Edgar Filing: HARKEN ENERGY CORP

SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

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Check the appropriate box:

[X] Preliminary Proxy Statement

[_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
(AS PERMITTED BY RULE 14a-6(e)(2))

[_] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Under Rule 14a-12

HARKEN ENERGY CORPORATION
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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[HARKEN LOGO]

580 WestLake Park Boulevard, Suite 600
Houston, Texas 77079

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held ___________, 2003

Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Harken Energy Corporation, a Delaware corporation ("Harken"), will
be held at on _________, 2003 at 10:00 a.m. local time for the following
purposes:

(1) To approve an increase in the number of authorized shares of Harken
Common Stock from 225 million shares to ____ million shares;

(2) To elect three Class A Directors of Harken to hold office in
accordance with Harken's Certificate of Incorporation until the 2006
Annual Meeting of Stockholders and until their respective successors
are duly elected and qualified;

and such other matters as may properly come before the Annual Meeting or any
adjournments thereof.

The Board of Directors recommends that you vote in favor of each of the
proposals described in this Proxy Statement.

The Board of Directors has fixed the close of business on _________, 2003
as the date of record for determining the stockholders entitled to notice of and
to vote, either in person or by proxy, at the Annual Meeting and any adjournment
or postponement thereof.

Harken's Annual Report to Stockholders, a Proxy Statement containing
information relating to the matters to be acted upon at the Annual Meeting and a
form of Proxy accompany this Notice.

You are cordially invited to attend the Annual Meeting. Whether or not you
plan to attend, you are urged to date, sign and promptly return your proxy so
that your shares may be voted in accordance with your wishes and in order that
the presence of a quorum may be assured. Your vote is important. The giving of a
proxy does not affect your right to revoke it later or vote your shares in
person if you should attend the Annual Meeting.

If you plan to attend the Annual Meeting, please note that this is a
stockholders' meeting and attendance will be limited to stockholders of Harken
or their qualified representative. Each stockholder may be asked to present
valid picture identification, such as a driver's license or passport.
Stockholders holding stock in brokerage accounts ("street name" holders) will
need to bring a copy of a brokerage statement reflecting stock ownership as of
the record date. Qualified representatives of a stockholder must have
identification as well as a properly executed proxy from the stockholder they
are representing. Cameras, recording devices and other electronic devices will
not be permitted at the Annual Meeting.

By Order of the Board of Directors

A. Wayne Hennecke, Secretary

Houston, Texas

_________, 2003

[HARKEN LOGO]

580 WestLake Park Boulevard, Suite 600
Houston, Texas 77079

ANNUAL MEETING OF STOCKHOLDERS
to be held ___________, 2003

SOLICITATION OF PROXIES

The accompanying proxy is solicited on behalf of the Board of Directors of
Harken Energy Corporation, a Delaware corporation ("Harken"), in connection with
the Annual Meeting of Stockholders (the "Annual Meeting"), which will be held at
____________________________________ on __________, 2003 at 10:00 a.m. local
time, and any adjournments or postponements thereof, for the purposes set forth
in the accompanying notice. This Proxy Statement and the accompanying form of
Proxy were first mailed to stockholders of record on or about _________, 2003.

RECORD DATE AND VOTING SECURITIES

The Board of Directors has fixed the close of business on _________, 2003
as the record date for determining the holders of common stock, $.01 par value
per share, of Harken ("Common Stock") entitled to notice of and to vote, either
in person or by proxy, at the Annual Meeting. The shares of Common Stock are the
only shares of capital stock entitled to vote at the Annual Meeting. On
_________, 2003, Harken had ___________ shares of Common Stock outstanding.

RECOMMENDATIONS OF THE BOARD

Unless a stockholder gives other instructions on the proxy card, the
persons named as proxy holders on the proxy card will vote in accordance with
the recommendation of the Board of Directors. The Board's recommendation is set
forth below in this Proxy Statement. In summary, the Board recommends a vote:

Proposal One: FOR an increase in the number of authorized shares of Harken
Common Stock from 225 million shares to ____ million shares;
and

Proposal Two: FOR the election of the three nominees named in this Proxy
Statement as the Class A Directors of Harken to hold office
in accordance with Harken's Certificate of Incorporation
until the 2006 Annual Meeting of Stockholders and until
their respective successors are duly elected and qualified.

Please note that unless Proposal One is approved by the stockholders,
Harken will likely not have a sufficient number of shares authorized to redeem
its convertible notes maturing this year.

QUORUM AND VOTING

Each share of Common Stock is entitled to one vote. The presence, in person
or represented by proxy, of the holders of a majority of the issued and
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum at the Annual Meeting. Abstentions and broker
non-votes (i.e., shares held by a broker for its customers that are not voted
because the broker does not receive instructions from the customer or because
the broker does not have discretionary voting power with respect to the proposal
under consideration) are counted for purposes of determining whether a quorum is
present.

The affirmative vote of a majority of the outstanding voting stock, in
person or represented by proxy, is required to approve the proposed increase in
the number of authorized shares of Common Stock (Proposal One). Abstentions and
broker non-votes will have the same effect as votes against this proposal.

The affirmative vote of a plurality of the votes cast at the meeting is
required for the election of directors (Proposal Two). A properly executed proxy
marked "Withhold All" with respect to the election of directors will not be
voted with respect to any of the directors, although it will be counted for the
purpose of determining whether there is a quorum. A properly executed proxy
marked "For All Except" with respect to the election of one or more directors
will not be voted with respect to the director or directors indicated, although
it will be counted for the purpose of determining whether there is a quorum.
Abstentions and broker non-votes will have no effect on the election of nominees
to the Board of Directors.

In the election of directors, each holder of Common Stock, upon giving
proper notice, will be entitled to cumulate his, her or its votes by voting the
total number of shares of Common Stock held by such stockholder at the close of
business on the record date multiplied by the number of directors to be elected,
as such stockholder may see fit. Any holder of Common Stock who intends to
cumulate his, her or its votes is required to give written notice of such
intention to the Secretary of Harken on or before the day preceding the election
at which such holder intends to cumulate his, her or its votes. Notice may be
given on the Proxy, if done so in a timely manner. All holders of Common Stock,
including holders of proxies, may cumulate their votes if any holder has given
such written notice. Discretionary authority to cumulate votes is being
solicited only in the event an individual stockholder first elects to cumulate
his, her or its votes.

If any other matters are properly presented at the Annual Meeting for
consideration, including, among other things, consideration of a motion to
adjourn the meeting to another time or place, the individuals named as proxies
and acting thereunder will have discretion to vote on those matters according to
their best judgment to the same extent as the person delivering the proxy would
be entitled to vote. If the Annual Meeting is postponed or adjourned, your proxy
will remain valid and may be voted at the postponed or adjourned meeting. You
still will be able to revoke your proxy until it is voted. At the date this
Proxy Statement went to press, we did not know of any matters other than those
described in this Proxy Statement to be presented at the Annual Meeting.

