Edgar Filing: HARKEN ENERGY CORP

HARKEN
Energy Corporation

580 WestLake Park Boulevard, Suite 600
Houston, Texas 77079

NOTICE OF 2003 ANNUAL MEETING OF STOCKHOLDERS
to be held February 17, 2004

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 the offices of our counsel, McGuireWoods LLP, 65
East 55th Street 31st Floor, New York, New York 10022 on February 17, 2004
beginning at 2:00 p.m. local time for the following purposes:

(1) to approve an amendment to Harken's Certificate of Incorporation to
eliminate the classification of directors;

(2) to approve an amendment to Harken's Certificate of Incorporation to
eliminate the requirement that the holders of two-thirds of the
outstanding shares vote for the removal of any or all directors;

(3) to approve an amendment to Harken's Certificate of Incorporation to
eliminate cumulative voting;

(4) to elect five directors to serve until the next annual meeting of
stockholders, or until their successors are duly elected and
qualified;

(5) solely in the event that the stockholders do not approve the
amendment of Harken's Certificate of Incorporation to eliminate the
classification of directors, to elect two Class A Directors to hold
office until the 2006 Annual Meeting of Stockholders and until their
respective successors are duly elected and qualified;

(6) to approve an amendment to Harken's Certificate of Incorporation to
increase the number of shares of Harken's Common Stock, par value
$0.01, authorized for issuance; and

(7) to transact such other business as may properly come before the
Annual Meeting or any adjournments or postponements 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 January 20, 2004
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 representatives. 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

Elmer A. Johnston
Secretary

Houston, Texas
January __, 2004

HARKEN
ENERGY CORPORATION

580 WestLake Park Boulevard, Suite 600
Houston, Texas 77079

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 17, 2004

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
the offices of our counsel, McGuireWoods LLP, 65 East 55th Street, New York, New
York 10022 on February 17, 2004 at 2:00 p.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 January [__], 2004.

RECORD DATE AND VOTING SECURITIES

The Board of Directors has fixed the close of business on January 20, 2004
as the record date for determining the holders of common stock, $.0l 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 January
20, 2004, 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 amendment of Harken's Certificate of
Incorporation to eliminate the classification of
directors

Proposal Two: FOR an amendment of Harken's Certificate of
Incorporation to eliminate the requirement that the
holders of two-thirds of the outstanding shares vote for
the removal of any or all directors.

Proposal Three: FOR an amendment of Harken's Certificate of
Incorporation to eliminate cumulative voting.

Proposal Four: FOR the election of the five nominees named in this
Proxy Statement as the Board of Directors of Harken to
hold office until the next annual

meeting of stockholders, or until their successors are
duly elected and qualified.

Proposal Five: Solely in the event that the stockholders do not approve
Proposal Four above, FOR the election of the two
nominees named in this Proxy Statement as the Class A
Directors to hold office until the 2006 Annual Meeting
of Stockholders and until their respective successors
are duly elected and qualified.

Proposal Six: FOR an amendment of Harken's Certificate of
Incorporation that would increase the number of
authorized shares from two hundred twenty-five million
(225,000,000) to two hundred seventy-five million
(275,000,000) shares.

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 plurality of the votes cast at the meeting is
required for the election of directors (Proposal Four and, if necessary,
Proposal Five). In the case of Proposals Four and Five, 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. As to either proposal, 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.

If Proposal Three is approved, it will not become effective until after
the Annual Meeting. Therefore, in the election of directors at the Annual
Meeting, 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 by 5:00 PM (CST) on February 13, 2004. Notice may be given on the proxy,
if done so in a timely manner. Any holder of Common Stock, including any holder
of proxies, may cumulate his, her or its votes if such 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 Proposal Three is approved, beginning at the 2004 Annual Meeting
of Stockholders, stockholders will not have cumulative voting rights.

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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. 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.
Harken's directors, executive officers and other employees may solicit proxies
in person or by mail, telephone or electronic means. Harken will request banking
institutions, brokerage firms, custodians, nominees and fiduciaries to forward
solicitation materials 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. 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.

OWNERSHIP OF COMMON STOCK

Security Ownership of Certain Beneficial Owners

As of December 1, 2003, Harken had 182,965,462 shares of Common Stock
outstanding. 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:

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

Lyford Investments Enterprises Ltd.
720 5th Avenue, 9th Floor
New York, New York 10019 68,144,495 37.24%

FES First Equity Securities AG
Bleicherweg 66
CH-8002 Zurich
Switzerland 17,898,889(1) 9.78%

Waverley Investments Limited
P.O. Box 175 Frances House
Sir William Place
St. Peter Port
Guernsey
Channel Islands GY14HQ 6,820,000(1) 3.72%

Verwaltungs-und Privat-Bank
FL-9490 Vaduz
Im Zentrum
Liechtenstein 5,666,666(1) 3.07%

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----------
(1) Represents shares issuable upon conversion of Harken's 7% Senior
Convertible Notes due 2007.

Security Ownership of Directors and Management

The following table sets forth information, as of December 1, 2003,
regarding the number of shares of Common Stock beneficially owned by directors
and executive officers that are named in the summary compensation table below,
and all of Harken's named directors and executive officers as a group.

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

Michael M. Ameen, Jr 10,127 *
Marvin M. Chronister 5,000(1) *
Richard O. Cottle 0 *
James W. Denny, III 9,801 *
Mikel D. Faulkner 326,670 *
Dr. J. William Petty 27,767 *
Alan G. Quasha 0(2) *
H.A. Smith 25,905 *
Stephen C. Voss 1,000 *
Anna M. Williams 0 *
All directors and executive officers as a group (9 persons) 406,270(3) *

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* Less than 1%
(1) Includes 5,000 shares issuable within 60 days upon exercise of options.
(2) Does not include 68,123,184 shares held by Lyford Investments Enterprises
Ltd. Mr. Quasha represents Lyford Investments Enterprises Ltd. on the
Board of Directors of Harken.
(3) Includes 406,270 shares issuable within 60 days upon exercise of options.

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DIRECTORS' MEETINGS AND COMMITTEES

During 2002, the Board of Directors held eight meetings, which included
four regularly scheduled meetings and four special meetings. The Board of
Directors also acted by unanimous written consent nine times. During 2002, each
member of the Board of Directors attended at least seventy-five percent (75%)
of the total number of meetings of the Board of Directors and Committees on
which he served.

