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JUNE 2007
HKN, Inc.HKN, Inc.
Except for historical information, the matters discussed in this presentation may
be regarded as "forward-looking statements" within the meaning of the
Securities Exchange Act of 1934, as amended. Forward-looking statements are
based on the opinions and estimates of management at the time the
statements are made and involve risks and uncertainties that may cause the
actual results of HKN, Inc. to be materially different from those expressed or
implied by such forward-looking statements. These risks and uncertainties are
discussed in detail in HKN, Inc.’s SEC filings, including its Annual Report on
Form 10-K for the fiscal year ended December 31, 2006. HKN, Inc. undertakes
no duty to update or revise any forward-looking statements.
SAFE HARBOR STATEMENT
An established independent energy company. Listed on the American StockExchange, traded under the symbol of HKN.
Engaged directly in the energy industry through oil and gas exploration,exploitation, development and production activities.
Engaged indirectly in the energy industry through the management of investmentsin energy industry securities on domestic and international security exchanges.
COMPANY OVERVIEW
Executive Management team with extensive energy industry experience and expertise.
James W. Denny III
Vice President of HKN, Inc.
President of Gulf Energy Management37 years of Operational Experience * Registered Professional Engineer
Certified Earth Scientist * BS – Science
Former Vice President of Operations for Polaris Exploration and Sr. Engineer for Xplor Energy
Richard O. Cottle
Vice President of Gulf Energy ManagementBSFE in Fuels Engineering * Former Engineering Experience for Mobil and Marathon Oil
20 years Energy Experience
Stan Brownell
Consultant - Energy and TradingPresident of Strategically Justified Businesses, LLC
MBA – Finance and BS – Math & Physics
Former COO of IBA, LTD and NUI Energy Brokers, Inc.
Other Energy Experience with Small to Medium Independents
Mark S. Holt
Land ManagerBBA – Petroleum Land Management * Former Vice President of Land for 3TEC Energy Corp.
28 years Experience in Exploration, Production, Acquisition and Divestment
Kris Hartmann
Staff Geologist18 years of Energy Experience
BS – Science * Former Geologist for New London Oil, Inc.
MANAGEMENT OVERVIEW
Mikel D. FaulknerPresident and Chief Executive Officer
(see next page for summary of business experience)
Anna M. WilliamsVice President of Finance and Chief Financial Officer
15 years of Financial Experience * CPA with Audit Management Experience
SOX 404 Compliance Officer * BBA - Accounting
Elmer A. JohnstonVice President - General Counsel and Secretary
16 years of Legal Experience * Former Sr. Counsel of Global Energy PLCFormer Associate Attorney for Winstead, Secherest & Minick * BBA - Accounting
JD and LLM – Energy and Environment
Rodger L. EhrlishTreasurer
20 years of Energy Experience * CPA * BBA - AccountingSOX 404 Assistant Compliance Officer * Former Director of Finance for Global Energy PLC
Sarah GaschChief Accounting Officer
10 years Financial Experience * BBA - Accounting
Former Financial Reporting Manager of Magnum Hunter Resources
Alan G. Quasha
Chairman(see next page for summary of business experience)
Board of Directors with extensive energy capital fund raising capabilities, andlegal and financial expertise.
Michael M. Ameen, Jr.
Independent Consultant on Middle East AffairsFormer Director of American Near East Refugee Aid
Former Director of Amideast
Former Director of Middle East Institute
Former Director of International College in Beirut, Lebanon
Former Vice President of Mobil Middle East Development Corporation
Member of Energy Intelligence Group International Advisory Board
H. A. Smith
Consultant to Smith International Inc.,
an oil field service companyFormer Vice President of Customer Relations for Smith International, Inc.
Former Director of Brigham Exploration Company
Member of Brigham Exploration Company Audit Committee
BOARD OF DIRECTORS OVERVIEW
Mikel D. Faulkner
President and Chief Executive Officer of HKN, Inc.30 years of Energy Related Experience
Undergraduate Degree in Math and Physics
MBA in Business Administration
CPA with Large Public Accounting Firm Experience
Officer in US Naval Nuclear Power Program
Chairman of Global Energy Development PLC
Dr. J. William Petty
Professor of Finance and the W.W. Caruth Chairholder ofEntrepreneurship at Baylor University
Former Dean of the Business School at Abilene Christian University
Subject Matter Expert on a best-practices study by the American Productivity and Quality Center
Served on a research team for the Australian Department of Industry
Alan G. Quasha
Chairman of the Board of HKN, Inc.President of Quadrant Management, Inc.
