Harken Reports Substantially Improved 2003 Results; Operating
Margin Increased Approximately 50% HOUSTON, March 26
/PRNewswire-FirstCall/ -- Harken Energy Corporation ("Harken")
today reported financial results for the year ended December 31,
2003.In 2003, Harken primarily focused resources and attention on
restructuring the balance sheet and generating increased operating
margin. As summarized in Table 1, Harken ended 2003 with positive
Working Capital of approximately $7.9 million, approximately $12.2
million in Cash, and outstanding debt of $7.4 million, reduced from
over $56 million of outstanding debt from the prior year. TABLE 1:
Key Restructuring Related Results Year Ended December 31,
(Thousands of dollars) 2002 2003 Current ratio (A) 0.24 to 1 1.88
to 1 Working capital / (deficit) (B) $ (33,523) $ 7,886 Cash $
6,377 $ 12,173 Total debt $ 56,667 $ 7,360 Total cash less debt $
(50,290) $ 4,813 Stockholders' equity $ 5,131 $ 52,761 Total debt
to equity 11 to 1 0.14 to 1 (A) Current ratio is calculated as
current assets divided by current liabilities (B) Working capital
in the difference between current assets and current liabilities As
set forth in Table 2, Harken also reported substantially improved
operating results. Harken's Net Loss, including the negative effect
of change in accounting principle of approximately $800,000,
improved to a Net Loss of approximately $1.0 million for 2003 as
compared with a Net Loss of approximately $9.8 million for 2002. In
addition, Net Income Attributed to Common Stock in 2003 improved to
approximately $2.1 million versus 2002's Net Loss Attributable to
Common Stock of $13.9 million. Additionally, in 2003 Harken
generated almost $9 million in Operating Margin, (non-GAAP; see
reconciliation below) an increase of approximately 50% from 2002
results. TABLE 2: Operating Results Year Ended December 31, 2002
2003 Total Revenues $ 25,711,000 $ 27,445,000 Oil and Gas Operating
Expenses 9,331,000 9,469,000 General and Administrative Expenses
10,298,000 9,210,000 Operating Margin (Non-GAAP; see Reconciliation
below) 6,082,000 8,766,000 Depreciation and Amortization 11,510,000
8,941,000 Full Cost Valuation Allowance 521,000 --- Provision for
Asset Impairment 400,000 --- Litigation and contingent liability
settlements, net 1,288,000 1,125,000 Interest Expense and Other,
net 5,723,000 4,504,000 Gains from Repurchases / Exchanges of
Convertible Notes 3,528,000 5,525,000 Income Tax (Expense) /
Benefit (237,000) 184,000 Minority Interest of Subsidiary 262,000
(89,000) Loss Before Cumulative Effect of Change in Accounting
Principle (9,807,000) (184,000) Cumulative Effect of Change in
Accounting Principle --- (813,000) Net Loss $ (9,807,000) $
(997,000) Accrual of Dividends Related to Preferred Stock
(4,110,000) (3,676,000) Payment of Preferred Stock Dividend
Liability In Common Stock --- 6,805,000 Net Income (Loss)
Attributed to Common Stock $(13,917,000) $ 2,132,000 Basic Net
Income (Loss) per Common Share (0.64) 0.02 Basic Weighted Average
Shares Outstanding 21,742,163 112,694,654 Diluted Net Income (Loss)
per Common Share (0.64) (0.03) Diluted Weighted Average Share
Outstanding 21,742,163 112,790,327 Harken's fourth quarter results
for 2003 were impacted by a $1.1 million accrual and expense
recorded in December 2003 related to the settlement of the Rice
lawsuit in the first quarter of 2004. In addition, Harken incurred
increased general and administrative costs of $900,000 in December
2003 related to severance costs for employees at Harken's former
Panhandle office along with year-end 2003 compensation.
