each share of Series G2 Preferred into that number of shares of
common stock equal to (x) each $100 liquidation value per share of Series G2
Preferred plus the amount of any accrued and unpaid dividends (whether or not
earned or declared) on the Series G2 Preferred (including an amount equal to
certain prorated dividends) divided by (y) the Series G2 Preferred Conversion
Price.
The holders of the Series G2 Preferred are entitled to receive dividends at
an annual rate equal to $8 per share when, as and if declared by our board of
directors. All dividends on the Series G2 Preferred are cumulative
12
and payable semi-annually in arrears on June 30 and December 30 of each year,
commencing on December 31, 2001. At our option, dividends may also be payable in
common stock at a value of $3.00 per share of our common stock. We also may
redeem the Series G2 Preferred in whole or in part for cash at any time at $100
per share plus any accrued and unpaid dividends, such dividends being paid in
cash or common stock. In addition, on or after June 1, 2004, we may further
elect, in any six-month period, to redeem up to 50% of the outstanding Series G2
Preferred with shares of our common stock valued at an average market price, and
using a redemption value of the Series G2 Preferred that includes a 5% to 10%
premium, with such premium based on our market capitalization at the time of
redemption.
On September 6, 2001, we received written notice from a selling
stockholder, RP&C International (Guernsey) Limited ("RP&C"), of its election to
convert 500 shares of the Series G2 Preferred into common stock. This
notification requires us to file a registration statement with respect to the
shares of common stock issuable on the conversion of all Series G2 Preferred.
We are obligated to file this registration statement at the earliest practicable
date, but in any event prior to 90 days following our receipt of this initial
notice. We are also obligated to use our best efforts to cause the SEC to
declare this registration statement (and any necessary amendments) effective.
We have also agreed to use our best efforts to maintain the effectiveness of
this registration statement and to refile a registration statement from time to
time in the event the effectiveness of this registration lapses, until all
shares of common stock issuable on the conversion of the Series G2 either issued
or that may be issued are freely tradeable (as defined in the Certificate of
Designations for the Series G2 Preferred) in the United States.
In May of 1998, we consummated an offering (the "Notes Offering") of
$85,000,000 of 5% Senior Convertible Notes Due May 26, 2003 (the "Notes").
Under the terms of the Notes Offering, prior to maturity and unless previously
redeemed, the Notes were convertible by the holders thereof into shares of our
common stock at a price of $65.00, subject to adjustment under certain
circumstances. Except for RP&C, the selling stockholders have not had any
position, office or other material relationship with us in the last three years
other than Notes held by certain of the selling stockholders.
RP&C has served as agent for us in various transactions during the last
three years including the (a) Notes Offering, (b) a private exchange in February
2000 of $6,000,000 face amount of Notes for our common stock, (c) several
repurchases by us of certain of the Notes in the open market and (d) several
private placements of both common stock and preferred stock.
The chart below describes the number of shares of common stock underlying
the Series G2 Preferred owned by the selling stockholders, the number of shares
of common stock which may be offered for sale by the selling stockholders and
the number of shares of common stock the selling stockholders will own if all of
the shares of common stock held by the selling stockholders are sold. Any or
all of the shares listed below may be offered for sale by the selling
stockholders or their nominees from time to time.
PERCENT OF
SHARES OWNED SHARES SHARES OWNED COMMON STOCK
PRIOR TO OFFERED AFTER THE OWNED AFTER THE
SELLING STOCKHOLDERS THE OFFERING (1) HEREBY OFFERING (2) OFFERING (2)
-------------------- ---------------- ------- ------------ -------------
Morgan Stanley & Co. International Ltd. 333,333 333,333 -0- -0-
AKB Privatbank Zurich AG 16,667 16,667 -0- -0-
AKB Privatbank Zurich AG 33,333 33,333 -0- -0-
AKB Privatbank Zurich AG 133,333 133,333 -0- -0-
Centrum Bank AG 46,667 46,667 -0- -0-
Bank Julius Baer & Co. Ltd. 33,333 33,333 -0- -0-
13
Anglo Irish Bank (Suisse), SA 710,000 710,000 -0- -0-
The Liverpool Limited Partnership 226,667 226,667 -0- -0-
Elliott International, L.P. 273,333 273,333 -0- -0-
Banque de Luxembourg 100,000 100,000 -0- -0-
Coutts Bank (Schweiz) AG 3,333 3,333 -0- -0-
RP&C International (Guernsey) Limited 316,667 316,667 -0- -0-
Cantrade Privatbank AG 166,667 166,667 -0- -0-
Perry Limited 666,667 666,667 -0- -0-
Rudolf Mosimann 33,333 33,333 -0- -0-
Hyposwiss 16,667 16,667 -0- -0-
Hyposwiss 16,667 16,667 -0- -0-
Migrosbank 16,667 16,667 -0- -0-
Verit Liegenschaften und Beteiligungen AG 33,333 33,333 -0- -0-
Credit Suisse 16,667 16,667 -0- -0-
___________________
(1) Consists of shares of common stock issuable upon conversion of the Series
G2 Preferred.
