Harken Energy Reports $4.5 Million Operating Margin in the Third Quarter 2004

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,
[phone], for Harken Energy Corporation. 

DATASOURCE: Harken Energy Corporation



CONTACT:  Bevo Beaven, Vice President, or Bill Conboy, Senior Account

Executive, both of CTA Public Relations, [phone], for Harken Energy

Corporation



Web site:  http://www.harkenenergy.com/ 

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