During 2003, the Board of Directors held three regularly scheduled
meetings. The Board of Directors also acted by unanimous written consent
nineteen times. During 2003, each current member of the Board of Directors
attended at least seventy-five percent (75%) of the total number of meetings of
the Board of Directors and Committees on which he served, with the exception of
Mr. Ameen.

The Board of Directors has standing Audit, Compensation and Nominating
Committees, which are described below.

Audit Committee. The Audit Committee is currently comprised of Messrs.
Ameen, Petty and Smith. 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 each of 2002 and 2003,
the Audit Committee held eight meetings.

Compensation Committee. The Compensation Committee is currently comprised
of Messrs. Ameen, Petty and Smith. 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 12. During
2002, the Compensation Committee held three meetings. During 2003, the
Compensation Committee held one meeting.

Nominating Committee. The Nominating Committee is comprised of Messrs.
Ameen, Petty and Smith. Each of the members of the Nominating Committee is
"independent", as independence is defined in Section 121 of the Rules of the
American Stock Exchange. The Nominating Committee has not adopted a written
charter. During 2002, the Nominating Committee held two meetings. During 2003,
the Nominating Committee did not meet, but acted by unanimous written consent
once.

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. The Nominating Committee identifies nominees
for director through recommendations from directors, officers and stockholders.
When evaluating nominees for director, the Nominating Committee considers
several factors including, the nominee's ability to devote adequate time to the
duties and

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responsibilities of the Board of Directors and the nominee's education and
professional experience.

COMPENSATION OF DIRECTORS

In 2002 and 2003, 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 former 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 as of December 1, 2003,
and such loan is payable on demand.

In May 2002, Harken entered into a severance agreement with, 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:

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

Alan G. Quasha 54 Chairman of the Board of Directors
Mikel D. Faulkner 54 Chief Executive Officer and President
James W. Denny, III 56 Vice President and Chief Operating Officer
Anna M. Williams 33 Vice President and Chief Financial Officer
Richard O. Cottle 46 Vice President
Elmer A. Johnston 43 Vice President - General Counsel and Secretary

Alan G. Quasha has served as Chairman of the Board of Harken since March
31, 2003. Mr. Quasha previously served as Chairman of the Board of Harken from
June 1983 to February

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1991. He has served as President of Quadrant Management, Inc., an investment
management company, since 1988. Mr. Quasha also has served as a director of
Compagnie Financiere Richemont SA, a Swiss luxury goods company, since its
formation in 1988 and American Express Funds, the mutual fund arm of American
Express Company, since May 2002. From April 1994 to April 1997, he served as a
governor of the American Stock Exchange.

Mikel D. Faulkner has served as a director and Chief Executive Officer of
Harken since 1982. Mr. Faulkner has previously served as Chairman of the Board
of Harken from February 1991 until March 31, 2003 and President of Harken from
1982 until 1993. From April 2002 to the present, Mr. Faulkner has served as
Chairman of Harken's subsidiary, Global Energy Development plc ("Global").

James W. Denny, III has served as Vice President and Chief Operating
Officer of Harken since March 31, 2003. From October 1999 to March 2003, Mr.
Denny served as Executive Vice President--Operations of Harken. From 1998 to
October 1999, Mr. Denny served as Senior Engineer/Operations Manager for XPLOR
Energy, Inc., a private oil and gas exploration company that merged with and
became a subsidiary of Harken in 1999.

Anna M. Williams has served as Vice President and Chief Financial Officer
of Harken since March 31, 2003. From June 2001 to April 2003, Ms. Williams
served as Executive Vice President--Finance and Chief Financial Officer. Ms.
Williams served as Senior Vice President - Finance and Chief Financial Officer
from June 2000 to June 2001, as Vice President - International Finance from 1998
to 2000 and as International Finance Manager from 1996 to 1998.

Richard O. Cottle has served Vice President of Harken since March 31,
2003. Mr. Cottle served as Senior Vice President--Engineering from January 2000
to March 2003. Since joining Harken in 1994, Mr. Cottle has served as Vice
President of Operations/Engineering from August 1997 to January 2000 and as
Operations Manager for Harken Southwest Corporation, a wholly-owned subsidiary
of Harken from December 1994 through July 1997.

Elmer A. Johnston has served as Vice President--General Counsel and
Secretary of Harken since March 31, 2003 and as Senior Counsel to Global since
March 2002. From 1998 to 2002, Mr. Johnston served as Assistant General Counsel
of Harken.

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.

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SUMMARY COMPENSATION

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

Mikel D. Faulkner 2002 $229,090(1) $ 9,150 $ 2,683(2) --(33) $ 4,830(3)
Chief Executive 2001 $301,442(4) $ 2,414 $ 5,356(5) -- $ 2,983(6)
Officer 2000 $255,000 $25,000 $ 1,915(7) 200,000 $10,858(8)

Bruce N. Huff (9) 2002 $199,038(10) $ 5,625 $13,351(11) -- $ 3,364(12)
President and Chief 2001 $229,327(13) $31,013 $13,351(11) -- $ 2,983(6)
Operating Officer 2000 $213,750(14) $17,700 $39,112(15) 95,000 $10,858(8)

Stephen C. Voss 2002 $214,887(16) $ 2,546 $ -- --(34) $ 6,347(17)
Managing Director, 2001 $223,269(18) $25,000 $22,800(19) -- $ 2,983(6)
Global Energy Development PLC 2000 $205,000 $10,347 $30,936(20) 75,000 $10,858(8)

James W. Denny, III 2002 $160,000 $ 2,429 $13,200(21) -- $ 3,567(22)
Executive Vice 2001 $175,000 $ 521 $16,400(23) -- $ 2,970(24)
President 2000 $151,442 $30,000 $ 3,000(7) 60,000 $10,789(25)

Anna M. Williams 2002 $137,667(26) $ -- $22,800(27) -- $ 744(28)
Executive Vice 2001 $144,750(29) $ -- $22,800(27) -- $ 1,918(30)
President--Finance and Chief Financial
Officer 2000 $128,333 $25,000 $ 3,000(31) -- $10,575(32)

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(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) Mr. Huff ceased to be President and Chief Operating Officer on April 4,
2003.
(10) Includes $7,788 for unused vacation time.
(11) Includes $8,551 relating to use of company car and $4,800 club allowance.
(12) Includes $3,000 of 401(k) matching and $364 in group term life premiums.
(13) Includes $4,327 for unused vacation time.
(14) Includes $3,750 for unused vacation time.
(15) Includes $13,745 relating to use of a company car and debt forgiveness in
the amount of $25,367.
(16) Includes $39,137 for unused vacation time.
(17) Includes $6,000 relating to 401(k) matching and $347 in group term life
premiums.
(18) Includes $8,269 for unused vacation time.
(19) Includes $18,000 relating to use of company car and $4,800 club allowance.
(20) Includes $15,716 relating to use of company car and debt forgiveness in
the amount of $15,220.