Former Director of Compagnie Financi re Richemont SA.
Former Director of American Express Fund
Former Governor of the American Stock Exchange
Harvard Law Degree
High Oil Prices
WHY HIGH OIL PRICES WILL NOT GO AWAY
Strong Economic GrowthLimited OPEC
Surplus Capacity
Strong Seasonal Product Demand
China’s Pent-UpDemand
Infrastructure LimitationsRisks To Supply
OPEC’s Conservative Management Style
Rising F&D Costs
Under Investment
Speculators
Weak U.S. $
• Alternative fuels a non-factor:
“Most experts agree that emerging renewables like wind, solar and biofuels will only contribute 2%
of the world’s total energy needs in 2030” Source: Chairman of ExxonMobil, Feb 07
• Depleting resources through under-investment / giant producing fields now old and declining:
“Large number of the giant older fields which anchor the world’s hydrocarbon production base have
now started to decline” Source: Matthew Simmons / Author of Twilight in the Desert, Oct 06
ENERGY BOOM SET TO CONTINUE
Oil and gas reserves originally are predicted from a geologic concept, defined by seismic, discovered bydrilling and confirmed by production. This sequence of development is reflected in four chronological
categories of reserves:Potential (P4), Possible (P3), Probable (P2), Proved (P1)
RESERVE REPORT DATED DECEMBER 31, 2006
Note:(1) Utilizing production history, geologic data and industry standard development practices these reserves have
been evaluated by two well known independent energy firms, Netherland Sewell and Associates, Inc. &Sproule Associates Ltd. as of December 31, 2006 and August 31, 2006 respectively.
Geologicalconcept
LeaseAcreage
Agreement
EvaluateAcreage
Inventory
Independent Scientific Evaluation (Note 1)
414.0“Potential”
BCFE
8.7“Possible”
BCFE
P4 P3 P2
4.2“Probable”
BCFE
18.1“Proved”
BCFE
2.7BCFE
“Production”
463,000 Gross Acres
P1
RESERVES VALUED BY INDEPENDENT ENGINEERS
Principally in the onshore and offshore Gulf Coast regions of South Texas and Louisiana.
GULF COAST OPERATIONS
• During 2006, the Company drilled or participated in the drilling of 9 exploration anddevelopment wells and successfully completed 6 of those wells (Reserve additions forthe year as a result were approximately 2 Bcfe).
• At the end of 2006, the Company operated or owned a non-operating working interest in70 oil wells, 73 gas wells, and 14 injection wells in the Gulf Coast area of the UnitedStates.
• Proved reserves at December 31, 2006 were calculated to be $71 million of Future NetRevenues and $51 million of 10% Discounted Future Net Revenues by an independentengineering group.
ErathFranklin
Rusk
Panola
Henderson
De SotoNavarro
Somervell
Caldwell
HillComanche
TensasRed River
JasperSmith
Claiborne
Bosque
Winn
Natchitoches
Cherokee
nels
Coleman Brown Anderson
Simpson
Copiah
HamiltonFreestone
Shelby
CatahoulaLa Salle
Jefferson
McLennan
NacogdochesSabine
Jones
Limestone
Grant
Covington
Jefferson Davis
Concordia
Lawrence
Adams
Mills
Lincoln
Coryell San Augustine
Leon
Franklin
SabineHouston
Concho
AngelinaFalls RapidesMcCulloch
San SabaLampasas
Marion Lamar Forrest Perry
Trinity
Wilkinson
Vernon
Robertson
AmitePike Walthall
Avoyelles
Bell
Newton
JasperPolkMilam
MadisonMenard
TylerWalker
Burnet Pointe Coupee
Pearl River
Washington
Tangipahoa
St. HelenaEast Feliciana
West Feliciana
West Feliciana
Evangeline
Brazos
MasonLlano
Stone
Williamson
San Jacinto
AllenBeauregard
Grimes
St. Landry
Burleson
East Baton Rouge
Kimble
St. Tammany
Harrison
West Baton Rouge LivingstonHancock
Travis
MontgomeryLeeHardin
Gillespie
BlancoSt. Martin
St. Martin
Iberville
Calcasieu
