Harken Energy Reports $4.5 Million Operating Margin in the Third
Quarter 2004 DALLAS, Nov. 8 /PRNewswire-FirstCall/ -- Harken Energy
Corporation (AMEX:HEC) reports quarterly financial results for the
period ended September 30, 2004. As summarized below, even with the
dampening effects from the temporary shut-in of offshore oil and
gas wells during a substantial portion of September 2004 due to the
severe storms from Hurricane Ivan in the Gulf Coast of Louisiana,
total oil and gas revenues in the third quarter of 2004 increased
to $8.3 million, an increase of 12% over the third quarter of 2003.
Non-GAAP Operating Margin increased to $4.5 million in the third
quarter of 2004, representing 48% growth over the same period in
the prior year, and 21% improvement as compared to the second
quarter of 2004. Three Months Ended Nine Months Ended September 30,
September 30, 2003 2004 2003 2004 (unaudited) (unaudited)
(unaudited) (unaudited) Total Revenues and Other $7,411,000
$8,288,000 $21,069,000 $23,123,000 Oil and Gas Operating Expenses
2,778,000 1,901,000 7,342,000 5,956,000 General and administrative
expenses 1,571,000 1,853,000 6,487,000 5,500,000 Operating Margin
(Non-GAAP; see reconciliation below) 3,062,000 4,534,000 7,240,000
11,667,000 Depreciation and Amortization 2,299,000 2,804,000
6,496,000 8,387,000 Interest Expense and Other, net 607,000 201,000
3,930,000 551,000 Loss from Increase in Global Warrant Liability --
(1,120,000) -- 11,361,000 Gain on Extinguish- ment of Debt -- --
(5,282,000) (325,000) Gain on Sale of Equity Securities -- -- --
(990,000) Income tax Expense (Benefit) 75,000 171,000 (276,000)
494,000 Minority Interest in Earning of Subsidiary 65,000 207,000
95,000 432,000 Income (Loss) Before Cumulative Effect of Change in
Accounting Principle 16,000 2,271,000 2,277,000 (8,243,000)
Cumulative Effect of Change in Accounting Principle -- -- (813,000)
-- Net Income (Loss) $16,000 $2,271,000 $1,464,000 $(8,243,000)
Accrual of dividends related to preferred stock (822,000) (911,000)
(2,818,000) (2,554,000) Exchange of preferred stock -- -- --
337,000 Payment of preferred dividends -- (565,000) 7,044,000
3,173,000 Net Income Attributed to Common Stock $(806,000) $795,000
$5,690,000 $(7,287,000) Basic Net Income (Loss) per Common Share
$(0.01) $0.00 $0.06 $(0.04) Basic Weighted Average Shares
Outstanding 134,913,094 205,765,217 93,738,732 198,424,912 Diluted
Net Income (Loss) per Common Share $(0.01) $0.00 $0.00 $(0.04)
Diluted Weighted Average Shares Outstanding 134,913,094 205,765,217
93,834,405 198,424,912 In the first nine months of 2004, Harken
generated $11.7 million in Operating Margin (non-GAAP; see
reconciliation), a 61% increase over the comparable period in 2003,
due largely to increased oil and gas prices, increased operating
efficiencies, and an 15% decrease in general and administrative
expenses as compared to the prior year period. Operations Summary
During the third quarter of 2004, Harken's domestic subsidiary,
Gulf Energy Management Company ("GEM"), increased oil and gas
revenues as compared to the prior year period due in part to
increased oil and gas prices as well as success in GEM's continued
development drilling program. The increase in oil and gas revenues
was dampened due to Hurricane Ivan which passed through the
Louisiana Gulf Coast in September 2004 shutting-down offshore oil
and gas wells and facilities for a large portion of the month.
GEM's production volumes in September 2004 from the Lake Raccourci
field and Main Pass 35 field and facility were substantially
reduced due to the severe storms. Overall damage to the wells and
facilities was minimal, and GEM's domestic oil and gas production
has fully resumed in October 2004. During the first nine months of
2004, oil revenues from Harken's Middle America subsidiary, Global
Energy Development ("Global"), increased 44%, compared to the prior
year period due to increased oil prices and crude oil production.
As previously announced, in September 2004, Global signed a new
Exploration and Production Contract with the National Hydrocarbons
Agency of the Republic of Colombia for the Rio Verde area, located
in the central Llanos Region. The contract assigns Global exclusive
exploration and production rights to 75,000 acres located
approximately 40 kilometers north of Global's Palo Blanco complex.