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(21) Includes $8,400 relating to use of company car and $4,800 club allowance.
(22) Includes $3,000 of 401(k) matching and $567 in group term life premiums.
(23) Includes $11,600 relating to use of company car and $4,800 club allowance.
(24) Includes $2,625 of 401(k) matching and $345 in group term life premiums.
(25) Includes $10,500 of 401(k) matching and $289 in group term life premiums.
(26) Includes $5,167 for unused vacation time.
(27) Includes $18,000 relating to use of company car and $4,800 club allowance.
(28) Includes $665 of 401(k) matching and $79 in group term life premiums.
(29) Includes $4,750 for unused vacation time.
(30) Includes $1,831 of 401(k) matching and $86 in group term life premiums.
(31) Relates to use of company car.
(32) Includes $10,500 of 401(k) matching and $75 in group term life premiums.
(33) Excludes 1,400,000 options to purchase ordinary shares at 50 pence
(British Sterling) granted by Global. Approximately 466,667 of these
options vested on January 31, 2003 and an additional 466,667 will vest
each January 31 of 2004 and 2005.
(34) Excludes 840,000 options to purchase Global ordinary shares at 50 pence
(British Sterling) granted by Global. Approximately 280,000 of these
options vested on January 31, 2003 and an additional 280,000 will vest
each January 31 of 2004 and 2005.

----------

OPTION/SAR GRANTS IN LAST FISCAL YEAR

There were no grants of options or 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

The following table sets forth information concerning option exercises in
the fiscal year ended December 31, 2002 by the named executive officers and the
value of such officer's unexercised options at December 31, 2002:

Number of Number of Securities
Shares/SARs Underlying Unexercised Value of Exercised In-the-Money
Acquired on Value Option/SARs Options/SARs at Fiscal
Exercise Realized at Fiscal Year End 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 $ -- $ --

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(1) The closing price for the Common Stock as reported on the American Stock
Exchange as of December 31, 2002 was $0.22. Value was calculated on the
basis of the difference between the option exercise price and such closing
price multiplied by the number of shares of Harken Common Stock underlying
the option.

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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 Harken's 5% European Notes as well as the issuance of such number of shares
of Common Stock as may be necessary to accomplish such redemption.

On June 17, 2002, Harken entered into a Severance Agreement with Bruce N.
Huff, which was negotiated and approved by the Compensation Committee. The
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). In
connection with Mr. Huff's termination of employment in April 2003, Mr. Huff was
paid severance pursuant to his Severance Agreement.

On June 17, 2002, Harken entered into a Severance Agreement with James W.
Denny III, which was negotiated and approved by the Compensation Committee. The
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 involuntary termination or his salary as of June
17, 2002). In April 2003, Harken agreed to extend the term of this Severance
Agreement through June 17, 2004.

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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 involuntary termination or her salary as of
June 17, 2002). In April 2003, Harken agreed to extend the term of this
Severance Agreement through June 17, 2004 and to provide for a payment to Ms.
Williams of an amount approximately equal to six months of her annual salary
upon her voluntary termination of employment.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2002, Dr. J. William Petty and Messrs. Larry G. Akers and James
Frizell were members of Harken's Compensation Committee and participated in all
deliberations concerning executive compensation. During 2003, Dr. J. William
Petty and Messrs. Ameen and Smith were members of Harken's Compensation
Committee and participated in all deliberations concerning executive
compensation. No executive officer of Harken served as a member of the
Compensation Committee during either 2002 or 2003. 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. The outstanding principal balance of such loan is $80,000, and such
loan is payable on demand.

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 and 2003.

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.

April 11, 2003

- 11 -

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 2002, 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
April 11, 2003, the Compensation Committee adopted this Report on Executive
Compensation.

- 12 -

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 2003 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 2002; 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 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 ,
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: Marvin M. Chronister
Dr. J. William Petty

- 13 -

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).

Comparison of Cumulative Total Return
Assumes Initial Investment of $100 on December 31, 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
--------------------------------------------------------------------------------------------------------

PROPOSAL ONE

TO ELIMINATE CLASSIFICATION OF
THE BOARD OF DIRECTORS

In July 1981, Harken's Certificate of Incorporation was amended to
classify Harken's Board of Directors. Harken's Board of Directors believes that
classification of the Board may permit the directors to be less responsive to
the desires of stockholders than directors of corporations that do not have
classified boards of directors and accordingly, may permit management to become
entrenched. Therefore, the Board proposes that the provision in Harken's
Certificate of Incorporation that classifies the Board be eliminated.

Harken's Board of Directors believes that directors should be elected
annually. It further has determined that the classification of the Board may
make an investment in Harken's shares less attractive than shares of a
comparable company that does not have a classified board because it is possible
that directors elected for a three-year term may be less responsive to the
desires of stockholders than directors elected for a one-year term. The
classified director provision could have the effect, combined with Harken's
restrictions on the right to remove directors, of making removal of incumbent
directors more time-consuming and difficult, which could discourage a third
party from making a tender offer or otherwise attempting to obtain control of
the Company, even though such an attempt might be beneficial to the Company and
its stockholders. At least two annual meetings, instead of one, would generally
be required to effect a change in the majority of Harken's Board of Directors.
If the Board of Directors were not classified, at each annual meeting of
stockholders the stockholders would be able to consider and vote on each of

- 14 -

the nominees for the full Board of Directors, rather than one-third of the Board
as is currently the case. As a result, the Board of Directors may, as a whole,
better reflect the views of the stockholders. Elimination of a classified board
gives the stockholders the ability to vote based upon the actions of the Board
taken since the most recent stockholders' meeting.