Jefferson Davis
Liberty
Acadia
Bastrop
Washington
LafayetteAscension
Hays
St. John the Baptist
Kerr
Waller
Orange
JeffersonFayetteHarris
St. James
Orleans
Vermilion
Kendall
Austin
St. Charles
Real
Assumption
Caldwell
Cameron
St. Bernard
Comal
Colorado
St. Mary
LaFourche
Bandera
Plaquemines
Chambers
Guadalupe
Fort Bend
GonzalesBexar
Medina
Iberia
Lavaca
Wharton
Uvalde
Brazoria
Galveston
Galveston
Galveston
Wilson
De Witt
Terrebonne
JacksonAtascosa
Matagorda
Jefferson
Jefferson
Victoria
ZavalaFrio
Goliad
Live Oak
BeeLa Salle McMullen
Dimmit
Refugio
Calhoun
CalhounCalhoun
CalhounCalhoun
Webb
San Patricio
Aransas
AransasAransas
DuvalJim Wells Nueces
Nueces
Kleberg Kleberg
Jim HoggZapata Brooks
Kenedy
Kenedy
Kenedy
Starr
Hidalgo
Willacy Willacy
Cameron
Cameron
Texas
Louisiana
Mississippi
TerrebonneTerrebonne
Lapeyrouse
Point Au Fer
Mosquito BayouFohs-Shallow
Old Ocean
Inexs
/BP 2
D Are
a
Proposed 3D
Dawdy
S. Smithers
MustangSpeaks
Chenier Purdue
Jeanerette Verret
Abbeville
Sorrel
Creole
Allen
Rayburn
E. Holly
Wharco
Karnes
Iberia
Bay
Beach
Raymondville
Son Of Tiger
Lake
Creek
Ranch
NW
Luck
Shiling
South
Beach
Bayou
E. Lake
Branville
Bright
Raccourci
35
Point a la
Pass
HacheLake
Main
Raccourci
35
Point a la
Pass
HacheLake
2007 Activity MapGulf Coast
Onshore Texas & Louisiana
SIGNIFICANT PROPERTIES
3,000 Square Miles of 3D Seismic
20+ Year Database of Technical Data
Experienced in-house staff
SE Louisiana
Dedicated 2 manG&G Team with 40years experienceeach
Louisiana Gulf CoastKitty Hawk Energy
Six man generationshopVery experiencedand proven staffLong term
relationship
Texas Gulf CoastDrill Partners
Two 2-man G>eams working large2D database frommajor oil and gascompanyThree drill ready
prospects generated todate
35 square mile 3Dproposed to delineateeight additional leads
Relationships
Combined 80+ years ofindustry experience forProspect Review Team
Participation in industryorganizations and forums:•Exploration managers•Society of IndependentProfessional Earth Scientists(SIPES)•Software EngineeringInstitute (SEI)•Producers forum
CurrentProspect Inventory
2 Pilot CBM ProjectsSouth Louisiana6 wells in 3 parishesSouth Texas13 wells in 6 counties
40 mi2 New 3-D Seismic
PIPELINE OF PROSPECTS
COAL BED METHANE OPERATIONS
• Hold three coal bed methane exploration and development agreements in Indiana and Ohio.
• CBM assets generally have a longer reserve life, 15-20 years longer than Gulf Coast assets.
• 420,000 Gross acres contracted with third party with successful track record in coal bed methane developments.
• Efforts in 2006 and through March 31, 2007 included:• The Indiana Posey Prospect – The Company has funded approximately 80% of a $1.28 million project for the first of two pilot well
projects on the Indiana Prospect. The drilling of the first three pilot wells was completed and the commencement of the drilling of twoadditional pilot wells began in the first quarter of 2007.
• The Ohio Cumberland Prospect – The Company elected to proceed and fund Phase II of the agreement. With regard to Phase II, theCompany made an additional $500 thousand prospect acquisition payment and intends to fund a $1.28 million project in 2007 for thefirst two pilot well projects on the Cumberland Prospect.
• The Triangle Prospect Area in Ohio – The coring phase commenced in December 2006 and was completed during the first quarter of2007. The core samples are currently being analyzed. The Company may elect to proceed and fund a Phase II of pilot wells of thisprospect in 2007.
Significant holdings in Coal Bed Methane (CBM) Projects.