PROXY SOLICITATION

The expense of any solicitation of proxies will be borne by Harken.
Solicitation of proxies may be made in person or by mail, telephone or telegraph
by directors, executive officers and other employees of Harken. Harken will
request banking institutions, brokerage firms, custodians, nominees and
fiduciaries to forward solicitation material to the beneficial owners of Common
Stock held of record by such persons, and Harken will reimburse such entities
for their reasonable out-of-pocket expenses.

REVOCATION OF PROXY

Any stockholder returning the accompanying Proxy may revoke such Proxy at
any time prior to its exercise by: (a) giving written notice to the Secretary of
Harken of such revocation; (b) voting in person at the meeting; or (c) executing
and delivering to the Secretary of Harken a later dated Proxy.

OWNERSHIP OF COMMON STOCK

Security Ownership of Certain Beneficial Owners

As of __________, 2003, Harken had outstanding ______ shares of Common
Stock. As of that date, the only persons known by Harken to beneficially own
five percent (5%) or more of the outstanding shares of Common Stock (or
potentially own five percent (5%) or more of the outstanding shares of Common
Stock upon conversion of convertible securities of Harken) were:

Name Shares Percent Ownership
------------------------------------------ ----------------------- --------------------

FES First Equity Securities AG 17,498,888(1) 40.43%
Bleicherweg 66
CH-8002 Zurich
Switzerland

Verwaltungs-und Privat-Bank 5,666,666(1) 18.02%
FL-9490 Vaduz
Im Zentrum
Liechtenstein

Bank von Ernst (Liechtenstein) AG 2,250,000(1) 8.03%
Postfach 112
FL-9490 Vaduz
Liechtenstein

Nomura International Plc 2,222,222(1) 7.93%
Nomura House
1 St. Martin's - Le-Grand
London EC1A 4NP, U.K.

Robert Anderson 2,000,000 7.76%
2110 Horseshoe Lane
Longview, Texas 75605

Lyford Investments Enterprises Ltd. 1,714,286 6.65%
720 5th Avenue, 9th Floor
New York, New York 10019

Michael B. Rohlfs, Attorney in Fact for 1,562,556 6.06%
Traco International, N.V.
5N762 Burr Road
St. Charles, Illinois 60175

(1) Represents shares issuable upon conversion of 7% Senior Convertible Notes
due 2007 at $0.36 per share.

Security Ownership of Directors and Management

The following table sets forth information regarding the number of shares
of Common Stock beneficially owned by each director, each named executive
officer, and all of Harken's directors and executive officers as a group as of
February 20, 2003:

Number of Shares
Name Beneficially Owned Percent of Class
------------------------------------ ----------------------- ---------------------

Michael M. Ameen, Jr............... 26,850(1) (2)
Larry G. Akers...................... 4,750(3) (2)
Marvin M. Chronister................ 0 (2)
James W. Denny, III................. 36,750(4) (2)
Mikel D. Faulkner................... 526,375(5) 2.04%
James H. Frizell.................... 19,250(6) (2)
Bruce N. Huff....................... 207,500(7) (2)
Dr. J. William Petty................ 11,000(8) (2)
H. A. Smith......................... 31,680(9) (2)

Stephen C. Voss........................ 195,000(10) (2)
Anna M. Williams....................... 20,800(11) (2)

All Directors and Executive Officers
as a group (11 persons)................ 1,079,955(12) 4.19%

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(1) Includes 23,750 shares issuable within 60 days upon exercise of
options issued by Harken.
(2) Less than one percent (1%).
(3) Includes 3,750 shares issuable within 60 days upon exercise of options
issued by Harken.
(4) Includes 33,750 shares issuable within 60 days upon exercise of
options issued by Harken.
(5) Includes 426,375 shares issuable within 60 days upon exercise of
options issued by Harken.
(6) Includes 1,250 shares issuable within 60 days upon exercise of options
issued by Harken.
(7) Includes 205,000 shares issuable within 60 days upon exercise of
options issued by Harken.
(8) Includes 2,500 shares issuable within 60 days upon exercise of options
issued by Harken.
(9) Includes 23,750 shares issuable within 60 days upon exercise of
options issued by Harken.
(10) Includes 194,000 shares issuable within 60 days upon exercise of
options issued by Harken.
(11) Includes 20,800 shares issuable within 60 days upon exercise of
options issued by Harken.
(12) Includes 934,925 shares issuable within 60 days upon exercise of
options issued by Harken.

PROPOSAL ONE: INCREASE OF AUTHORIZED SHARES OF
COMMON STOCK FROM 225 MILLION TO ____ MILLION SHARES

The Board of Directors has adopted resolutions approving a proposal to
amend Harken's Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 225 million to ____ million shares. As of _________,
2003, ______ shares of Common Stock were issued and outstanding. An additional
____________ shares of Common Stock were reserved for future issuance, including
issuance in connection with Harken's current rights offering, outstanding stock
options, and upon conversion of Harken's 5% Senior Convertible Notes due May 26,
2003 ("5% European Notes"), 7% Senior Convertible Notes, 5% Convertible Notes
due November 26, 2003 ("Benz Notes"), Series G1 Preferred Stock and Series G2
Preferred Stock. Each share of newly authorized Common Stock will have the same
rights and privileges as each share of existing Common Stock. Adoption of the
proposed amendment and issuance of additional shares of Common Stock will not
affect the rights of the holders of Common Stock, except for effects incidental
to increasing the number of shares of Common Stock outstanding, such as dilution
of the earnings per share and voting rights of current holders of Common Stock.
The amendment will not affect the number of shares of preferred stock
authorized.

Reasons for Approving the Increase in Authorized Shares

While Harken will continue its efforts to repurchase and restructure the
outstanding 5% European Notes and the Benz Notes due in 2003 (collectively, the
"5% Notes"), Harken intends to redeem the remaining outstanding 5% Notes prior
to maturity and issue such number of shares of Common Stock as may be necessary
to accomplish such redemptions. The redemption of up to $20 million principal
amount of 5% European Notes and related issuance of shares was previously
approved by the stockholders in accordance with the rules of the American Stock
Exchange. As of _______, 2003, approximately $__ million principal amount of 5%
European Notes and $__ million principal amount of Benz Notes were outstanding.
Depending upon the dollar amount of notes to be redeemed, the redemption may
result in the issuance of a significant number of shares of Common Stock that,
when added to Harken's currently outstanding shares and shares reserved for
issuance, may exceed the number of shares presently authorized for issuance in
Harken's Certificate of Incorporation. If the redemption price of the Common
Stock was $0.20 per share (the market price on February 20, 2003) at the time
that the 5% European Notes and the Benz Notes were redeemed, and $25.6 million
and $5.7 million were outstanding, respectively, approximately 147 million
shares and 32.6 million shares, respectively, would be issued. Unless the price
of Common Stock were to significantly rise such that a lesser number of shares
is required to be issued in connection with the redemption or the amount of the
outstanding notes is reduced, Harken may not have a sufficient number of
authorized but unissued shares to effect the proposed redemption of the 5% Notes

unless the stockholders approve this proposal. If such stockholder approval is
not obtained, Harken would have to otherwise restructure the outstanding notes
prior to maturity or pay such notes at maturity. There can be no assurance that
Harken would be successful in restructuring its obligations under the
outstanding notes prior to maturity or would have available sufficient funds to
pay such notes in cash upon maturity. Harken currently does not have sufficient
funds to pay such notes in cash and it is unlikely that Harken will have such
funds prior to maturity.