Balance Sheet Summary Harken continued to improve its Working
Capital by over 237% since year- end 2003 to approximately $27
million at September 30, 2004. Over the past twelve months,
Harken's balance sheet has remained strong as detailed below:
December 31, March 31, June 30, Sept. 30, 2003 2004 2004 2004
(audited) (unaudited) (unaudited) (unaudited) Current ratio (1)
1.88 to 1 2.86 to 1 3.72 to 1 4.36 to 1 Total debt to equity 0.14
to 1 0.08 to 1 0.08 to 1 0.18 to 1 Working capital / (deficit) (2)
$7,887,000 $10,449,000 $20,890,000 $26,587,000 Cash $12,173,000
$9,886,000 $22,439,000 $27,032,000 Total debt $7,360,000 $5,000,000
$4,167,000 $9,412,000 Total cash less debt $4,813,000 $4,886,000
$18,272,000 $17,620,000 Stockholders' equity $52,761,000
$59,622,000 $51,461,000 $52,140,000 (1) Current ratio is calculated
as current assets divided by current liabilities (2) Working
capital / (deficit) in the difference between current assets and
current liabilities Chairman's Comment: Alan G. Quasha, Harken's
Chairman, stated, "The Company's main focus and measurement of
performance this year has been to grow our operating cash flow.
Despite the adverse impact of Hurricane Ivan in September 2004, we
managed to grow our operating margin, due in large part to
favorable oil and gas prices. Nevertheless, we believe we are
heading in the right direction, are accelerating our developmental
drilling both domestically and in South America and are excited
about our drilling prospects." Mr. Quasha continued, "I would again
like to address the Global Warrant liability and caution against
placing too much emphasis on the non-cash accounting gain of $1.1
million for the change in the value of the liability in the third
quarter 2004. This gain stems from the decline in Global's common
share price during the third quarter, which we hope is temporary.
We expect the fundamental value of Global to continue to increase.
Because of accounting rules regarding derivatives, an increase in
the common share price of Global will result in a reported loss to
Harken, and as has happened in the third quarter 2004, a decline in
Global's common share price will result in a reported gain." More
information is available in Harken Energy Corporation's Form 10-Q
for the period ended September 30, 2004 which may be accessed
through the Company's website at http://www.harkenenergy.com/.
NON-GAAP FINANCIAL MEASURE Reconciliation of Operating Margin to
Net Income Three Months Ended Nine Months Ended September 30,
September 30, 2003 2004 2003 2004 (unaudited) (unaudited)
(unaudited) (unaudited) Net Income (Loss) (GAAP) $16,000 $2,271,000
$1,464,000 $(8,243,000) Cumulative Effect of Change in Accounting
Principle -- -- 813,000 -- Minority Interest in Earning of
Subsidiary 65,000 207,000 95,000 432,000 Income tax Expense
(Benefit) 75,000 171,000 (276,000) 494,000 Gain on Sale of Equity
Securities -- -- -- (990,000) Gain on Extinguishment of Debt -- --
(5,282,000) (325,000) (Gain)/Loss from Increase in Global Warrant
Liability -- (1,120,000) -- 11,361,000 Interest Expense and Other,
net 607,000 201,000 3,930,000 551,000 Depreciation and Amortization
2,299,000 2,804,000 6,496,000 8,387,000 Operating Margin $3,062,000
$4,534,000 $7,240,000 $11,667,000 Management believes the
presentation of this non-GAAP financial measure, in connection with
the results for the three and nine months ended September 30, 2004,
provides useful information to investors regarding the Company's
results of operations. Management also believes that this non-GAAP
financial measure allows investors to better evaluate on-going
business performance and the factors that influenced performance
during the period under the report. This non-GAAP financial measure
should be considered in addition to, and not as a substitute for,
financial measures prepared in accordance with GAAP. Certain
statements in this news release including phrases such as "in our
view", "we believe", "we consider", "we expect," "we anticipate"
and "we hope" relating to Harken's revenue, profit, dividends, cash
flow, securities held by Harken and earnings expectations;
statements regarding future expectations and plans for oil and gas
exploration, development and production; and statements regarding
commodity pricing expectations may be regarded as "forward looking
statements" within the meaning of the Securities Litigation Reform
Act. These forward-looking statements reflect the current view of
management with regard to its plans and expectations and other
future events. Management's current view and plans, however, are
subject to numerous known and unknown risks, uncertainties and
other factors that may cause the actual results, performance,
timing or achievements of Harken to be materially different from
any results, performance, timing or achievements expressed or
implied by such forward-looking statements. The various
uncertainties, variables, and other risks include those discussed
in detail in the Company's SEC filings, including the Annual Report
on Form 10-K for the fiscal year ended December 31, 2003 filed on
March 26, 2004 and its Form 10-Q for the quarter ended June 30,
2004 filed on August 12, 2004. Although Harken believes that the
expectations reflected in the forward-looking statements of this
announcement are reasonable, it can give no assurance that such
expectations will prove to be correct or that unforeseen
developments will not occur. Harken undertakes no duty to update or
revise any forward-looking statements. Actual results may vary
materially. For further information, please contact Bevo Beaven,
Vice President, or Bill Conboy, Senior Account Executive, both of
CTA Public Relations, +1-303-665-4200, for Harken Energy
Corporation. DATASOURCE: Harken Energy Corporation CONTACT: Bevo
Beaven, Vice President, or Bill Conboy, Senior Account Executive,
both of CTA Public Relations, +1-303-665-4200, for Harken Energy
Corporation Web site: http://www.harkenenergy.com/
Copyright
Harken (AMEX:HEC)
Historical Stock Chart
From May 2024 to Jun 2024
Harken (AMEX:HEC)
Historical Stock Chart
From Jun 2023 to Jun 2024