Harken Reports 45% Increase in Operating Margin in 2004

Harken Reports 45% Increase in Operating Margin in 2004 


DALLAS, Texas, March 16  /PRNewswire-FirstCall/ -- Harken Energy Corporation
("Harken") (AMEX:HEC) today reported financial results for the year ended
December 31, 2004.  In 2004, Harken continued in its efforts to improve its
capital structure while focusing on developing its oil and gas assets and
improving cash flow from operations.  As summarized below, Harken ended 2004
with approximately $28.6 million in Cash, outstanding Debt of $8.6 million, and
positive Working Capital of approximately $21.8 million, a 272% increase over
the prior year.

   Balance Sheet Summary:

                                                  Year Ended
                                                  December 31,
   (Thousands of dollars)                   2003               2004

   Current ratio (1)                     1.88 to 1          2.54 to 1
   Working capital (2)                      $7,886            $21,844
   Cash                                    $12,173            $28,632
   Total debt                               $7,360             $8,578
   Total cash less debt                     $4,813            $20,054
   Stockholders' equity                    $52,761            $56,326
   Total debt to equity                  0.14 to 1          0.15 to 1

   (1)  Current ratio is calculated as current assets divided by current
        liabilities
   (2)  Working capital in the difference between current assets and current
        liabilities





Additionally, in 2004 Harken generated almost $13 million in Operating Margin,
(non-GAAP; see reconciliation below) an increase of approximately 45% from 2003
results.

   Operating Results:

                                                       Year Ended
                                                       December 31,
                                                  2003             2004

   Total Revenues                             $27,290,000      $29,995,000
   Oil and Gas Operating Expenses               9,469,000        7,964,000
   General and Administrative Expenses          9,210,000        9,222,000
      Operating Margin (Non-GAAP; see
       Reconciliation below)                    8,611,000       12,809,000
   Depreciation and Amortization                8,941,000       10,713,000
   Accretion Expense                              460,000          388,000
   Increase in Global Warrant Liability             7,000   (A) 14,207,000
   Litigation and contingent liability
    settlements, net                            1,125,000               --
   Interest Expense and Other, net              3,394,000          414,000
   Gains from Repurchases / Exchanges of
    Convertible Notes                           5,525,000          155,000
   (Loss)/Gain on Investment                     (488,000)         990,000
   Income Tax (Expense) / Benefit                 184,000         (579,000)
   Minority Interest of Subsidiary                (89,000)        (323,000)
   Loss Before Cumulative Effect of Change
    in Accounting Principle                      (184,000)     (12,670,000)
   Cumulative Effect of Change in
    Accounting Principle                         (813,000)              --
   Net Loss                                     $(997,000)    $(12,670,000)
   Accrual of Dividends Related to
    Preferred Stock                            (3,676,000)      (2,884,000)
   Exchange of Preferred Stock                         --       (1,123,000)
   Payment of Preferred Stock Dividend
    Liability In Common Stock                   6,805,000        3,492,000
   Net Income (Loss) Attributed to
    Common Stock                               $2,132,000     $(13,185,000)
   Basic Net Income (Loss) per
    Common Share                                     0.02            (0.07)
   Basic Weighted Average Shares
    Outstanding                               112,694,654      201,702,235
   Diluted Net Income (Loss) per
    Common Share                                    (0.03)           (0.07)
   Diluted Weighted Average Share
    Outstanding                               112,790,327      201,702,235





Note (A) -- During 2004, there was a dramatic increase in Harken's 85% owned
subsidiary's, Global Energy Development PLC ("Global"), common share price from
approximately 50 UK pence at December 31, 2003 to 153 UK pence at December 31,
2004.  Global's shares are traded on the Alternative Investment Market of the
London Stock Exchange.  Correspondingly, the fair value of the Global Warrants
held by Outside Parties, issued in 2002, increased $14 million to approximately
$15 million at December 31, 2004.  The warrants are accounted for as a
derivative liability in accordance with SFAS No. 133 which requires the warrant
liability to be adjusted to estimated fair value each period with any changes
in value reflected in earnings.  The fair value of the warrants is calculated
by an outside third party firm and is based on the underlying market price of
the Global common stock.  Although Harken owns approximately 85% of Global and
has seen its market value as reflected in Global's market capitalization
increase from $25 million to over $80 million in 2004, Harken recorded an
unrealized loss related to the change in fair value of the Global Warrants of
$14 million during the year ended December 31, 2004.  Harken holds warrants,
issued in 2002, to purchase 6,487,481 of Global shares at 60 UK pence per
share.  The estimated fair market value of these warrants at December 31, 2004
was approximately $11.8 million, as calculated by a third-party firm.  Because
Global is a consolidated subsidiary, the increased value of these warrants held
by Harken is not reflected in the consolidated financial statements.