Posey Prospect Cumberland Project
Triangle Project
Global Energy Development PLC (“Global”) has exploration, development and production activitiesin Colombia and exploration activities in Panama and Peru. See www.globalenergyplc.com fordetailed information on Global.
INVESTMENTS
• Shares held by HKN, Inc.: 11,893,463 (approximately 34% of the outstanding common stock).
• Shares currently trading on the London Stock Exchange (AIM) under trading symbol GED.
• Price per share at May 31, 2007 was approximately 1.00 GBP or approximately $2.00 per share.
• Value per share at original listing was 50p, or approximately $0.90 per share.
GLOBAL ENERGY DEVELOPMENT, PLC
• Good Prospectivity
• “Colombia remains relatively unexplored. More than 80% of the country’s territory remains unexplored” Source: National Hydrocarbons
Agency of Colombia, Feb 07
• “Of Peru’s 18 basins, 7 basins are still unexplored and 4 basins are under-explored” Source: PeruPetro S.A., Dec 06
• Low Political and Economic risk with stable industry history - unbroken history of contract sanctity in areas of interest (Columbia & Peru).
• “Colombia has one of the most stable economies in Latin America, keeping a steady growth rate over the last few decades” Source:
PricewaterhouseCoopers, 2006
• “Election results in 2006 in Peru and Colombia have been more positive than expected…..Garcia’s victory in Peru is a positive for
investors………Uribe won Colombia’s May election with a stronger than expected mandate and the positive turnaround for Colombia continues
on pace” Source: Schroders, Nov 06
Contracts held
COLOMBIA
PERU
“Following in the footprints ( )of the majors”
Global has evaluated and contracted acreageheld by the ‘majors’ decades ago.
Strong historical data from previous activity.
PANAMA
1 Bolivar - Exxon, 1950s-70s2 Bocachico - Chevron/Texaco,
1950s-60s
3 Los Sauces - Elf
4 Rio Verde - Elf5 Luna Llena - Oxy/ Shell, 1980s6 Valle Lunar - Oxy/ Shell, 1980s
7 Alcaravan - Texaco
8 Los Hatos - Texaco9 Block 95 - Amoco, 1970s10 Garachine - Gulf Oil/Sinclair Oil/
local companies, 1920s-70s
Known producing basins
GLOBAL FOOTPRINT STRATEGY
Oil and gas exploration efforts are originally based on a geologic concept, defined by seismic, discovered bydrilling and confirmed by production. This sequence of development is reflected in 4 chronological categories ofreserves:
Potential (P4), Possible (P3), Probable (P2), Proved (P1)
GLOBAL INCREASED ALL CATEGORIES OF RESERVES IN 2006 OVER 2005
Note:Utilizing production history, geologic data and industry standard development practices these reserves havebeen evaluated by one of the world’s leading reserve engineering companies, Ryder Scott Company, basedupon an approximate Brent Price of $60.14 as of December 31, 2006.
Geologicalconcept
Negotiatecontract
EvaluateAcreage
Inventory
Independent Scientific Evaluation (Ryder Scott)
211,210,000“Potential”
barrels
62,351,000“Possible”
barrels
P4 P3 P2 P1
13,870,000“Probable”
barrels
5,540,000“Proved”barrels
400,000barrels
“Production”
$1.25 billionNPV @ 10%
$299 millionNPV @ 10%
$128 millionNPV @ 10%
8 contracts inColombia and Peru
GLOBAL RESERVES
Canadian growth strategy. Spitfire Energy, Ltd. is an independent public company (TSX-V:SEL)actively engaged in the exploration, development and production of crude oil, natural gas andnatural liquids in Western Canada.
INVESTMENTS
• Spitfire’s management owns 42% of SEL.
• HKN, Inc. currently owns approximately 10% of approximately 3 million of Spitfire’s currently outstanding shares.Last trade price was approximately 0.60 CDN or $0.56 at May 31, 2007.
• An emerging junior oil and gas company based in Calgary, Alberta.
• Business strategy involves a conservative approach to growth in net asset value per share by drilling internallygenerated exploitation opportunities, optimizing production and reducing operating costs and making selectedstrategic acquisitions.
• Strong inventory of land, seismic and drilling locations for multi-zone natural gas and medium oil prospects,including 24,608 net acres of undeveloped land.
• Capitalize on team’s local experience (over 25 years average per person of industry experience) to exploit assets andmanage them effectively.
SPITFIRE ENERGY LTD.
