(PR NEWSWIRE) Harken Announces Second Quarter Results and Prior Period Restatements
HOUSTON, Aug. 12 /PRNewswire/ -- Harken Energy Corporation (Amex: HEC)
("Harken") today reported results for the second quarter ended June 30, 1999
(in 000's, except for per share and weighted share amounts):
Second Quarter Six Months
Financial Data 1999 1998 1999 1998
(restated) (restated)
Total revenues $ 5,100 $ 4,896 $ 9,436 $ 9,258
EBITDA $ 778 $ 1,784 $ 1,867 $ 3,006
Net loss $ (2,795) $ (612) $(4,443) $(1,161)
Per share data:
Basic net loss per
common share,
including accretion
related to
preferred stock $ (0.01) $ (0.01) $ (0.09) $ (0.01)
Basic weighted average
common shares
outstanding 139,817,277 130,452,657 137,297,387 126,394,977
During the second quarter of 1999, Harken continued to benefit from the
additional cash flows resulting from the Company's increasing production
levels achieved in Colombia. Colombian oil production, which commenced in the
second quarter of 1998 increased from 14,000 barrels in 1998 to 104,000
barrels in the second quarter of 1999. Colombian oil revenues were $134,000
and $1,211,000 for the 1998 and 1999 second quarters, respectively.
Domestic oil production increased from 106,000 barrels in the second
quarter of 1998 to 110,000 barrels in the comparable quarter of 1999. Also,
domestic gas production increased from 469,000 MCF in the second quarter of
1998 to 550,000 MCF in the second quarter of 1999.
During the second quarter, Harken continued to have positive EBITDA, and
enjoyed the benefit of recovering oil and gas prices. Harken also improved
record production from its Colombian properties and the installation of its
first Colombian flow-line bringing its crude from the Alcaravan Block directly
into the country's main pipeline system. Harken's operating margin on oil and
gas sales, including DD&A, increased by about $900,000 during the second
quarter of 1999 compared to the second quarter of 1998. However, during this
quarter, interest income was down approximately $1.3 million from the
comparable period of 1998 due to the utilization of cash for continued
development of its Colombian properties and other financing activities.
Harken also saw general and administrative costs increase approximately
$800,000 during the quarter as it completed the relocation of its executive
offices to Houston, incurring a number of non-recurring charges. The
consolidation of offices in Houston should result in increased efficiencies
and potential cost savings in future periods. Additionally, interest expense
increased due to the issuance of the $85 million in European Convertible notes
in May of 1998, resulting in a full quarter of related interest expense in
1999 as compared with only 36 days in 1998. Finally, Harken incurred a charge
to earnings for the early extinguishment of debt related to the equity
conversion of a portion of its Colombian development finance agreements.
Harken is retroactively making a change in the accounting treatment that
was applied to the development finance agreements entered into by the Company
during 1997 and 1998 to provide funding for certain exploration activities in
Colombia. The restatements do not affect revenues, gross margin, cash, cash
flow from operations or working capital of the Company.