(2) Assumes no other disposition or acquisition of common stock and all shares
of common stock are sold.
PLAN OF DISTRIBUTION
We will not receive any proceeds from the sale of common stock owned by the
selling stockholders. It is anticipated that the selling stockholders will
offer the shares 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 the selling
stockholders. Such underwriters or broker-dealers, acting either as principal
or as agent, may receive compensation in the form of usual and customary or
specifically negotiated underwriting discounts, concessions or commissions from
the selling stockholders or the purchasers of the 3,193,334 shares of common
stock offered in this prospectus for whom they may act as agent.
The net proceeds to the selling stockholders 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 us. The selling stockholders and any dealers or
agents that participate in the distribution of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act.
At any time a particular offer of common stock is made, and if required by
SEC rules and regulations, the specific shares of common stock to be sold, the
purchase price, public offering price, the names of and any commission or
discount with any agent, dealer or underwriter will be described in an
accompanying prospectus supplement. The prospectus supplement may 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.
The shares of common stock being offered by the selling stockholders will
be sold in one or more transactions, which may include block transactions, on
the American Stock Exchange or on any other market on which the common stock may
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, or a
different price negotiated by the selling stockholders. The shares of common
stock may also be sold pursuant to Rule 144. The selling stockholders shall
have the sole and absolute
14
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.
The selling stockholders, alternatively, may sell all or any part of the
3,193,334 shares of common stock offered in this prospectus through an
underwriter. The selling stockholders have not entered into any agreement with
a prospective underwriter and there is no assurance that any such agreement will
be entered into. If the selling stockholders enter into such an agreement, the
relevant details will be set forth in a supplement or revisions to this
prospectus.
The selling stockholders and any other 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 passed by the SEC,
which may limit the timing of purchases and sales of any of the shares of common
stock by the selling stockholders or any other such person. This may affect the
marketability of the shares of common stock.
LEGAL MATTERS
The validity of the shares of common stock will be passed upon by Larry E.
Cummings, our General Counsel.
EXPERTS
The audited consolidated financial statements incorporated by reference
into this prospectus 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.
Our oil and gas reserves in Colombia have been reviewed by our independent
reserve engineers, Gaffney, Cline & Associates, Inc., as stated in their report
thereon. Harken's disclosures of its oil and gas reserves in Colombia included
in its Form 10-K for the year ending December 31, 2000, have been presented in
reliance upon the authority of such firm as experts in petroleum engineering.
15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the registration of the shares of common
stock covered by this prospectus are set forth in the following table. All
amounts except the registration fee are estimated:
Commission Registration Fee $ 931.12
Printing and Engraving Expenses $ 500.00
Accounting Fees and Expenses $ 2,500.00
Legal Fees and Expenses $10,000.00
----------
Total $13,931.12
==========
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 our certificate of incorporation and Article VII of our bylaws
provide, in general, that we shall indemnify our directors and officers under
certain of the circumstances defined in Section 145. We have entered into
agreements with each member of our board of directors pursuant to which it will
advance to each director costs of litigation in accordance with the
indemnification provisions of our Certificate of Incorporation and bylaws.
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 Designations, Powers, Preferences and Rights of
Series A Cumulative Convertible Preferred Stock, $1.00 par value,
of Harken Energy Corporation (filed as Exhibit 4.1 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 Designations, Powers, Preferences and Rights of
Series B Cumulative Convertible Preferred Stock, $1.00 par value,
of Harken Energy Corporation (filed as Exhibit 4.2 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).
4.4 - 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).
4.5 - 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 fiscal quarter
ended September 30, 1995, File No. 0-9207, and incorporated by
reference herein).