Harken's current Certificate of Incorporation classifies the directors
according to the term for which they hold office by dividing the number of
directors into three classes. The three classes have been known as Class A,
Class B and Class C. Directors of each class, when elected, hold office for a
term of three years, together with each other director of the same class. During
the term for which they serve, any director or the entire Board of Directors may
be removed at any time for cause. The affirmative vote of the holders of
two-thirds of the outstanding shares that are entitled to vote in the election
of directors is required to remove a director from office.

As noted above under "Quorum and Voting," Harken's Certificate of
Incorporation currently provides for cumulative voting. Proposal Three below in
this Proxy Statement proposes to eliminate cumulative voting effective with the
election of directors at the next election of directors that is next held after
the Annual Meeting. In the election of directors at the Annual Meeting, Harken
stockholders have the right, if they give written notice of their intention to
cumulate votes on or before the day preceding the election, to case a number of
votes allocated among one, more than one or all directors that equals the number
of directors to be elected multiplied by the number of shares held and being
voted by the stockholder. If the Board of Directors no longer is classified,
then each stockholder may cumulate his, her or its votes among all nominees as
long as Harken continues to have cumulative voting. As a result, for as long as
cumulative voting may be in place, a holder of a significant number of shares
may be able to effect the election of a number of nominees that is proportionate
to the percentage of the Company's outstanding shares held by such stockholders.

In the case of Lyford Investments Enterprises Ltd., a British Virgin
Islands company ("Lyford"), which holds 68,144,495, or 37.24%, of Harken's
outstanding shares as of December 1, 2003, until cumulative voting is
eliminated, Lyford may cast a total of 340,722,475 cumulative votes in an
election of five directors. If it chooses to allocate those votes to two
nominees, unless other stockholders cumulate a greater number of votes in
opposition, Lyford will be able to effect the election of two of the nominees.
Prior to the elimination of classification, Lyford would have the choice of
cumulating its votes and then casting them in favor of one nominee or two. Its
ability to effect the election of three directors could require as few as two
and as many as three successive elections. Without classification, Lyford could
have the ability to effect the election of three or more nominees at each annual
meeting.

In order to eliminate classification of the Board of Directors, Harken
will need to amend Article Fourteen of its Certificate of Incorporation by
deleting the provisions of Article Fourteen that classify the Board of Directors
into three classes according to the date for which they severally hold office.
On November 11, 2003, the Board of Directors adopted a resolution proposing and
declaring advisable that Article Fourteen of Harken's Certificate of
Incorporation be amended to eliminate those provisions that classify the Board
of Directors according to the date for which they severally hold office.

- 15 -

If the stockholders vote to approve this Proposal One, it will become
effective upon the filing of an amendment to the Certificate of Incorporation
with the Secretary of State of the State of Delaware. Harken intends to file the
approved amendment immediately after the approval vote is obtained. The
stockholders will then vote on Proposal Four below, and a vote on Proposal Five
will not be taken if Proposal Four is approved.

If the stockholders approve this Proposal One, the Board of Directors will
amend its by-laws to eliminate those provisions that pertain to the
classification of the board. As a result, directors will be elected annually and
provisions of Delaware corporate law will govern the election of directors,
without any additional requirement or exceptions in Harken's corporate
documents.

Harken is not aware of any attempt of any person or group of persons that
intend to elect a majority of the directors.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY ADOPTED A RESOLUTION SEEKING
STOCKHOLDER APPROVAL OF, AND RECOMMENDS A VOTE FOR, THE ELIMINATION OF
CLASSIFICATION OF THE BOARD OF DIRECTORS.

Vote Required

The proposal to eliminate classification of the Board of Director 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.
Lyford has advised Harken that it intends to vote all of its shares for the
proposal to eliminate classification of the Board of Directors.

PROPOSAL TWO

TO ELIMINATE THE REQUIREMENT OF A TWO-THIRDS
VOTE FOR REMOVAL OF DIRECTORS

The same July 1981 amendment to the Company's Certificate of Incorporation
that classified the Board of Directors also limited the rights of Harken's
stockholders to remove its directors. Under Delaware corporate law, unless a
company's certificate of incorporation otherwise provides, stockholders that
hold a majority of shares entitled to vote may vote to remove a director for
cause or without cause. In the case of a company such as Harken, where
stockholders have cumulative voting rights for the election of directors, if
less than the entire board is to be removed, no director may be removed without
cause if the number of votes cast against removal would be sufficient to elect
such director if then cumulatively voted at an election of the entire board.
Also, in the case of a company such as Harken, whose directors are classified,
stockholders may remove a director only for cause. Since 1981, Harken's
Certificate of Incorporation has provided that stockholders of Harken may remove
a director only for cause and that the affirmative vote of the holders of
two-thirds of the voting stock of Harken will be required to remove a director
from office.

- 16 -

The Board of Directors of Harken has determined that Harken's Certificate
of Incorporation limits the rights of the stockholders to remove directors and
therefore has placed before the stockholders a proposal to eliminate both the
two-thirds vote and the requirement that removal be solely for cause. If the
stockholders approve the proposal, the stockholders will thereafter be able to
remove any Harken director in accordance with Delaware law with or without
cause. If the stockholders also approve Proposal Two to eliminate cumulative
voting, then the vote required to remove one or more directors will be a
majority vote.

In order to eliminate those provisions that limit the ability of the
stockholders to remove directors, Harken will need to amend Article Fourteen of
its Certificate of Incorporation by deleting the provisions of Article Fourteen
that provides that directors may be removed only for cause and further requires
the affirmative vote of the holders of two-thirds of the voting power of all of
Harken's stock entitled to vote in the election of directors to remove a
director from office.

If the stockholders approve this Proposal Two, the Board of Directors will
amend its by-laws to eliminate those provisions that pertain to removal of
directors. As a result, provisions of Delaware corporate law will govern the
removal of directors, without any additional requirement or exceptions in
Harken's corporate documents.