During 2006, the company began to manage investments in energy industry securities traded on domesticsecurity exchanges. At December 31, 2006, we held approximately $8 million in notional value of exchange-traded options on future contracts and common stocks.
INVESTMENTS
• Commenced August 15, 2006.
• Managed through an Investment Committee with periodic oversight by the Board of Directors.
• Portfolio includes investments associated with approximately 20 to 30 energy stocks. Maximum notional valueis limited to $20 million.
$ 484,000 $ 292,000Total return on investments (including interest)
$ 9,610,000$ 7,949,000Total notional exposure
19.11 % 11.7 %Annualized rate of return (prior to expenses)
(Start-up period of 4.5 months)
20072006
March 31,December 31,
MARKET INVESTMENT ACTIVITIES
$ 27,023 $ 28,962 $ 33,480Working Capital (1)
$ 26,260 $ 31,664 $ 29,269Cash and Other Cash Equivalents
$ 2,534 $ 11,189 $ 6,624Operating Margin (3)
$ - $ - $ -Long Term Debt
$ 449 $ 257 $ 25,819Net Income (4)
$ 1,086 $ 5,649 $ 6,950General and Administrative Expense
$ 5,810 $ 25,170 $ 18,862Revenues and Other
$ 112,850 $ 125,149 $ 150,489Total Assets (2)
4.36 to 13.29 to 13.19 to 1Ratio
8,041 12,627 15,272Current Liabilities
$ 35,064 $ 41,589 $ 48,752Current Assets
2007 (unaudited)2006 (5)2005 (5)
March 31,(In Thousands)
December 31,(In Thousands)
HKN, INC. FINANCIAL RESULTS
Notes:(1) Working capital is the difference between current assets and current liabilities.(2) Change in total assets primarily due to change in market value of Global.(3) “Non-GAAP” financial measure; operating margin is total revenues less oil and gas operating and general and administrative expenses.(4) Net Income in 2005 primarily due to gains on market sales of significant ownership in Global.(5) During 2006, we deconsolidated Global from our financial statements. These pro-forma balance sheets and results of operations presented above are
unaudited and give effect to the deconsolidation of Global as if it had been effective for all periods presented.
REASONS TO FOCUS ON HKN, INC.
• HKN, Inc. currently trading at a significant discount to book value:
Currently trading at approximately $0.10 per share under December 31, 2006 estimated book value per share of $0.48.
• Excellent Fundamentals:
Proved reserves audited by Netherland Sewell & Associates, $71 million FNR in Proved Reserves.
Diverse acreage portfolio with significant growth potential from development of CBM assets.
Profitable with cash flow from production directed towards capital expenditure and investments.
Cost containment and reduction in preferred securities obligations leading to several years ofimproving financials.
Significant upside growth potential from investments in Global, Spitfire, and market investmentactivities.
Significant upside growth potential from exploration efforts on the Gulf Coast and through CBM.
• Activity leading to increasing value:
Current and near-term drilling.
New strong and motivated operator.
Excellent fundamentals & industry metrics
APPENDICES
1.49 million BOE- no activity in 06ExplorationLos Sauces (Colombia)
Production,Development &Exploration
Exploration
Exploration
Production,Development &Exploration
Production &Development
Exploration
Production &Development
Status
211.21 million BOE81.8 million BOETotal
-5.2 million BOERio Verde (Colombia)
3.05 million BOE0.3 million BOELuna Llena (Colombia)
18.67 million BOE- not signedGarachine (Panama)
25.03 million BOE46.1 million BOEBolivar (Colombia)
-4.4 million BOEBocachico (Colombia)
162.97 million BOE21.7 million BOEBlock 95 (Peru)
-4.1 million BOEAlcaravan &Los Hatos (Colombia)
Exploration Potential Resources (P4) (asat 1 July 06)
Risked, Most Likely Case Recoverable
Barrels of Gross Resources
P1 + P2 + P3(as at Dec 06)
Contract / TEA Name
All contracts and TEAs currently 100% owned by Global
Proved plus Probable plus Possible Reserves independently reported by Ryder Scott Company, LP as at 31 Dec 05 & 31 Dec 06
Risked, Most Likely case recoverable barrels of gross resources independently reported by Ryder Scott Company, LP as at 1 July 2006
BOE – barrels of oil equivalent
GLOBAL SUMMARY OF ASSETS & RESERVES/RESOURCES
Note: Utilizing production history, geologic data and industry standard development practices these reserves have been prepared by one of the worlds leading reserve engineeringcompany, Netherland, Sewell & Associates, Inc.
