Harken (AMEX:HEC)
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Harken Announces New Venture to Capitalize on Energy Deregulation
in Eastern Europe
DALLAS, Sept. 13 /PRNewswire-FirstCall/ -- Harken Energy Corporation
(AMEX:HEC) is pleased to announce that it has made an investment in
International Business Associates, Ltd. (IBA), a privately held company that
will focus primarily on opportunities created by the recent deregulation of the
energy markets in Eastern Europe. IBA's planned transactions will consist
primarily of physical purchases of natural gas, use of pipeline capacity, fuel
management and available storage. IBA intends to capitalize upon the skills,
knowledge and relationships that IBA's principals have developed through their
five year presence in Hungary, the Ukraine and Russia.
Harken, through a wholly owned subsidiary, will invest $12.5 million of cash in
IBA in exchange for redeemable preferred stock and warrants to purchase 48% of
the common stock of IBA. In addition, Harken will have majority control on the
board of directors of IBA.
In commenting on this investment, Alan G. Quasha, the Chairman of Harken said,
"The market opportunity in Eastern Europe, in general, and Hungary,
specifically is quite significant. This investment will complement our
existing international activities and enable us to gain access and participate
in certain aspects of the midstream natural gas business in Eastern Europe and
the United States. We believe IBA will over time prove to be a key contributor
to Harken's development as an independent international oil and gas company."
IBA will be led by John Kean, Jr., who will serve as IBA's Chairman, President
and Chief Executive, and Stanley J. Brownell, who will serve as IBA's Chief
Operating Officer. Both principals have been intimately involved in energy
deregulation in Eastern Europe.
Continuing, Mr. Quasha stated, "The reasons for our optimism include:
* IBA's team has a proven strategy and track record with strong ties to
market participants, including their combined forty years of
experience in the U.S. natural gas industry;
* IBA has the potential to become an important player in the Eastern
Europe region, and we would expect the cash flow from IBA's operations
to become significant to Harken;
* IBA's team has knowledge and contacts in the Eastern Europe natural
gas markets;
* IBA is being capitalized to build its business without the need for
significant leverage;
* We have been and remain interested in international exploration and
production opportunities, and this venture could present us with
important insights, relationships and opportunities in the Eastern
Europe region; and
* The expertise and experience of moving and trading energy commodity
products in the U.S. and abroad is becoming increasingly important in
maximizing value in very volatile global energy markets."
Harken Energy Corporation is engaged in oil and gas exploration, development
and production operations both domestically and internationally through its
various subsidiaries. Additional information may be found at the Harken Energy
Web site, http://www.harkenenergy.com/, or by calling Bevo Beaven or Bill
Conboy at CTA Public Relations at (303) 665-4200.
This announcement may contain forward-looking statements as defined by the
Securities and Exchange Commission. Nonetheless, Harken, believes that the
significance of the announced investment and future expectations should be
conveyed to its stockholders. The forward-looking statements in this
announcement reflect the current view of management with regard to future
events and 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. These risks, uncertainties and other factors
include, among others, the risks associated with the gas trading industry in
general, the nascent nature of gas markets in Eastern Europe, and the risks
described in Harken's filings with the Securities and Exchange Commission
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 and six months
ended June 30, 2004 filed on August 12, 2004. Statements regarding future
production are subject to all of the risk and uncertainties normally associated
with exploration, development and production of oil and gas. These risks
include, without limitation, variability in the price received for oil and gas
production, lack of availability of oil field goods and services, environmental
risks, drilling and production risk, risk related to offshore operations, and
regulatory changes. Investors are cautioned that any such statements are not
guarantees of future performance and that actual results or developments may
differ materially from those projected in the forward-looking statements.
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.
Contact: Bevo Beaven, Vice President
Bill Conboy, Senior Account Executive
CTA Public Relations
303-665-4200
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/