4.6 - Rights Agreement, dated as of April 6, 1999, by and between Harken
Energy Corporation and ChaseMellon Shareholder Services L.L.C., as
Rights Agent (filed as Exhibit 4 to Harken's Current Report on
Form 8-K dated April 7, 1999, File No. 0-9207, and incorporated by
reference herein).
4.7 - 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, 1999, File No. 0-9207,
and incorporated by reference herein).
4.8 - Certificate of Designations, Preferences and Rights of Series F
Convertible Preferred Stock (filed as Exhibit 4.8 to Harken's
Quarterly Report on Form 10-Q for the period ended June 30, 1998,
File No. 0-9207, and incorporated by reference herein).
4.9 - Certificate of Designations, Preferences and Rights of Series G1
Convertible Preferred Stock (filed as Exhibit 4.9 to Harken's
Annual Report on Form 10-K for the fiscal year ended December 31,
2000, File no. 0-9207, and incorporated by reference herein).
4.10* - Certificate of Designations of Series G2 Convertible Preferred
Stock.
5.1* - Opinion of Larry E. Cummings.
23.1* - Consent of Arthur Andersen LLP.
23.2* - Consent of Gaffney, Cline & Associates, Inc.
23.3* - Consent of Larry E. Cummings (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 of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) 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.
II-2
(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 of 1933;
(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 thereof) 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 SEC pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no
more than a 20 percent 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 b(1)(i) and b(2)(ii) above do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the SEC
by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that, in the opinion of the SEC, 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.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
II-3
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus 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.
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 Houston, State of Texas, on November 30, 2001.
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.
Signature Title Date
*
----------------------------------- Chairman of the Board and Chief
Mikel D. Faulkner Executive Officer (Principal
Executive Officer)
*
----------------------------------- President, Chief Operating Officer
Bruce N. Huff and Director
*
----------------------------------- Vice Chairman and Director
Stephen C. Voss
*
----------------------------------- Director
J. William Petty
*
----------------------------------- Director
Michael M. Ameen, Jr.
*
----------------------------------- Director
Hobart A. Smith
*
----------------------------------- Director
Larry Akers
*Larry E. Cummings, 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/ Larry E. Cummings
-----------------------------------
Larry E. Cummings, Attorney-in-Fact
II-4
INDEX TO EXHIBITS
Sequentially
Exhibit No. Exhibit Numbered Page
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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 Designations, Powers, Preferences and
Rights of Series A Cumulative Convertible Preferred
Stock, $1.00 par value, of Harken Energy Corporation
(filed as Exhibit 4.1 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 Designations, Powers, Preferences and
Rights of Series B Cumulative Convertible Preferred
Stock, $1.00 par value, of Harken Energy Corporation
(filed as Exhibit 4.2 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).
4.4 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).
4.5 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 fiscal quarter
ended September 30, 1995, File No. 0-9207, and
incorporated by reference herein).
4.6 Rights Agreement, dated as of April 6, 1999, by and
between Harken Energy Corporation and ChaseMellon
Shareholder Services L.L.C., as Rights Agent (filed
as Exhibit 4 to Harken's Current Report on Form 8-K
dated April 7, 1999, File No. 0-9207, and
incorporated by reference herein).
4.7 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, 1999, File No. 0-9207, and
incorporated by reference herein).
4.8 Certificate of Designations, Preferences and Rights
of Series F Convertible Preferred Stock (filed as
Exhibit 4.8 to Harken's Quarterly Report on Form
10-Q for the period ended June 30, 1998, File No.
0-9207, and incorporated by reference herein).
4.9 Certificate of Designations, Preferences and Rights
of Series G1 Convertible Preferred Stock (filed as
Exhibit 4.9
Sequentially
Exhibit No. Exhibit Numbered Page
----------- --------------------------------------------------------- ------------------
to Harken's Annual Report on Form 10-K
for the fiscal year ended December 31, 2000, File
no. 0-9207, and incorporated by reference herein).
*4.10 Certificate of Designations of Series G2 Convertible
Preferred Stock.
*5.1 Opinion of Larry E. Cummings.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Gaffney, Cline & Associates, Inc.
*23.3 Consent of Larry E. Cummings (included in opinion
filed as Exhibit 5.1).
*24.1 Powers of Attorney.
* Filed herewith.
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