$50,879,700$70,586,20018,138,9767,004,7041,855,712Total Proved Reserves
$11,343,800$20,708,0004,173,1461,510,160443,831Total
4,595,2009,462,2001,818,432825,852165,430Other
4,978,7008,657,3001,625,7780270,963Main Pass 35
$1,769,900$2,588,500728,936684,3087,438Lake Raccourci
Proved Undeveloped Reserves
$18,050,500$27,354,9005,813,6704,094,070286,600Total
2,998,4005,708,300962,315380,81996,916Other
2,529,2003,600,800562,548093,758Main Pass 35
2,034,0002,824,000765,183751,3772,301Raymondville
4,995,3008,229,8001,661,5961,318,06657,255Lapeyrouse
$5,493,600$6,992,0001,862,0281,643,80836,370Lake Raccourci
Proved Developed Non-Producing
21,485,40022,523,3008,152,1601,400,4741,125,281Total
3,362,8004,060,500746,072319,69471,063Other
13,531,40013,816,9006,100,33201,016,722Main Pass 35
1,707,3001,838,300435,813367,43711,396Raymondville
2,416,3002,516,200469,579353,16119,403Lapeyrouse
$467,600$291,400400,364360,1826,697Lake Raccourci
Proved Developed Producing Reserves
PROVED RESERVE SUMMARY
($)($)MCFE(MCF)(BBLS)
VALUE @ 10%REVENUEGAS EQUIV.GASOILFIELD
PRESENTFUTURERESERVES
NET
GULF COAST RESERVESDECEMBER 31, 2006 RESERVE REPORT BY NETHERLAND, SEWELL & ASSOC.
GULF COAST MAJOR FIELD LISTING
Palace Exploration201.13LATerrebonne12.5%Energy XXI1Mosquito Bay
Energy XXI67.97LAAssumption5 %Rozel2E. Lake Verret
PetroQuest Energy and Torch
Oil & Gas Co.
3.40LALaFourche2.0%Petrohawk Energy4Lake Boeuf, SW
PetroQuest Exploration and
Fidelity E&P Co.
50.73LASt. Bernard12.5%Yuma E&P2Branville Bay
Couch Oil & Gas and Sundown
Energy, Inc.
28.50TXChambers5-13%Yuma E&P2South Beach
Browning Oil Co., & Paloma
Resources, LLC
70.00 LAPlaquemines25.0%GEM2Bakers Bay
Stokes & Spiehler129.17LATerrebonne15%Rozel3Creole
Petro Quest Energy26.78LACameron.2-2%Petrohawk /Manti7Backridge
Castex Energy758.88LATerrebonne12.5%Energy XXI13Point Au Fer
Sharon Resources, Inc.,
Diaz Resources, Inc.
91.66TXColorado11.25%Camden Resources Inc.2Allen Ranch
SBN S. Texas 2005 Energy
Fund, Ltd.
2347.52TXWilacy7-27%Cabot (Cody Energy)25Raymondville
ExxonMobil, Rudman
Partnership, American National
Insurance., Unit Petroleum
2549.65LALaFourche7-56%GEM9Lake Raccourci
Apache Corp., Geoil, LLC,
Petrohawk Energy
432.16LATerrebonne10-28%Energy Partners Ltd. &
GEM
13Lapeyrouse
Primal Resources2500.69LAPlaquemines90-96%GEM69Main Pass 35
Key PartnersGEM
Net Acs.