Harken is not aware of any attempt of any person or group of persons that
intend to seek the removal of any directors.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY ADOPTED A RESOLUTION SEEKING
STOCKHOLDER APPROVAL OF, AND RECOMMENDS A VOTE FOR, THE ELIMINATION OF THE
REQUIREMENT OF TWO-THIRDS VOTE FOR REMOVAL OF DIRECTORS.

Vote Required

The proposal to eliminate the requirement of two-thirds vote to remove a
director 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. Lyford has advised Harken that it intends to vote all of
its shares for the proposal to eliminate the requirement of two-thirds vote for
removal of directors.

PROPOSAL THREE

TO ELIMINATE CUMULATIVE VOTING FOR DIRECTORS

Under applicable Delaware corporate law, a company's certificate of
incorporation may provide for cumulative voting with respect to the election of
the directors. Harken's current certificate of incorporation provides for
cumulative voting. Cumulative voting permits the holder of each share of stock
entitled to vote in the election of directors to cast that number of votes which
equal the number of directors to be elected multiplied by the number of shares
held by such stockholder. The holder may allocate all votes represented by a
share to a single candidate or may allocate those votes among as many candidates
as he or she chooses. The

- 17 -

effect of cumulative voting is that a stockholder or group of stockholders with
a significant minority percentage of the outstanding shares may be able to elect
one or more directors if voting is cumulative. Without cumulative voting, each
director is elected by a plurality vote and a large minority stockholder may not
elect a director that is not supported by the plurality.

The Board of Directors believes that each director should be elected only
if such director receives a plurality of the votes cast and that each director
should represent the interest of all stockholders rather than the interest of a
minority stockholder or special constituency. The Board of Directors believes
that the system of electing directors whereby those directors are elected who
receive a plurality of votes cast by stockholders as a whole will best insure
that the Board of Directors will act for the benefit of all stockholders.
Accordingly, the Board of Directors believes that it is in the best interests of
the Company and all of its stockholders to eliminate cumulative voting.

Although the Board of Directors does not consider the elimination of
cumulative voting as an anti-takeover measure, the absence of cumulative voting
could have the effect of preventing stockholders holding a minority of Harken's
voting capital stock from obtaining representation on the Board. The elimination
of cumulative voting might also, under certain circumstances, render more
difficult or discourage a merger, tender offer or proxy contest, the assumption
of control by a holder of a large block of Harken's stock or the removal of
incumbent management. Harken, however, is not aware of any attempt by a group of
stockholders of Harken to elect a director by using cumulative voting to achieve
minority representation on the Board of Directors.

In order to eliminate those provisions that provide for cumulative voting,
Harken will need to amend Article Fourteen of its Certificate of Incorporation
by deleting the provisions of Article Fourteen that provide for cumulative
voting of shares.

If the stockholders vote to approve this Proposal Three, the elimination
of cumulative voting will become effective upon filing of a Certificate of
Amendment with the Secretary of State of Delaware amending Harken's Certificate
of Incorporation, which will occur as soon as practicable after the Annual
Meeting. If Proposals One, Two and Three are approved, the resulting amendments
to the Certificate of Incorporation will eliminate Article Fourteen of Harken's
Certificate of Incorporation in its entirety. Stockholders who vote in the
election of directors at the Annual Meeting will have the right to cumulate
their votes at the Annual Meeting.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY ADOPTED A RESOLUTION SEEKING
STOCKHOLDER APPROVAL OF, AND RECOMMENDS A VOTE FOR, THE ELIMINATION OF
CUMULATIVE VOTING.

Vote Required

The proposal to eliminate cumulative voting 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. Lyford has advised
Harken that it intends to vote all of its shares for the proposal to eliminate
classification of the Board of Directors.

- 18 -

PROPOSAL FOUR

TO ELECT DIRECTORS

Harken's Board of Directors is composed of five directors. If the
stockholders approve Proposal One, directors will be elected annually to serve
until the next annual meeting of stockholders, or until their successors are
elected and have been qualified.

Vote Required for Election of Directors

To be elected as 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. Lyford has advised Harken that it intends to vote all of its
shares for the five nominees named below.

Nominees for Directors

Information about the nominees for election as directors appears below:

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

Michael M. Ameen, Jr. (Age 79), Independent Consultant on Middle 1994
East Affairs since 1991. From 1989 to 1999, Mr. Ameen served as a
part time consultant to Harken with regard to Middle Eastern
exploration projects. Mr. Ameen has previously served as Director
of American Near East Refugee Aid; past director of Amideast;
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.

Mikel D. Faulkner (Age 54), Chief Executive Officer of Harken 1982
since 1982. From 1991 to March 2003, Mr. Faulkner served as
Chairman of the Board of Harken and, from 1982 to February 1993,
Mr. Faulkner served as President of Harken. Effective May 31,
2001, Mr. Faulkner also became Chairman of the Board of Directors
of Harken's subsidiary, Global.

Dr. J. William Petty (Age 61), Professor of Finance and the W.W. 2000
Caruth Chairholder of Entrepreneurship at Baylor University since
1990. From December 1979 to 1990, Dr. Petty served as dean of the
Business School at Abilene Christian University. Dr. Petty has
also 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 and has 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.

- 19 -

Alan G. Quasha (Age 54), President of Quadrant Management, Inc., 2003
an investment management company, since 1988. Mr. Quasha has
served as Chairman of the Board of Harken since March 31, 2003
and previously served as Chairman of the Board of Harken from
June 1983 to February 1991. Mr. Quasha has served as a director
of Compagnie Financiere Richemont SA, a Swiss luxury goods
company, since its formation in 1988, and American Express Funds,
the mutual fund arm of American Express Company, since May 2002.
From April 1994 to April 1997 served as a governor of the
American Stock Exchange.

H.A. Smith (Age 65), Consultant to Smith International Inc., an 1997
oil field service company, since June 1991. Previously, Mr. Smith
served as vice president-customer relations for Smith
International, Inc. Mr. Smith has served as a director of Brigham
Exploration Company, an independent oil and gas exploration and
production company, since 2002.

Each of the nominees named above was recommended by the Nominating
Committee for election to the Board by the stockholders. Although all nominees
named above have indicated their willingness to serve if elected, if at the time
of the Annual Meeting any nominee is unable or unwilling to serve, shares
represented by properly executed proxies will be voted at the discretion of the
persons named in those proxies for such other person as the Board may designate.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES NAMED ABOVE TO THE BOARD OF DIRECTORS.