Depreciation was negatively affected by approximately $300,000 as a
result of the sale of the Panhandle oil and gas properties in
December 2003 due to the divestiture of the associated reserves.
North American gross oil and gas revenues during 2003 were derived
from operations in Texas and Louisiana. In December 2003 Harken
sold the majority of its oil and gas properties located in the
Panhandle region of Texas for a gross sales price of approximately
$7 million in cash, subject to certain adjustments. In January
2003, a total of 946,765 shares of Harken common stock were paid to
holders of Series G1 and G2 Preferred stock in payment of a
dividend liability of approximately $7.4 million accrued as of
December 31, 2002. The January 2003 payment of Harken's Series G1
and Series G2 Preferred stock dividends with shares of Harken
common stock resulted in a $6.8 million increase, net of income
taxes paid on behalf of the preferred holders, to Net Income
Attributed to Common Stock for the Payment of Preferred Stock
Dividend Liability in Common Shares recognized in the Consolidated
Statement of Operations for the year ended December 31, 2003. For
further discussion of the accounting treatment for payment of
Series G1 and G2 Preferred stock dividends, see Harken's Form 10-K
dated March 25, 2004. "2003 was an excellent year for Harken,"
stated the Chairman, Alan G. Quasha. "We succeeded in our
objectives of restructuring the balance sheet, which had been
debt-laden, and strengthened our capital structure which positions
us now for significant growth. We decreased debt by over $50
million and ended the year with cash less debt of approximately $5
million. At the same time, we increased our stockholders' equity
from $5 million in 2002 to approximately $53 million in 2003, and
improved our net working capital by $41 million. Almost as
importantly, the restructuring was accomplished without penalizing
our operating results or our core asset base." Mr. Quasha
continued, "We were fortunate to have been helped by higher oil and
gas prices during much of 2003. As we look forward, we expect
revenues, earnings and cash flow to improve in 2004. We are
enthusiastic about both our drilling prospects and are encouraged
by existing oil and gas prices and thus, we have announced an $18
million drilling budget for this year. We have begun this effort
and we expect to finance it out of cash on hand and cash flow from
operations." More information is available in Harken Energy
Corporation's Form 10-K for the period ended December 31, 2003
which is available on the Company's website at
http://www.harkenenergy.com/ . Certain statements in this news
release including phrases such as "we expect," "we anticipate" and
"we hope" relating to Harken's revenue, profit, dividends, cash
flow 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 know 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 dated March 25, 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. NON-GAAP FINANCIAL
MEASURE The followingtable reconciles Operating Margin:
Reconciliation of Operating Margin to Net Loss Year Ended December
31, 2002 2003 Net Loss (GAAP) $ (9,807,000) $ (997,000) Cumulative
Effect of Change in Accounting Principle --- 813,000 Minority
Interest of a Subsidiary (262,000) 89,000 Income Tax Expense /
Benefit 237,000 (184,000) Gains from Repurchases / Exchanges of
Convertible Notes (3,528,000) (5,525,000) Interest Expense and
Other, Net 5,723,000 4,504,000 Litigation and Contingent Liability
Settlements, Net 1,288,000 1,125,000 Provision for Asset Impairment
400,000 --- Full Cost Valuation Allowance 521,000 --- Depreciation
and Amortization 11,510,000 8,941,000 Operating Margin $ 6,082,000
$ 8,766,000 Management believes the presentation of this non-GAAP
financial measure, in connection with the results for the year
ended December 31, 2003, provides useful information to investors
regarding our results of operations. 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 accordancewith GAAP. DATASOURCE: Harken Energy
Corporation CONTACT: Investor Relations of Harken Energy
Corporation, +1-281-504-4000, or Web site:
http://www.harkenenergy.com/
Copyright
Harken (AMEX:HEC)
Historical Stock Chart
From Jun 2024 to Jul 2024
Harken (AMEX:HEC)
Historical Stock Chart
From Jul 2023 to Jul 2024