StateCounty/
Parish
GEM
Interest
OperatorWell
Count
Field Name
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Jan-07 Feb-07 Mar-07 Apr-07 May-07
0.00
0.25
0.50
0.75
1.00
Jan-07 Feb-07 Mar-07 Apr-07 May-07
Stock Price (Date of Press Release)
Daily Share Trading Volume (Date of Press Release)
01/03
Opening
Price: $.49
02/28 - HEC Reports Higher Revenue,
Higher Operating Margin and Repurchase of
Common Shares Outstanding in 2006
5/8 - HEC
Reports Profitable
First Quarter 2007
04/02 HEC Announces
Expanded Stock
Repurchase Program,
Corporate Name Change
and Reverse Stock Split
(In
th
ou
sa
nd
s)
04/16 HEC
Announces Progress
on Stock
Repurchases
2007 HEC STOCK PRICE VS VOLUME
CORPORATE DATA
The following table provides information about purchases by the Company during
the period October 1, 2005 through May 31, 2007 of its Common Stock:
17,310,6007,689,400$0.584117,689,400Total
17,310,600908,900$0.46648908,900January 1, 2007 through May 31, 2007 (2)
3,219,5004,365,800$0.574624,365,800January 1, 2006 through December 31, 2006
7,585,3002,414,700$0.662932,414,700October 1, 2005 through December 31, 2005 (1)
(d)
Maximum Number of Shares that
May Yet Be Purchased Under the
Plans or Programs (2)
(c)
Total Number of Shares
Purchased as part of
Publicly Announced
Program (1)
(b)
Average Price Paid per
Share
(a)
Total Number of
Shares Purchased
Period
1. In October 2005, the Company’s Board of Directors authorized a stock repurchase program under which the Company wasauthorized to repurchase up to 10 million shares of its outstanding Common Stock.
2. Effective April 2, 2007, the Board of Directors expanded the stock repurchase program to a total of 25 million shares. As of May31, 2007, 17.3 million shares remained available for repurchase under the expanded repurchase program.
SELECTED FINANCIAL DATA REFLECTING BALANCE SHEET“CLEAN UP” AND SIMPLIFICATION OVER PAST 5 HISTORICAL PERIODS
(1) Working capital is the difference between current assets and current liabilities.(2) See “Notes to Consolidated Financial Statements, Note 11 – Stockholders’ Equity and Note 9 – Redeemable Preferred Stocks” contained in Part II, Item 8 of our Form 10-K for the year ended December 31, 2006, for
further discussion of our preferred stock.(3) During 2006, we deconsolidated Global from our financial Statements. See “Notes to Consolidated Financial Statements, Note 2 – Investment in Global” contained in Part II, Item 8 of our Form 10-K for the year ended
December 31, 2006, for further discussion.
44,000 50,000 50,000 - -Series M preferred stock outstanding (2)
- - 10,000 - -Series L preferred stock outstanding (2)
- - 50,000 - -Series J preferred stock outstanding (2)
- - 78,000 - -Series G4 preferred stock outstanding (2)
- - - 77,000 -Series G3 preferred stock outstanding (2)
1,000 1,000 2,000 62,000 93,000Series G2 preferred stock outstanding (2)
1,600 1,600 14,000 325,000 403,000Series G1 preferred stock outstanding (2)
$ 105,115 $ 90,267 $ 49,532 $ 51,481 $ 4,439Stockholder's equity
$ 7,407 $ 29,488 $ 33,843 $ 15,888 $ 32,593Total
- - 14,858 651 644Global warrant liability
7,407 6,301 5,954 6,305 4,664Asset retirement obligations
- - - 3,239 7,369Accrued preferred stock dividends
- 12,500 - - -Global senior convertible notes
- - - 2,020 -Senior secured notes
- - - - 5,000Investor term loan
- - - - 3,810Bank credit facilities
- 10,687 6,120 - -Share based compensation liability
$ - $ - $ 6,911 $ 3,673 $ 11,106Convertible Notes Payable
Long-term obligations:
$ 125,149 $ 156,163 $ 109,575 $ 82,466 $ 86,729Total assets
$ 28,962 $ 43,617 $ 20,636 $ 6,890 $ (34,215)Working capital/(deficit) (1)
12,627 19,045 17,824 11,696 46,385Current liabilities
$ 41,589 $ 62,662 $ 38,460 $ 18,586 $ 12,170Current assets
(in thousands except for share amounts)Balance Sheet Data:
2006 (3)2005200420032002
December 31,
CORPORATE DATA
Shares issued and outstanding at March 31, 2007:
Common: 219,794,387 Preferred: Series G1: 1,600Series G2: 1,000Series M: 44,000
Warrants: Series L: 3,182,836Series M: 4,255,965
No stock options are outstanding
Auditors:
Hein & Associates, Dallas, TX
Legal Counsel:
Hallett & Perrin, Dallas, TX
Independent Reserve Engineering:
Netherland Sewell and Associates, Inc., Houston, TX
Sproule Associates Ltd.
AMEX:
Roland Savage, Specialist
Michael J. Sokoll, Director of Issuer Services