From October of 1997 until March of 1998, the Company entered into
development finance agreements that partly provided funding for the Company's
Colombian exploration programs. These development finance agreements
incorporated both elements of a conveyance of a net profit interest as well as
debt and equity financing. The Company and its independent accountants,
Arthur Andersen LLP, have historically treated these development finance
agreement transactions as a conveyance of a net profit interest with the
proceeds reflected as deferred revenues. Following recent discussions with
the SEC, the Company and its independent accountants have agreed to account
for these transactions as long-term liabilities under which interest is
recognized currently. In accordance with this change in accounting, the
Company is restating its financial statements for the periods beginning with
the fourth quarter of 1997 through the first quarter of 1999. The effects of
the restatements are as follows:
Year Ended
December 31, 1997
Previously
Reported Restated
Revenues:
Oil and gas operations $ 14,113 $ 14,113
Interest and other income 4,655 4,655
18,768 18,768
Costs and Expenses:
Oil and gas operating expenses 5,581 5,581
General and administrative expenses 6,222 6,222
Depreciation and amortization 5,183 5,183
Interest expense and other, net 1,530 2,003
18,516 18,989
Income Tax Expense 63 63
Net Income (Loss) $ 189 $ (284)
Basic and Diluted Net Income (Loss) per
Common Share $ 0.00 $ (0.00)
Total Assets $238,513 $238,780
Stockholders' Equity $157,881 $157,408
Quarters Ended
March 31, 1998 June 30, 1998
Previously Previously
Reported Restated Reported Restated
Revenues:
Oil and Gas operations $ 2,700 $ 2,700 $ 2,634 $ 2,634
Interest and other income1,662 1,662 2,262 2,262
4,362 4,362 4,896 4,896
Costs and Expenses:
Oil and gas operating
expenses 1,382 1,382 1,346 1,346
General and
administrative expenses 1,758 1,758 1,766 1,766
Depreciation and
amortization 1,130 1,130 1,286 1,286
Interest expense
and other, net 8 641 208 1,064
4,278 4,911 4,606 5,462
Income Tax Expense --- --- 46 46
Net Income (Loss) $ 84 $ (549) $ 244 $ (612)
Basic and Diluted
Net Income $ 0.00 $ (0.00) $ 0.00 $ (0.01)
(Loss) per
Common Share
Total Assets $ 247,964 $ 248,809 $ 365,569 $ 368,032
Stockholders'
Equity $ 160,893 $ 159,787 $ 232,740 $ 230,778
Quarter Ended Year Ended
September 30, 1998 December 31, 1998
Previously Previously
Reported Restated Reported Restated
Revenues:
Oil and gas operations $ 3,097 $ 3,097 $ 10,932 $ 10,932
Interest and
other income 2,657 2,657 8,838 8,838
5,754 5,754 19,770 19,770
Costs and Expenses:
Oil and gas
operating expenses 1,690 1,690 5,988 5,988
General and
administrative
expenses 2,018 2,018 9,404 9,404
Depreciation and
amortization 1,462 1,462 5,319 5,319
Valuation allowance 27,787 27,787 50,518 50,518
Interest expense
and other, net 322 1,241 963 4,294
33,279 34,198 72,192 75,523
Income Tax Expense --- --- 34 34
Net Income (Loss) $(27,525) $(28,444) $(52,456) $(55,787)
Basic and Diluted
Net Income
(Loss) per Common Share $(0.22) $(0.22) $(0.42) $(0.44)
Total Assets $331,019 $337,254 $304,538 $320,116
Stockholders' Equity $202,674 $199,792 $179,942 $176,138
Quarter Ended
March 31, 1999
Previously
Reported Restated
Revenues:
Oil and gas operations $ 3,080 $ 3,080
Interest and other income 1,256 1,256
4,336 4,336
Costs and Expenses:
Oil and gas operating expenses 1,458 1,458
General and administrative expenses 1,789 1,789
Depreciation and amortization 1,358 1,378
Interest expense and other, net 413 1,359
5,018 5,984
Income Tax Expense --- ---
Net Income (Loss) $ (682) $ (1,648)
Basic and Diluted Net Income (Loss) per
Common Share $ (0.07) $ (0.08)
Total Assets $ 262,499 $ 284,670
Stockholders' Equity $ 154,023 $ 149,253
Harken Energy Corporation ("Harken") explores for, develops and produces
oil and gas reserves domestically and internationally. The Company controls
acreage in Colombia and is active in the Paradox Basin in Utah, the Panhandle
region and Gulf Coast of Texas, the Magnolia area of Arkansas and the Carlsbad
area of New Mexico. Certain statements in this news release regarding future
expectations and plans for international oil and gas exploration and
development may be regarded as "forward looking statements" within the meaning
of the Securities Litigation Reform Act. They are subject to various risks,
such as the inherent uncertainties in interpreting engineering data related to
underground accumulations of oil and gas, drilling and operating risk and
timing, discussed in detail in the Company's SEC filings, including the Annual
Report on Form 10-K for the year ended December 31, 1998. Actual results may
vary materially.
SOURCE Harken Energy Corporation
-0- 08/12/99
/CONTACT: J. Marc Lewis of Harken Energy Corporation, 281-717-1300, or
fax, 281-717-1420, or email, mlewis@harkenenergy.com/
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 118626/
/Web site: harkenenergy.com
(HEC)
CO: Harken Energy Corporation
ST: Texas
IN: OIL |