In order to increase the number of authorized shares of Common Stock,
Harken will need to amend the first paragraph of Article Four of its Certificate
of Incorporation to increase the number of authorized shares of Common Stock.
Currently, Harken's Certificate of Incorporation provides for the issuance of up
to 225 million shares of Common Stock. The Board of Directors unanimously
adopted a resolution proposing and declaring advisable that Article Four of
Harken's Certificate of Incorporation be amended in order to increase the number
of authorized shares of Common Stock to ____ million shares and recommending to
the stockholders of Harken the adoption of the proposed amendment. The text of
this amended first paragraph of Article Four would thus read as follows:

"The aggregate number of shares which the Corporation shall have the
authority to issue is ____________________ (_____________), of which
__________ (____________) shall be designated as Common Stock of the par
value of One Cent ($.01) per share and ten million (10,000,000) shall be
designated as Preferred Stock of the par value of One Dollar ($1.00) per
share."

If this proposal is approved by the stockholders, it will become effective
upon filing of an amendment to the Certificate of Incorporation with the
Secretary of State of the State of Delaware.

As of _______, 2003, Harken had outstanding ______ shares of Common Stock.
If the proposed increase in authorized shares of Common Stock is approved and
the above transactions are effected, Harken will have outstanding approximately
_____ million shares of Common Stock with approximately ______ million
authorized but unissued shares of Common Stock remaining.

To the extent that shares of Common Stock are authorized but not issued in
connection with the above transactions, such shares will be available for
issuance by Harken in the future. Stockholder approval will not be required for
any such future issuance, except as may be required by applicable law or
regulatory authorities or by the rules of any stock exchange on which Harken's
securities may then be listed.

The Board of Directors believes that the availability of additional
authorized shares will allow Harken to effect the above listed transactions,
redeem, convert or restructure additional indebtedness, issue stock dividends or
distributions, take prompt advantage of market and other conditions in
connection with possible financings or acquisitions, and issue Common Stock for
other proper corporate purposes when such action is deemed advisable or
desirable by the Board of Directors. The Board of Directors also believes that
the availability of additional shares of Common Stock for these purposes without
delay or the necessity of a meeting of stockholders (except as may be required,
as noted above) will be beneficial to Harken by providing it with the
flexibility required to consider and respond to future business opportunities
and financial needs as they arise.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY ADOPTED A RESOLUTION SEEKING
STOCKHOLDER APPROVAL OF, AND RECOMMENDS A VOTE FOR, THE INCREASE IN AUTHORIZED
SHARES OF COMMON STOCK.

Vote Required

The proposal to increase the number of authorized shares of Common Stock
requires the affirmative vote of a majority of the outstanding voting stock.
Abstentions and broker non-votes will have the same effect as votes against this
proposal.

PROPOSAL TWO: ELECTION OF DIRECTORS

The number of directors constituting the full Board of Directors of Harken
has been established as nine (9) in accordance with Harken's Bylaws. The
Certificate of Incorporation provides that the Board of Directors be divided
into Classes A, B and C, with staggered terms of three (3) years each. There are
presently nine (9) members serving on the Board of Directors. Three Class A
Directors will be elected at the Annual Meeting to hold office until the 2006
Annual Meeting of Stockholders and until their respective successors are duly
elected and qualified.

Nominees for Election as Class A Directors:

Name, Age and Business Experience Director Since
---------------------------------------------------------------------------------- -----------------

Mikel D. Faulkner (Age - 53) - Chairman of the Board of Harken since February 1982
1991; CEO of Harken since 1982, and President of Harken from 1982 until February
1993. Effective May 31, 2001, Mr. Faulkner also became the Chairman of the Board
of Directors of Global.

Bruce N. Huff (Age - 52) - President and Chief Operating Officer of Harken since 1996
March 1998 and Chief Financial Officer from February 1999 to June 2000; Senior
Vice President and Chief Financial Officer of Harken from 1990 to March 1998.

Dr. J. William Petty (Age - 60) - Professor of Finance and the W.W. Caruth 2000
Chairholder of Entrepreneurship at Baylor University from 1990 to the present;
served as dean of the Business School at Abilene Christian University from 1979
to 1990; served as a subject matter expert on a best-practices study by the
American Productivity and Quality Center on the topic of shareholder value based
management; served on a research team for the Australian Department of Industry
to study the feasibility of establishing a public equity market for small and
medium-sized enterprises in Australia.

Each of the nominees for election as directors has agreed to serve if
elected. Harken knows of no reason why any of the nominees for election as
directors would be unable to serve. Should any of the nominees be unable to
serve, all proxies returned to Harken will be voted in accordance with the best
judgment of the persons named as proxies except where a contrary instruction is
given.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RE-ELECTION OF MESSRS.
FAULKNER, HUFF AND PETTY TO THE BOARD OF DIRECTORS.

Vote Required to be Elected as a Director

To be elected a director, each nominee must receive the affirmative vote of
a plurality of the votes duly cast at the Annual Meeting. Abstentions and broker
non-votes will have no effect on the election of nominees to the Board of
Directors.

Directors Continuing in Office:

Name, Age and Business Experience Director Since Term Expires
-------------------------------------------------------------------- --------------- -------------

Larry G. Akers (Age - 65) - From 1996 to the present, Mr. Akers has acted as an 2000 2004
independent energy advisor/consultant. From 1978 to 1988, he served as Chairman,
President and CEO of ESCO Energy, Inc. From 1969 to 1978, Mr. Akers served as
exploration and development manager for Laclede Gas.

Michael M. Ameen, Jr. (Age - 78) - From 1989 to 1999, Mr. Ameen served as a part 1994 2004
time consultant to Harken with regard to Middle Eastern exploration projects;
Independent Consultant on Middle East Affairs for the past twelve years;
Director of American Near East Refugee Aid (a charitable organization); Past
director of Amideast (a charitable organization); past director of Middle East
Institute; Past director of International College in Beirut, Lebanon; Past vice
president of government relations and director of Washington office of Aramco;
past president of Mobil Middle East Development Corporation; and Member, Energy
Intelligence Group International Advisory Board.