2004 Operations:

During 2004, Harken's revenues were positively affected by rising commodity
prices for natural gas and crude oil.  These increases more than offset our oil
and gas production declines in 2004.  Although Harken's 2004 consolidated net
natural gas production declined 16% to 1.8 Bcf and crude oil net production
declined 14% to 546,000 Bbls compared to 2003, our total revenues and other
increased 10% to approximately $30 million from approximately $27 million in
2003.

The decrease in Harken's domestic subsidiary's, Gulf Energy Management Company
("GEM"), oil and gas production in 2004 compared to the prior year was due to
the December 2003 sale of the majority of GEM's Texas panhandle properties and
due to Hurricane Ivan which passed through the Louisiana Gulf Coast in
September 2004.  Weather related shut downs of Gulf Coast properties required
extensive efforts and time to bring back on production.  By late fourth quarter
2004, the majority of all of our Gulf Coast properties had resumed normal
production.  The majority of GEM's oil and gas production is located along the
Gulf of Mexico.

Global's oil revenues increased in 2004 despite a 7% decrease in production
volumes due in part to declines in producing wells but due mainly to our
decision to workover certain wells that reduced oil production during the
workover process.  Oil production from newly drilled and completed wells
drilled during 2004 is expected to help reverse this decline in 2005.

In September 2004, Harken invested $12.5 million in a start-up energy company,
IBA, which was formed to focus primarily on opportunities created by the recent
deregulation of the energy markets in Eastern Europe.  It is anticipated that
IBA will engage in trading gas futures contracts, principally in Hungary as
well as in the United States.  IBA had minimal trading operations in 2004.  In
exchange for Harken's $12.5 million cash investment, Harken received 12,500
shares of nonvoting preferred stock along with warrants to purchase 48% of
IBA's common stock for a nominal amount.  Harken currently holds three of the
five IBA Board of Directors positions.  Harken's preferred stock investment
represents almost 100% of IBA's initial working capital as of December 31,
2004.

In accordance with generally accepted accounting principles, Harken has
consolidated the assets, liabilities and results of operations of IBA as of
December 31, 2004 and for the period from September 10, the closing date of the
transaction, through December 31, 2004.  IBA's net loss included in the
Consolidated Results of Operations for the period ended December 31, 2004 was
approximately $1 million.

2005 Outlook:

During 2005, Harken is concentrating on the development and growth of its oil
and gas assets and energy-based growth opportunities.  In February 2005,
Harken's Board of Directors approved the 2005 capital expenditure program of
approximately $34 million.  Of the 2005 capital expenditure budget,
approximately $16 million is related to GEM and approximately $18 million is
related to Global's planned capital expenditures.  Harken expects to fund these
capital expenditures through available cash on hand and through projected cash
flow from operations in 2005.

Chairman's Comment:

Alan G. Quasha, Harken's Chairman, stated, "In 2004, higher oil and natural gas
prices allowed us to improve our cash flow from operations.  Thus, for the
first time in a while, Harken was able to spend money towards rebuilding its
reserves and reversing its production declines.  The success we achieved with
the approximately $18 million we spent in 2004 should accomplish this reversal
and has given our Board of Directors the confidence to almost double our
drilling budget to $34 million in 2005."

More information is available in Harken Energy Corporation's Form 10-K for the
period ended December 31, 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 (Loss)

                                                        Year Ended
                                                        December 31,
                                                    2003            2004

   Net Loss (GAAP)                               $(997,000)   $(12,670,000)
    Cumulative Effect of Change in
     Accounting Principle                          813,000              --
    Minority Interest in Earning of
     Subsidiary                                     89,000         323,000
    Income tax Expense (Benefit)                  (184,000)        579,000
    (Gain) / Loss on Sale of Investment            488,000        (990,000)
    Gain on Extinguishment of Debt              (5,525,000)       (155,000)
    Loss from Increase in Global Warrant
     Liability                                       7,000      14,207,000
    Litigation and contingent liability
     settlements, net                            1,125,000              --
    Interest Expense and Other, net              3,394,000         414,000
    Accretion Expense                              460,000         388,000
    Depreciation and Amortization                8,941,000      10,713,000
   Operating Margin                             $8,611,000     $12,809,000





Management believes the presentation of this non-GAAP financial measure, in
connection with the results for the year ended December 31, 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, 2004
filed on March 16, 2005.  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.

  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, [phone], for Harken Energy

Corporation



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

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