PROPOSAL FIVE

IN THE ALTERNATIVE, TO ELECT CLASS A DIRECTORS

Stockholders will be asked to vote on this Proposal Five solely in the
event that at the Annual Meeting the stockholders do not approve the amendment
to Harken's Certificate of Incorporation which is the subject of Proposal One to
eliminate the classification of the Board of Directors. If the stockholders
approve Proposal One, then, prior to a vote being taken on Proposal Four, Harken
will amend its Certificate of Incorporation to eliminate the classification of
the Board of Directors, and the stockholders will proceed to vote on Proposal
Four and not this Proposal Five. If, however, the stockholders do not approve
Proposal Four or if Proposal Four is approved and Harken does not amend its
Certificate of Incorporation at the time, a vote will be taken on this Proposal
Five.

The number of directors constituting the full Board of Directors of Harken
has been established as five in accordance with Harken's bylaws. Harken's
Certificate of Incorporation provides that the Board of Directors be divided
into Classes A, B and C, with staggered terms of three years each. There are
currently five members serving on the Board of Directors. Two 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.

- 20 -

Vote Required for Election of Class A Directors

Nominees for Election as Class A Directors:

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

Each of the nominees named above was recommended by the Nominating
Committee for election to the Board by the stockholders. Each of the nominees
for election as director 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 MR. FAULKNER,
AND DR. PETTY TO THE BOARD OF DIRECTORS.

PROPOSAL SIX

TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
TO TWO HUNDRED SEVENTY-FIVE MILLION SHARES

The Board of Directors has adopted resolutions, subject to stockholder
approval, to amend Harken's Certificate of Incorporation to increase the number
of authorized shares of Common Stock from 225,000,000 to 275,000,000 shares. As
of December 1, 2003, 182,965,462

- 21 -

shares of Common Stock were issued and outstanding. An additional 46,823,924
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 7% Senior Convertible Notes due March 31, 2007, 5%
Convertible Notes due November 26, 2003 (the "Benz Notes") and Series G1, Series
G2 and G3 Preferred Stock. As a result, Harken has 17,289,093 shares of Common
Stock available for issuance. As explained below, the Board of Directors
believes that Harken requires additional authorized shares in excess of
17,289,093 to provide it with flexibility to use the value in the stock to
Harken's advantage. 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 for issuance.

Reasons for Approving the Increase in Authorized Shares

Harken's Board of Directors is seeking stockholder approval to increase
the number of authorized shares of Common Stock to 275,000,000 because it has
determined that having available for issuance 17,289,093 shares of Common Stock
does not give it sufficient flexibility to use the value in the stock to
Harken's advantage. The Board of Directors believes that availability of
additional authorized shares will allow Harken to take prompt advantage of
market and other conditions in a timely manner in connection with possible
financings or acquisitions, to discharge corporate obligations with stock rather
than cash and to 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 by applicable law or regulatory
authority or by the rules of any stock exchange on which Harken's securities may
then be listed) 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. Harken has no present intention to issue any
of the 50,000,000 additional shares of Common Stock and has not entered into any
agreements, arrangements or plans that would obligate it to issue any of the
50,000,000 additional shares.

There may be circumstances in which Harken will be required to obtain the
approval of its stockholders before Harken can issue any authorized shares. For
example, under the current rules of the American Stock Exchange, the exchange on
which Harken's shares currently are traded, newly issued shares cannot be listed
for trading on the Exchange without the consent of the stockholders, if, for
example, the shares to be issued will be 20% or more of the outstanding shares
and the price at which the shares would be issued will be less than Harken's per
share book value or market value, whichever is greater. Similarly, stockholder
approval would be required for shares to be issued as sole or partial
consideration for the stock or assets of another company if the shares to be
issued in the acquisition would be 5% or more of Harken's outstanding shares and
if any director, officer or substantial stockholder of Harken had a 5% or
greater interest (or if all directors, officers and substantial stockholders of
Harken have a 10% or greater interest) in the company or assets to be acquired
and, in any case, if the shares to be issued in the acquisition would be 20% or
more of Harken's outstanding shares.

- 22 -

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 225,000,000 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 275,000,000 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 two hundred eighty-five million (285,000,000), of
which two hundred seventy-five million (275,000,000) 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 the filing of an amendment to the Certificate of Incorporation with the
Secretary of State of the state of Delaware.

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 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. Lyford is the beneficial owner of 68,144,495 shares of Common Stock,
representing 37.24% of the Common Stock. Lyford has advised Harken that it
intends to vote all of its shares for the proposal to increase the number of
authorized shares of Common Stock.

INDEPENDENT PUBLIC ACCOUNTANTS

Ernst & Young LLP ("Ernst & Young") served as Harken's independent
accountants for the year ended December 31, 2002.

- 23 -

Audit Fees

The aggregate fees billed by Ernst & Young 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 for professional services
relating to financial information systems design and implementation for the
fiscal year ended December 31, 2002.

All Other Fees

The aggregate fees billed by Ernst & Young for services rendered to
Harken, 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 on the AIM Exchange in London, for audit and tax advisory
services in the United Kingdom relating to Global, and for Columbian tax advice
with regard to Harken's subsidiary, Harken de Columbia, Ltd.

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

On June 19, 2003, the Audit Committee voted to dismiss Ernst & Young LLP
as the Company's independent accountants, effective immediately, and to engage
the services of BDO Seidman LLP ("BDO Seidman") to serve as the Company's
independent public accountants for the 2003 fiscal year. Ernst & Young's reports
on the Company's consolidated financial statements for each of the years ended
December 31, 2002 and 2001 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 fiscal years ended December 31, 2002
and 2001 and through June 19, 2003, there were no disagreements with Ernst &
Young on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which, if not resolved to the
satisfaction of Ernst & Young, would have caused Ernst & Young to make reference
to the subject matter of the disagreement(s) in connection with its reports
covering such periods. During the fiscal years ended December 31, 2002 and 2001
and through June 19, 2003, there were no "reportable events" (as defined in
paragraphs (a) (1) (v) (A) - (D) of Item 304 of Regulation S-K of the Securities
Act of 1933, as amended ) requiring disclosure pursuant to Item 304 (a) (1) (v)
of Regulation S-K.