Marvin M. Chronister (Age - 51) - From August 1990 to May 2002, Mr. Chronister 2002 2005
served as a Director of Corporate Finance with Deloitte & Touche LLP. From
December 1988 to August 1990, he served as an investment banker with Kidder
Peabody, and from February 1987 to December 1988, he served with Merrill Lynch.

James H. Frizell (Age - 75) - From 1985 to 1987 and from 1989 to the present, 2001 2005
Mr. Frizell has acted as an independent petroleum consultant. From 1987 to 1989,
he served as a Vice President of Pike Petroleum Corporation. From 1983 to 1985,
he served as a Vice President of Valero Producing Company. From 1981 to 1983, he
served as Vice President-Exploration and Senior Vice President at
Freeport-McMoran.

H. A. Smith (Age - 65) - From June 1991 to the present, Mr. Smith has served as 1997 2004
a consultant to Smith International Inc., an oil field service company.
Beginning in 2002, Mr. Smith has served as a Director of Brigham Exploration
Company. Previously, Mr. Smith served as Vice President Customer Relations for
Smith International, Inc.

Stephen C. Voss (Age - 53) - Managing Director of Global since January 2002; 1997 2005
Vice Chairman of the Board of Harken from May 2000 to November 2001. From
September 1998 to May 15, 2000, Mr. Voss served as Executive Vice President and
Chief Operating Officer of Harken, and from 1990 to September 1998 as Senior
Vice President of Harken.

DIRECTORS' MEETINGS AND COMMITTEES

During 2002, the Board of Directors held eight (8) meetings, which included
four (4) regularly scheduled meetings and four (4) special meetings. The Board
of Directors also acted by unanimous written

consent nine (9) times. During 2002, each current member of the Board of
Directors attended or acted upon at least seventy-five percent (75%) of the
total number of meetings of the Board of Directors and Committees on which he
served.

The Board of Directors has standing Audit, Compensation and Nominating
Committees, which are described below. During 2002, the Board of Directors also
had a Corporate Governance Committee, which transferred its responsibilities to
the Audit Committee beginning January 2003.

Audit Committee. The Audit Committee is currently comprised of Messrs.
Petty, Smith, Ameen and Chronister. Mr. Chronister was added to the Audit
Committee in January 2003. The functions of the Audit Committee and its
activities, including review of the financial statements of Harken and receipt
of reports and other communications from Harken's independent auditors, are
described below under the heading Report of the Audit Committee. During 2002 the
Audit Committee held eight (8) meetings.

Compensation Committee. The Compensation Committee is currently comprised
of Messrs. Frizell, Akers, Petty and Chronister. Mr. Chronister was added to the
Compensation Committee in January 2003. The Compensation Committee is
responsible for making and setting compensation for the chief executive officer
of Harken and adopted the Report on Executive Compensation which appears on page
13. During 2002, the Compensation Committee held three (3) meetings.

Nominating Committee. The Nominating Committee is currently, and during
2002 was, comprised of Messrs. Smith and Ameen. The Nominating Committee
considers nominations for the Board of Directors, develops and reviews
background information for candidates, and makes recommendations to the Board of
Directors with respect to candidates for directors proposed by stockholders. Any
stockholder wishing to recommend a candidate for consideration by the Board can
do so in writing to the Secretary of Harken at its corporate offices in Houston,
Texas, giving the candidate's name, biographical data and qualifications. Any
such recommendation must be submitted before the deadline for receipt of
stockholder proposals and must be accompanied by a written statement from the
individual of his or her consent to be named as a candidate and, if nominated
and elected, to serve as a director. During 2002, the Nominating Committee held
two (2) meetings.

Corporate Governance Committee. The Corporate Governance Committee was
formed in March 2002 and was comprised of Messrs. Ameen and Petty. The Corporate
Governance Committee was formed to consider issues that arise from time to time
with respect to the directors' and officers' duties and responsibilities to
Harken and to make recommendations regarding such issues to the whole Board of
Directors. During 2002, the Corporate Governance Committee held three (3)
meetings. In January 2003, the Corporate Governance Committee transferred its
responsibilities to the Audit Committee.

COMPENSATION OF DIRECTORS

In 2002, each non-employee director of Harken received an annual retainer
of $20,000 plus $2,000 for attendance at each regular meeting. In addition,
directors serving on Committees received $4,000 for chairmanship and $1,000 per
Committee meeting attended. Except for the compensation described in the
preceding two sentences, non-employee directors did not receive any additional
fees for meetings attended.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On October 21, 1997, Harken loaned Stephen C. Voss, a director of Harken,
$80,000 at an interest rate of 7% per annum. This loan is a recourse loan
secured by options to purchase Common Stock granted to Mr. Voss. The outstanding
principal balance of such loan was $80,000, and such loan is payable on demand.

In May 2002, Harken entered into a severance agreement and agreed to
forgive the repayment of a short-term loan in the amount of $64,000 to Larry E.
Cummings, who was then an Executive Vice President and General Counsel of
Harken, related to his resignation as an officer of Harken due to health
reasons.

EXECUTIVE OFFICERS OF HARKEN

The officers of Harken are elected annually by the Board of Directors
following each Annual Meeting of Stockholders, or as soon thereafter as
practicable. Each officer holds office until the earlier of such time as his or
her successor is duly elected and qualified, or his or her death, resignation or
removal from office. Any officer elected or appointed by the Board of Directors
may be removed by the Board of Directors whenever, in its judgment, the best
interests of Harken will be served thereby, but such removal will be without
prejudice to the contract rights, if any, of the person so removed.

The executive officers of Harken, their ages and positions held with
Harken and their business experience for the past five years are listed below.

Name Age Position Held with Harken
--------------------------- ------ ------------------------------------------------------------------

Mikel D. Faulkner 53 Chairman of the Board of Directors and Chief Executive Officer
Bruce N. Huff 52 President, Chief Operating Officer
James W. Denny, III 55 Executive Vice President - Operations
Anna M. Williams 32 Executive Vice President - Finance and Chief Financial Officer
Richard O. Cottle 46 Senior Vice President - Production
A. Wayne Hennecke 44 Senior Vice President - Finance and Secretary

Mikel D. Faulkner has served as Chairman of the Board of Harken since
February 1991 and Chief Executive Officer of Harken since 1982. Mr. Faulkner
previously served as President of Harken between 1982 and 1993.

Bruce N. Huff has served as a director of Harken since August 1996. Mr.
Huff has served as President and Chief Operating Officer of Harken since March
1998. Mr. Huff had previously served as Senior Vice President and Chief
Financial Officer since 1990.

James W. Denny, III has served as Executive Vice President - Operations
since October 1999. From 1998 to October 1999, Mr. Denny served as Senior
Engineer/Operations Manager for XPLOR Energy, Inc. From 1995 to 1998, Mr. Denny
served as Vice President, Operations & Exploration for Polaris Exploration
Corporation.

Anna M. Williams has served as Executive Vice President - Finance and Chief
Financial Officer since June 2001. Ms. Williams has served as Senior Vice
President - Finance and Chief Financial Officer since June 2000 and as Vice
President - International Finance since from 1998 to 2000 and as International
Finance Manager from 1996 to 1998.

Richard O. Cottle has served as Senior Vice President - Operations since
January 2000. Since joining Harken in 1994, Mr. Cottle has served as Vice
President of Operations and as Operations Manager for Harken Southwest
Corporation, a wholly-owned subsidiary of Harken.

Wayne Hennecke has been employed with Harken since 1988. Mr. Hennecke has
served as Senior Vice President - Finance and Secretary of Harken since June
2002. Mr. Hennecke has served as Senior Vice President - Finance and Chief
Accounting Officer of Harken since June 2001 and as Treasurer since June 1995,
and had previously served as Vice President-Finance and Chief Financial Officer
of Harken from April 1998 to December 1998.

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth certain information regarding the
compensation paid during fiscal years 2002, 2001, and 2000 to Harken's Chief
Executive Officer and Harken's four most highly compensated executive officers
other than the Chief Executive Officer (the "named executive officers"). Please
see the Report on Executive Compensation below.

SUMMARY COMPENSATION

Annual Compensation Long Term Compensation
------------------------------------------------------------------------------------------------------------------
Securities
Underlying
Name and Principal Fiscal Other Annual All Other Options/SARs Other
Position Year Salary Bonus Compensation Compensation (#) Compensation
------------------------------------------------------------------------------------------------------------------

Mikel D. Faulkner 2002 $229,090(1) $ 5,314 $ 2,683(2) $ 4,830(3) -- --
Chairman and Chief 2001 $301,442(4) $ 2,414 $ 5,356(5) $ 2,983(6) -- --
Executive Officer 2000 $255,000 $25,000 $ 1,915(7) $10,858(8) 200,000 --
----------------------------------------------------------------------------------------------------------------
Bruce N. Huff 2002 $199,038(9) $ -- $13,351(10) $ 3,364(11) -- --
President and Chief 2001 $229,327(12) $31,013 $13,351(10) $ 2,983(6) -- --
Operating Officer 2000 $213,750(13) $17,700 $39,112(14) $10,858(8) 95,000 --
----------------------------------------------------------------------------------------------------------------
Stephen C. Voss 2002 $214,887(15) $ 2,546 $ -- $ 6,347(16) -- --
Managing Director, 2001 $223,269(17) $25,000 $22,800(18) $ 2,983(6) -- --
Global Energy 2000 $205,000 $10,347 $30,936(19) $10,858(8) 75,000 --
Development PLC
----------------------------------------------------------------------------------------------------------------
James W. Denny, III 2002 $160,000 $ -- $13,200(20) $ 3,567(21) -- --
Executive Vice 2001 $175,000 $ 521 $16,400(22) $ 2,970(23) -- --
President 2000 $151,442 $30,000 $ 3,000(7) $10,789(24) 60,000 --
----------------------------------------------------------------------------------------------------------------
Anna M. Williams 2002 $137,667(25) $ $22,800(26) $ 744(27) -- --
Executive Vice 2001 $144,750(28) $ $22,800(26) $ 1,918(29) -- --
President - Finance and 2000 $128,333 $25,000 $3,000(30) $10,575(31) -- --
Chief Financial Officer
----------------------------------------------------------------------------------------------------------------

-------------------------------

(1) Includes $9,866 for unused vacation time.
(2) Includes $283 relating to use of company car and $2,400 club allowance.
(3) Includes $4,500 of 401(k) matching and $331 in group term life premiums.
(4) Includes $16,442 for unused vacation time.
(5) Includes $556 relating to use of company car and $4,800 club allowance.
(6) Includes $2,625 of 401(k) matching and $358 in group term life premiums.
(7) Relating to use of company car.
(8) Includes $10,500 of 401(k) matching and $358 in group term life premiums.
(9) Includes $7,788 for unused vacation time.
(10) Includes $8,551 relating to use of company car and $4,800 club allowance.
(11) Includes $3,000 of 401(k) matching and $364 in group term life premiums.
(12) Includes $4,327 for unused vacation time.
(13) Includes $3,750 for unused vacation time.
(14) Includes $13,745 relating to use of a company car and debt forgiveness in
the amount of $25,367.
(15) Includes $39,137 for unused vacation time.
(16) Includes $6,000 relating to 401(k) matching and $347 in group term life
premiums.
(17) Includes $8,269 for unused vacation time.

(18) Includes $18,000 relating to use of company car and $4,800 club allowance.
(19) Includes $15,716 relating to use of company car and debt forgiveness in the
amount of $15,220.
(20) Includes $8,400 relating to use of company car and $4,800 club allowance.
(21) Includes $3,000 of 401(k) matching and $567 in group term life premiums.
(22) Includes $11,600 relating to use of company car and $4,800 club allowance.
(23) Includes $2,625 of 401(k) matching and $345 in group term life premiums.
(24) Includes $10,500 of 401(k) matching and $289 in group term life premiums.
(25) Includes $5,167 for unused vacation time.
(26) Includes $18,000 relating to use of company car and $4,800 club allowance.
(27) Includes $665 of 401(k) matching and $79 in group term life premiums.
(28) Includes $4,750 for unused vacation time.
(29) Includes $1,831 of 401(k) matching and $86 in group term life premiums.
(30) Relates to use of company car.
(31) Includes $10,500 of 401(k) matching and $75 in group term life premiums.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

There were no grants of options nor stock appreciation rights made to any
of Harken's executive officers during 2002.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES

Number of
Shares/SARs Number of Securities Underlying Value of Unexercised
Acquired on Value Unexercised Option/SARs at In-the-Money Options/SARs at
Exercise Realized Fiscal Year End Fiscal Year End (1)
============================================================================================================================
Name Exercisable Unexercisable Exercisable Unexercisable

Mikel D. Faulkner -- -- 426,375 118,250 $ -- $ --
----------------------------------------------------------------------------------------------------------------------------
Bruce N. Huff -- -- 205,000 59,000 $ -- $ --
----------------------------------------------------------------------------------------------------------------------------
Stephen C. Voss -- -- 194,000 49,000 $ -- $ --
----------------------------------------------------------------------------------------------------------------------------
James W. Denny, III -- -- 33,750 31,250 $ -- $ --
----------------------------------------------------------------------------------------------------------------------------
Anna M. Williams -- -- 20,800 14,500 $ -- $ --

CHANGE-IN-CONTROL ARRANGEMENTS

On April 1, 2002 (but effective as of December 30, 1999), Harken and Mikel
D. Faulkner entered into that certain Amended and Restated Agreement Regarding
Compensation in the Event of Change in Control (the "Change in Control
Agreement"), which was negotiated and approved by the Compensation Committee.
The Change in Control Agreement provides that in the event of a "Change in
Control" of Harken, Harken shall pay to Mr. Faulkner within thirty days' of such
event, in addition to any other payments owing to Mr. Faulkner, a cash payment
equal to thirty (30) times Mr. Faulkner's regular monthly salary which was last
paid prior to the month in which such Change in Control event occurred.