Effective June 24, 2003, the Company engaged BDO Seidman as its
independent accountants. During the two years ended December 31, 2001 and
December 31, 2002 and through June 24, 2003, neither the Company nor anyone on
its behalf consulted BDO Seidman 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 the Company's

- 24 -

consolidated financial statements, nor has BDO Seidman provided to the Company a
written report or oral advice regarding such principles or audit opinion. The
Company requested, and Ernst & Young furnished the Company with, a letter
addressed to the Securities and Exchange Commission stating whether or not it
agrees with the above statements. A copy of the letter from Ernst & Young dated
June 25, 2003 was filed as Exhibit 16.1 to the Company's Current Report on Form
8-K filed with the SEC on June 25, 2003 and is incorporated in this proxy
statement by this reference.

Representatives of Ernst & Young are not expected to be present at the
Annual Meeting, will not make a statement and are not expected to be available
to respond to questions. Representatives of BDO Seidman are expected to be
present at the Annual Meeting, will have an opportunity to make a statement if
they desire to do so and are expected to be available to respond to appropriate
questions.

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:

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

o the name and address of the proposing stockholder;

o the number of shares of Common Stock beneficially owned by the
proposing stockholder; and

o 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:

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

- 25 -

o the principal occupation or employment of the person;

o the number of shares of Common Stock beneficially owned by the
person; and

o 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:

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

o 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,
including deadlines for receipt, for stockholder proposals set forth above. In
addition, any such recommendation 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.

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.

- 26 -

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 and supplementary data, as well 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.

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

Elmer A. Johnston
Secretary

Houston, Texas
January __, 2004

- 27 -

EXHIBIT A

HARKEN ENERGY CORPORATION

Audit Committee of the Board of Directors

CHARTER

Adopted February 28, 2003

The Board of Directors ("Board") of Harken Energy Corporation (the "Company")
has unanimously adopted by resolution on the date stated above the following
charter ("Charter") pursuant to which the Audit Committee of the Board (the
"Committee") will be governed, operate and carry forth its duties:

1. Responsibilities.

a) The Committee shall be responsible for overseeing the Company's
accounting and financial reporting each year to applicable
regulatory authorities and endeavoring to ensure that Harken meets
its filing and reporting obligations in relation therewith.

b) The Committee, in its capacity as a committee of the Board, will be
directly responsible for appointing, compensating, retaining and
overseeing the work of the independent auditors ("Auditors")
(including resolution of disagreements between management and the
Auditors regarding financial reporting) for the Company for the
purpose of preparing or issuing an audit report or related work or
performing other audit, review or attestation services for the
Company. The Auditors will report directly to the Committee.

c) The Committee will report to the Board at regular Board meetings
concerning the status of the Company's financial statements and any
comments made by the Auditors. The Committee may also report to the
Board at such other times as it deems appropriate. The Committee
shall further be responsible for bringing any matters of concern or
question of which it may obtain knowledge to the attention of the
Board.

d) The Committee is responsible for ensuring that the Auditors submit a
formal written statement regarding any relationships and services
that may affect the Auditors' objectivity and independence relating
to the Company. In the event any such issues arise, the Committee
should discuss any relevant matters with the Auditors and determine
if any action is necessary to address the independence of the
Auditors.

e) The Committee shall sign and file a report annually with the Board
to be included in the Company's Proxy Statement to comply with the
Proxy

A - 1

Statement disclosure requirements as set forth by the Securities and
Exchange Commission as of this date or as may hereafter be amended.

f) The Committee shall review this Charter at least annually for
adequacy and compliance with all appropriate laws, rules and
regulations and shall recommend changes to the Board whenever
changes are appropriate or necessary.

g) The Committee shall review, approve, and consider the effect upon
the Auditors' independence of, the Auditors' provision to the
Company of all non-audit services allowed to be performed by the
Auditors under applicable law, and the Committee shall review and
approve all non-audit fees associated therewith.

h) The Committee is responsible for ensuring that the Auditors timely
report to the Committee (i) all critical accounting policies and
practices used or to be used, (ii) all alternative treatments of
financial information within generally accepted accounting
principles that have been discussed with management, ramifications
of the use of such alternative disclosures and treatments, and the
treatment preferred by the Auditors, and (iii) other material
written communications between the Auditors and management, such as
any management letter or schedule of unadjusted differences.

i) The Committee shall establish procedures for (i) the receipt,
retention and treatment of complaints received by the Company
regarding accounting, internal accounting controls, or auditing
matters, and (ii) the confidential, anonymous submission by
employees of the Company of concerns regarding questionable
accounting or auditing matters.

j) The Committee shall make or cause to be made, from time to time,
such other examinations or reviews as the Committee may deem
advisable with respect to the adequacy of the systems of internal
controls and accounting practices of the Company and its
subsidiaries and with respect to current accounting trends and
developments, and the Committee shall take such action with respect
thereto as may be deemed appropriate.

k) The Committee shall review with management and the Auditors the
annual and quarterly financial statements of the Company and any
material changes in accounting principles or practices used in
preparing the statements prior to the filing of a report on Form
10-K or 10-Q with the Securities and Exchange Commission. Such
review will include the items required by SAS 61 (or any successor
standard) as in effect at that time in the case of the annual
statements and SAS 71 (or any successor standard) as in effect at
that time in the case of the quarterly statements.

1) The Committee shall review the status of compliance with laws,
regulations, and internal procedures, contingent liabilities and
risks that

A - 2

may be material to the Company, the scope and status of systems
designed to assure Company compliance with laws, regulations and
internal procedures, through receiving reports from management,
legal counsel and other third parties as determined by the Committee
on such matters, as well as major legislative and regulatory
developments which could materially impact the Company's contingent
liabilities and risks.

m) Unless the Board shall delegate such responsibility to another
committee of the Board composed exclusively of independent
directors, the Committee shall approve all related party
transactions entered into by the Company.