A "Change in Control" is defined as including: the sale of all or
substantially all of the assets of Harken; a transaction which results in more
than fifty percent (50%) of the voting stock of Harken being owned by a person
or party other than who owned or held such shares prior to such transaction; a
"person" or "group" (within the meaning of Sections 13(d) or 14(d)(2) of the
Securities Exchange Act of 1934), being or becoming the beneficial owner of more
than fifty percent (50%) of the voting stock of Harken outstanding; the
liquidation or dissolution of Harken; any other event or series of events that
results in a change or right to change a majority of the members of Harken's
Board of Directors; and any event which causes the triggering of or a Change in
Control to occur under Harken's Stockholder Rights Plan. Under Harken's
Stockholder Rights Plan, a triggering event occurs whenever any person (other
than an employee stock option plan) becomes the beneficial owner of 15% or more
of the shares of Common Stock then outstanding.

Mr. Faulkner has waived the application of the "Change in Control"
provisions of the Change in Control Agreement in connection with past capital
restructuring transactions and the rights offering of Harken. Mr. Faulkner has
also waived the application of such provisions in connection with the redemption
of up to $20 million principal amount of the 5% European Notes as well as the
issuance of such number of shares of Common Stock as may be necessary to
accomplish such redemptions.

On June 17, 2002, Harken entered into a Severance Agreement with Bruce N.
Huff, which was negotiated and approved by the Compensation Committee. This
Severance Agreement provides that in the event Mr. Huff is involuntarily
terminated by Harken during the term of the Severance Agreement, Harken will pay
Mr. Huff, in addition to any other payments owing to Mr. Huff, an amount equal
to nine months' salary (which salary shall be deemed to be the greater of Mr.
Huff's salary at the time of termination or his salary as of June 17, 2002). The
term of the Severance Agreement expires on June 17, 2003.

On June 17, 2002, Harken entered into a Severance Agreement with James
W. Denny III, which was negotiated and approved by the Compensation Committee.
This Severance Agreement provides that in the event Mr. Denny is involuntarily
terminated by Harken during the term of the Severance Agreement, Harken will pay
Mr. Denny, in addition to any other payments owing to Mr. Denny, an amount equal
to nine months' salary (which salary shall be deemed to be the greater of Mr.
Denny's salary at the time of termination or his salary as of June 17, 2002).
The term of the Severance Agreement expires on June 17, 2003.

On June 17, 2002, Harken entered into a Severance Agreement with Anna
M. Williams, which was negotiated and approved by the Compensation Committee.
This Severance Agreement provides that in the event Ms. Williams is
involuntarily terminated by Harken during the term of the Severance Agreement,
Harken will pay Ms. Williams, in addition to any other payments owing to Ms.
Williams, an amount equal to nine months' salary (which salary shall be deemed
to be the greater of Ms. Williams' salary at the time of termination or her
salary as of June 17, 2002). The term of the Severance Agreement expires on June
17, 2003.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2002, the Compensation Committee participated in all deliberations
concerning executive compensation. No executive officer of Harken served as a
member of the Compensation Committee. As described above under "Certain
Relationships and Related Transactions," on October 21, 1997, Harken loaned
Stephen C. Voss, a director of Harken, $80,000 at an interest rate of 7% per
annum.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Harken's directors and executive officers, and any
persons who own more than ten percent of a registered class of Harken's equity
securities, to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of common stock and other
equity securities of Harken. Directors, executive officers and greater than ten
percent stockholders are required by Securities and Exchange Commission
regulations to furnish Harken with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms and written
representations from certain reporting persons, Harken believes that all filing
requirements applicable to its directors and executive officers have been
complied with during 2002.

REPORT OF THE AUDIT COMMITTEE

The following Report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Harken filing under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent Harken specifically incorporates this Report
by reference therein.

____________, 2003

To the Board of Directors of Harken Energy Corporation:

The Audit Committee of the Board of Directors, which is composed of four
independent non-employee directors, reviews and discusses Harken's audited
financial statements with Harken's auditors and management. Each such member of
the Audit Committee is independent within the meaning of the rules of the
American Stock Exchange. During 2003, the Audit Committee adopted a charter,
which was approved by the full Board on February 28, 2003. The complete text of
this updated charter is attached as an exhibit to this Proxy Statement.

The Audit Committee has implemented procedures to ensure that during the
course of each fiscal year it devotes the attention that it deems necessary or
appropriate to each of the matters assigned to it under its charter. The Audit
Committee has reviewed and discussed with management Harken's audited financial
statements as of and for the year ended December 31, 2002. It has discussed with
the independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61, Communication with Audit Committees, as amended, by
the Auditing Standards Board of the American Institute of Certified Public
Accountants.

We have received and reviewed the written disclosures and the letter from
the independent auditors required by Independence Standard No. 1, Independence
Discussions with Audit Committees, as amended, by the Independence Standards
Board, and have discussed with the auditors the auditors' independence.

Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in Harken's Annual Report on Form 10-K for the year ended December 31, 2002.

By: Dr. J. William Petty
H.A. Smith Michael
M. Ameen, Jr.
Marvin M. Chronister

BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors develops and oversees
Harken's compensation strategy for all employees, including executive officers.
For executive officers, the Compensation Committee evaluates performance to
determine compensation policies, reviews specific levels of compensation and
considers the recommendations of the chief executive officer. The compensation
strategy is implemented through policies designed to support the achievement of
Harken's business objectives and the enhancement of stockholder value. The
Compensation Committee reviews the annual compensation package on an ongoing
basis throughout the year. Harken's compensation policies and programs are
designed to align the annual compensation with the annual and long-term
performance of Harken and to maintain a significant portion of that total
compensation at risk, tied primarily to the creation of stockholder value. On
___________, the Compensation Committee adopted this Report on Executive
Compensation.

The Compensation Committee annually reviews and sets the base salary of the
Chief Executive Officer (the "CEO"). In establishing annual compensation for the
CEO, the Compensation Committee takes

into consideration many factors in making a determination of aggregate
compensation. In adopting this Report, the Compensation Committee took into
account for 2002 the following factors: (i) the financial results of Harken
during the prior year; (ii) the performance of the Common Stock in the public
market; (iii) compensation of chief executive officers employed by companies
comparable to Harken; (iv) the achievements of management in completing
significant projects during the year; (v) Harken's performance during the past
year as compared to its peer companies in the oil and gas industry; (vi) the
impact that the dramatic fluctuations in the prices of crude oil and natural gas
have had on Harken during this past year; and (vii) management's dedication and
commitment in support of Harken. The Compensation Committee exercised its
judgment based upon the above criteria and did not apply a specific formula or
assign a weight to each factor considered.

In setting the CEO's compensation for 2002, the Compensation Committee took
note of the fact that Harken achieved significant success in 2002 toward
implementing its overall business strategy and accomplishing goals that had been
set by the Board. Harken completed certain key objectives which enhanced
Harken's domestic and international oil and gas reserve base and resulted in the
redemption, repurchase or restructure of certain of Harken's convertible notes.
No cash bonus, other than certain minor compensation allowance items, was
granted to the CEO during 2002. The CEO's level of base salary at December 31,
2002 was decreased by $89,000 during 2002 compared to his level of base salary
at December 31, 2001.

Harken's long-term incentive compensation consists of Harken's Stock Option
Plans. The Compensation Committee views the granting of stock options and
restricted stock awards as a significant method of aligning management's
long-term interests with those of the stockholders. The Compensation Committee
encourages executives, individually and collectively, to maintain a long-term
ownership position in Harken's Common Stock. The Compensation Committee did not
grant to the CEO any additional stock options during 2002.

Federal Income Tax Considerations

In 1993, the Internal Revenue Code was amended to place a $1.0 million cap
on the deductibility on compensation paid to individual executives of publicly
held corporations. The Board took this into account, however, upon review of the
available regulations and interpretations, decided that it would not make the
deductibility of Harken's compensation for federal income tax purposes a
criterion to be used in establishing compensation of the named executives during
the present review cycle. The Board took into consideration the belief that the
current compensation levels of the CEO would not be subject to the cap. The
Board continues to recognize that compensation should meet standards of
reasonableness and necessity, which have been part of the Internal Revenue Code
for many years.

By: James H. Frizell
Larry G. Akers
Dr. J. William Petty

PERFORMANCE OF THE COMMON STOCK

The following performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference the proxy
statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that Harken specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such Acts.

The graph below compares the cumulative total stockholder return on the
Common Stock for the last five fiscal years with the cumulative total return on
the S&P 500 Index and the Dow Jones Secondary Oils Stock Index over the same
period (assuming the investment of $100 in the Common Stock, the S&P 500 Index
and the Dow Jones Secondary Oils Stock Index on December 31, 1997 and
reinvestment of all dividends).

[CHART]

Comparison of Cumulative Total Return
Assumes Initial Investment of $100 December 1997

1998 1999 2000 2001 2002
---- ---- ---- ---- ----

Harken Energy Corp. $ 28.57 $ 11.61 $ 4.82 $ 1.76 $ 0.31
S&P 500 Index 128.58 155.64 141.46 124.65 97.10
Dow Jones Secondary Oils Stock Index 67.90 84.96 109.05 105.94 109.94

INDEPENDENT PUBLIC ACCOUNTANTS

On August 28, 2001, Harken dismissed Arthur Andersen LLP ("Arthur
Andersen") as Harken's independent accountants. Harken engaged Ernst & Young LLP
("Ernst & Young") as its new independent accountants. The decision to change
Harken's independent accountants was made by Harken's Audit Committee of the
Board of Directors. A representative of Ernst and Young LLP will be invited to
attend the Annual Meeting and to make a statement if such representative desires
to do so, and, if in attendance, will be available to respond to appropriate
questions. The Board of Directors and the Audit Committee have not yet selected
Harken's auditors for the year ending December 31, 2003.

Arthur Andersen's reports on Harken's consolidated financial statements for
the years ended December 31, 2000 and 1999 did not contain an adverse opinion or
disclaimer of opinion, nor were such reports qualified or modified as to
uncertainty, audit scope, or accounting principles.

During the year ended December 31, 2000 and the subsequent interim period
preceding the decision to change independent accountants, there were no
disagreements with Arthur Andersen on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreement(s), if not resolved to the satisfaction of Arthur Andersen, would
have caused the former accountant to make a reference to the subject matter of
the disagreement(s) in connection with its reports covering such periods.

During the year ended December 31, 2000 and the subsequent interim period
preceding the decision to change independent accountants, there were no
"reportable events" (hereinafter defined) requiring disclosure pursuant to Item
304(a)(1)(v) of Regulation S-K. As used herein, the term "reportable events"
means any of the items listed in paragraphs (a)(1)(v)(A)-(D) of Item 304 of
Regulation S-K.

Effective September 5, 2001, Harken engaged Ernst & Young as its
independent accountants. During the two years ended December 31, 2000 and the
subsequent interim period preceding the decision

to change independent accountants, neither Harken nor anyone on its behalf
consulted Ernst & Young regarding either the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on Harken's consolidated financial
statements, nor has Ernst & Young provided to Harken a written report or oral
advice regarding such principles or audit opinion.

Harken requested and obtained a letter from Arthur Andersen addressed to
the Securities and Exchange Commission stating that it agrees with the above
statements.

Audit Fees

The aggregate fees billed by Ernst & Young LLP for professional services
rendered for the audit of Harken's annual financial statements for the fiscal
year ended December 31, 2002 and for the reviews of the financial statements
included in Harken's quarterly reports on Form 10-Q for that fiscal year were
$460,818.

Financial Information Systems Design and Implementation Fees

There were no fees billed by Ernst & Young LLP for professional services
relating to financial information systems design and implementation for the
fiscal year ended December 31, 2001.

All Other Fees

The aggregate fees billed by Ernst & Young LLP for services rendered to the
Company, other than the services described above under "Audit Fees," for the
fiscal year ended December 31, 2002 were $461,613, including (i) $74,658 for
statutory audit work as well as registration statement post-audit review work,
(ii) $65,783 for tax planning and the preparation of tax returns of Harken and
its subsidiaries and (iii) $321,172 in connection with the listing of the common
stock of Global Energy Development PLC, a subsidiary of Harken ("Global"), on
the AIM Exchange in London and other services relating to Global.

On ________, 2003, the Audit Committee reviewed the non-audit services
provided to Harken by Ernst & Young LLP and concluded that such services are
compatible with the maintenance of that firm's independence in the conduct of
its auditing functions for Harken.

ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS

Stockholder Proposals

Harken's bylaws provide that stockholder proposals and director nominations
by stockholders may be made in compliance with certain advance notice,
informational and other applicable requirements. With respect to stockholder
proposals (concerning matters other than the nomination of directors), the
individual submitting the proposal must file a written notice with the Secretary
of Harken at 580 WestLake Park Boulevard, Suite 600, Houston, Texas 77079
setting forth certain information, including the following:

. a brief description of the business desired to be bought before the
meeting and the reasons for conducting that business at the meeting;

. the name and address of the proposing stockholder;

. the number of shares of common stock beneficially owned by the
proposing stockholder; and

. any material interest of the proposing stockholder in such business.

The notice must be delivered to the Secretary (a) at least 60, but no more than
90, days before any scheduled meeting or (b) if less than 70 days notice or
prior public disclosure of the meeting is given, by

the close of business on the 10th day following the giving of notice or the date
public disclosure was made, whichever is earlier.