2. Committee Membership Structure, Organization and Requirements.

a) Except as may be permitted under applicable law and listing
standards imposed by The American Stock Exchange, Inc. ("AMEX"), the
Committee shall consist of only independent members of the Board who
will annually be appointed to the Committee by the Board at its
Annual Meeting each year following the Annual Stockholders Meeting.
For purposes of this Charter, Board members' independence shall be
determined in accordance with applicable laws, regulations and
rules, including Section 121B of the rules of AMEX and the listing
standards of AMEX.

b) The Committee shall appoint a Chairman who shall chair meetings of
the Committee and who may call meetings of the Committee as
necessary and appropriate.

c) The Committee shall never consist of less than 3 members.

d) If any member of the Committee shall, during his or her tenure, have
any action occur, engage in any action or transaction or enter into
any relationship, in each case which impacts his or her
independence, such member shall so inform the Committee at the
earliest practicable date. If such member shall be determined to no
longer be independent, then such member shall resign from the
Committee upon the Committee recommending to the Board and the Board
having appointed another independent member of the Board to replace
such member.

e) The Committee membership and composition will be structured to fully
comply with the educational, experience and understanding
requirements as approved by AMEX.

f) If the Board shall determine it to be practicable and desirable, the
Committee membership shall include at least one person who, in the
business judgment of the Board, shall be an "audit committee
financial

A - 3

expert" (as such term is defined pursuant to the rules and
regulations of the Securities and Exchange Commission).

3. Meetings.

a) The Committee will meet at least quarterly with the Auditors as well
as the Company's Chief Financial Officer ("CFO") and Chief Executive
Officer ("CEO") and other members of management to receive a report
and to review any issues relating to the Company's financial
statements.

b) The Committee may meet at any time either in person or by telephone
conference call.

c) Meetings of the Committee may be called by the Chairman of the
Committee, by the Company's CFO or CEO upon giving each member of
the Committee at least 24 hours' notice, unless notice is waived by
the Committee members.

d) A majority of the Committee being present will constitute a quorum
for any meeting of the Committee.

e) The Committee may at its discretion meet independently of any member
of management including holding meetings with the Auditors at any
time.

4. Committee Authority and Processes.

a) The Committee may seek the advice, interpretation and opinion of the
Auditors, the Company's CFO or Corporate Secretary regarding any
laws, rules, regulations, requirements or other matters affecting
the Company, its financial statements and its proper disclosures or
any other matters relating to the Committee's duties and
responsibilities.

b) The Committee may, independently and at its sole discretion, retain
independent counsel, experts and other advisers as it deems
necessary to carry out its duties and responsibilities.

c) In the event the Committee shall reach a point of disagreement with
the Company's CFO concerning any issue or point of disclosure to be
made in the financial statements of the Company, then the Committee
shall refer such issue to the Board for consideration.

d) The Committee shall be authorized, in its judgment, to remove and
replace the Company's Auditors, including without limitation when
and if the Committee shall determine such Auditors cannot act
objectively or independently as Auditors of the Company.

A - 4

e) The Committee will receive from the Company appropriate funding, as
determined by the Committee, in its capacity as a committee of the
Board, for payment of compensation: (i) to any registered public
accounting firm engaged for the purpose of rendering or issuing an
audit report or related work or performing other audit, review or
attestation services for the Company, (ii) to any advisers employed
by the Committee as described under section 4(b) above, and (iii)
for continuing education as needed related to their role on the
audit committee.

The Charter is adopted by the Board effective as of the date first above
written. It replaces and supersedes all prior charters governing the Committee.

/s/ Elmer A. Johnston
----------------------------------------
Elmer A. Johnston, Secretary

A - 5

HARKEN ENERGY CORPORATION
580 WESTLAKE PARK BLVD.
SUITE 600
HOUSTON, TX 77079

VOTE BY INTERNET - www._________.com

Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time on February 16, 2004.
Have your proxy card in hand when you access the web 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 - __________________

Use any touch-tone telephone to transmit your voting instructions up until 11:59
P.M. Eastern Time on February 16, 2004. 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, c/o
[__________________________________________________________________].

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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HARKEN ENERGY CORPORATION

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS ONE, TWO, THREE, FOUR
AND SIX. IF PROPOSAL ONE IS NOT APPROVED, YOUR BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR PROPOSAL FIVE.

Vote on Proposals

PROPOSAL FOUR: Election of five For Withhold For All To withhold authority to vote, mark
directors of Harken, to hold office All All Except "For All Except" and write the nominees
in accordance with Harken's |_| |_| |_| number on the line below
Certificate of Incorporation until
the 2004 Annual Meeting of ---------------------------------------
Stockholders.

Nominees: 01) Michael M. Ameen, Jr.
02) Mikel D. Faulkner
03) Dr. J. William Petty
04) Alan G. Quasha
05) H. A. Smith

For Against Abstain
--- ------- -------

PROPOSAL ONE: Approve an amendment to Harken's Certificate of Incorporation to eliminate |_| |_| |_|
the classification of directors.

PROPOSAL TWO: Approve an amendment to Harken's Certificate of Incorporation to eliminate the |_| |_| |_|
requirement that the holders of two-thirds of the outstanding shares vote for
the removal of any or all directors.

PROPOSAL THREE: Approve an amendment to Harken's Certificate of Incorporation to eliminate |_| |_| |_|
cumulative voting.

PROPOSAL SIX: Approve an amendment to Harken's Certificate of Incorporation to increase the |_| |_| |_|
number of shares of Harken's Common Stock, par value $0.01, authorized for
issuance.

PROPOSAL FIVE: If Proposal One is not approved, election of For Withhold For All To withhold authority to vote, mark
two Class A Directors of Harken, to hold office in accordance All All Except "For All Except" and write the nominees
with Harken's Certificate of Incorporation until the 2006 |_| |_| |_| number on the line below
Annual Meeting of Stockholders.
---------------------------------------

Nominees: 01) Mikel D. Faulkner
02) Dr. J. William Petty

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

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

(VOTING INSTRUCTION: TO CUMULATE THE VOTES FOR ONE OR MORE OF THE NOMINEE(S) IN
PROPOSALS FOUR OR FIVE ABOVE, 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. |_|

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

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

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HARKEN ENERGY CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD FEBRUARY 17, 2004

The undersigned hereby (1) acknowledges receipt of the Notice of Annual
Meeting of Stockholders of Harken Energy Corporation ("Harken") to be held
February 17, 2004, and (2) constitutes and appoints Elmer A. Johnston 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.)