Board Nominations

A stockholder may recommend a nominee to become a director of Harken by
giving the Secretary of Harken (at the address set forth above) a written notice
setting forth the following information concerning each person the stockholder
proposes to nominate:

. the name, age, business address and residence of the person;

. the principal occupation or employment of the person;

. the number of shares of common stock beneficially owned by the person;
and

. any other information relating to the person that is required to be
disclosed in solicitations for proxies for election of directors
pursuant to the rules of the SEC.

The stockholder's notice must also contain the following information concerning
the proposing stockholder:

. the name and record address of the proposing stockholder; and

. the number of shares of common stock beneficially owned by the
proposing stockholder.

Such nominations must be made pursuant to the same advance notice
requirements for stockholder proposals set forth above.

General Information

Harken's annual meetings are held each year at a time and place designated
by Harken's board of directors in the notice of the meeting. Copies of Harken's
bylaws are available upon written request made to the Secretary of Harken at the
above address. The requirements described above do not supersede the
requirements or conditions established by the SEC for stockholder proposals to
be included in Harken's proxy materials for a meeting of stockholders. The
chairman of the meeting may refuse to bring before a meeting any business not
brought in compliance with applicable law and Harken's bylaws.

STOCKHOLDER PROPOSALS FOR 2004 ANNUAL MEETING

Under the SEC's proxy rules, stockholder proposals that meet certain
conditions may be included in Harken's proxy statement and form of proxy for a
particular annual meeting. Stockholders that intend to present a proposal at
Harken's 2004 Annual Meeting of Stockholders must send the proposal to Harken so
that it is received at Harken's principal executive offices no later than
________, 2004 to be considered for inclusion in the proxy statement and form of
proxy related to the 2004 Annual Meeting of Stockholders. Stockholders that have
an intention to present a proposal that will not be included in the proxy
statement and the form of proxy must give notice to Harken no later than
________, 2004 of the specific intention to do so. Any and all such proposals
and notices should be sent to the attention of the Secretary of Harken. Any and
all such proposals must comply with applicable Securities and Exchange
Commission regulations in order to be included in Harken's proxy materials or to
be presented at the Annual Meeting.

FINANCIAL AND OTHER INFORMATION

The financial statements of Harken have been included as part of the Annual
Report of Harken enclosed with this Proxy Statement. The financial statements
and notes thereto, as well as Management's Discussion and Analysis of Financial
Condition and Results of Operations, Quantitative and Qualitative

Disclosures About Market Risk, and Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure, from the Form 10-K for the year ended
December 31, 2002 are incorporated by reference. In addition, a representative
of Ernst & Young LLP will be invited to attend the Annual Meeting and to make a
statement if such representative desires to do so, and, if in attendance, will
be available to respond to appropriate questions from stockholders.

Harken will provide to each person solicited, without charge except for
exhibits, upon request in writing, additional copies of the financial
statements, as well as financial statements for prior years and Harken's Annual
Report on Form 10-K. Requests should be directed to the Secretary of Harken
Energy Corporation, 580 WestLake Park Blvd., Suite 600, Houston, Texas 77079,
(281) 504-4000. Financial statements are also on file with the Securities and
Exchange Commission, Washington, D.C. 20549.

By Order of the Board of Directors

_______________________________________________
A. Wayne Hennecke, Secretary

Houston, Texas
_____________, 2003

[Harken Graphic] VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and
HARKEN ENERGY CORPORATION for electronic delivery of information up until 11:59 P.M.
580 WESTLAKE PARK BLVD. Eastern Time the day before the cut-off date or meeting
SUITE 600 date. Have your proxy card in hand when you access the web
HOUSTON, TX 77079 site. You will be prompted to enter your 12-digit Control
Number which is located below to obtain your records and to
create an electronic voting instruction form.

VOTE BY PHONE - 1-800-___-____
Use any touch-tone telephone to transmit your voting
instructions up until 11:59 P.M. Eastern Time the day before
the cut-off date or meeting date. Have your proxy card in
hand when you call. You will be prompted to enter your
12-digit Control Number which is located below and then
follow the simple instructions the Vote Voice provides you.

VOTE BY MAIL
Mark, sign, and date your proxy card and return it in the
postage-paid envelope we have provided or return it to
Harken Energy Corporation,
[__________________________________________]

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS
------------------------------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
------------------------------------------------------------------------------------------------------------------------------------

HARKEN ENERGY CORPORATION

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS ONE AND TWO

Vote on Proposals
For Against Abstain
PROPOSAL ONE: Approve an increase in the number of authorized shares of Harken [_] [_] [_]
Common Stock from 225 million shares to ____ million shares.

PROPOSAL TWO: Election of three Class A For Withhold For All To withhold authority to vote, mark "For All Except"
Directors of Harken, to hold in accordance All All Except and write the nominee's number on the line below.
with Harken's of Incorporation until the [ ] [ ] [ ]
2006 Annual Meeting of Stockholders.
____________________________________________________
Nominees: 01) Mikel D. Faulkner
02) Bruce N. Huff
03) Dr. J. William Petty

The undersigned stockholder(s) authorizes the proxies to transact such business as may properly come before the Annual Meeting
or any thereof.

NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON, JOINT OWNERS SHOULD EACH SIGN. SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE FULL TITLE AS SUCH.

(VOTING INSTRUCTION: TO CUMULATE THE VOTES
FOR ONE OR MORE OF THE NOMINEE(S) WRITE THE
NAME(S) OF THE NOMINEE(S) AND THE MANNER IN
WHICH SUCH VOTES SHALL BE CUMULATED IN THE
SPACE PROVIDED ON THE REVERSE SIDE.)

Check this box if you have given written [ ]
voting instructions on the reverse side.

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Signature [PLEASE SIGN WITHIN BOX] Date Signature(Joint Owners) Date

HARKEN ENERGY CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS

FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ____________, 2003

The undersigned hereby (1) acknowledges receipt of the Notice of Annual
Meeting of Stockholders of Harken Energy Corporation ("Harken") to be held
___________, 2003, and (2) constitutes and appoints A. Wayne Hennecke and Anna
M. Williams, and each of them, attorneys and proxies of the undersigned, with
full power of substitution to each, for and in the name, place, and stead of the
undersigned, to vote, and to act in accordance with the instructions set forth
on the reverse side, with respect to all of the shares of Common Stock of Harken
standing in the name of the undersigned, or with respect to which the
undersigned is entitled to vote and act at that meeting and at any meetings to
which that meeting is adjourned. In their discretion, the proxies may vote upon
such other matters as may properly come before the meeting.

You are encouraged to specify your choices by marking the appropriate
boxes, but you need not mark any boxes if you wish to vote in accordance with
the Board of Directors' recommendations. This Proxy will be voted as specified.
If no specification is made, this Proxy will be voted FOR the proposals. Your
shares cannot be voted unless you sign and return this card.

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Voting Instructions:
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(If you noted any Voting Instructions above, please check the
corresponding box on the reverse.)