JUNE 2007

HKN, Inc.HKN, Inc.

Except for historical information, the matters discussed in this presentation may

be regarded as "forward-looking statements" within the meaning of the

Securities Exchange Act of 1934, as amended. Forward-looking statements are

based on the opinions and estimates of management at the time the

statements are made and involve risks and uncertainties that may cause the

actual results of HKN, Inc. to be materially different from those expressed or

implied by such forward-looking statements. These risks and uncertainties are

discussed in detail in HKN, Inc.’s SEC filings, including its Annual Report on

Form 10-K for the fiscal year ended December 31, 2006. HKN, Inc. undertakes

no duty to update or revise any forward-looking statements.

SAFE HARBOR STATEMENT

An established independent energy company. Listed on the American StockExchange, traded under the symbol of HKN.

Engaged directly in the energy industry through oil and gas exploration,exploitation, development and production activities.

Engaged indirectly in the energy industry through the management of investmentsin energy industry securities on domestic and international security exchanges.

COMPANY OVERVIEW

Executive Management team with extensive energy industry experience and expertise.

James W. Denny III

Vice President of HKN, Inc.

President of Gulf Energy Management37 years of Operational Experience * Registered Professional Engineer

Certified Earth Scientist * BS – Science

Former Vice President of Operations for Polaris Exploration and Sr. Engineer for Xplor Energy

Richard O. Cottle

Vice President of Gulf Energy ManagementBSFE in Fuels Engineering * Former Engineering Experience for Mobil and Marathon Oil

20 years Energy Experience

Stan Brownell

Consultant - Energy and TradingPresident of Strategically Justified Businesses, LLC

MBA – Finance and BS – Math & Physics

Former COO of IBA, LTD and NUI Energy Brokers, Inc.

Other Energy Experience with Small to Medium Independents

Mark S. Holt

Land ManagerBBA – Petroleum Land Management * Former Vice President of Land for 3TEC Energy Corp.

28 years Experience in Exploration, Production, Acquisition and Divestment

Kris Hartmann

Staff Geologist18 years of Energy Experience

BS – Science * Former Geologist for New London Oil, Inc.

MANAGEMENT OVERVIEW

Mikel D. FaulknerPresident and Chief Executive Officer

(see next page for summary of business experience)

Anna M. WilliamsVice President of Finance and Chief Financial Officer

15 years of Financial Experience * CPA with Audit Management Experience

SOX 404 Compliance Officer * BBA - Accounting

Elmer A. JohnstonVice President - General Counsel and Secretary

16 years of Legal Experience * Former Sr. Counsel of Global Energy PLCFormer Associate Attorney for Winstead, Secherest & Minick * BBA - Accounting

JD and LLM – Energy and Environment

Rodger L. EhrlishTreasurer

20 years of Energy Experience * CPA * BBA - AccountingSOX 404 Assistant Compliance Officer * Former Director of Finance for Global Energy PLC

Sarah GaschChief Accounting Officer

10 years Financial Experience * BBA - Accounting

Former Financial Reporting Manager of Magnum Hunter Resources

Alan G. Quasha

Chairman(see next page for summary of business experience)

Board of Directors with extensive energy capital fund raising capabilities, andlegal and financial expertise.

Michael M. Ameen, Jr.

Independent Consultant on Middle East AffairsFormer Director of American Near East Refugee Aid

Former Director of Amideast

Former Director of Middle East Institute

Former Director of International College in Beirut, Lebanon

Former Vice President of Mobil Middle East Development Corporation

Member of Energy Intelligence Group International Advisory Board

H. A. Smith

Consultant to Smith International Inc.,

an oil field service companyFormer Vice President of Customer Relations for Smith International, Inc.

Former Director of Brigham Exploration Company

Member of Brigham Exploration Company Audit Committee

BOARD OF DIRECTORS OVERVIEW

Mikel D. Faulkner

President and Chief Executive Officer of HKN, Inc.30 years of Energy Related Experience

Undergraduate Degree in Math and Physics

MBA in Business Administration

CPA with Large Public Accounting Firm Experience

Officer in US Naval Nuclear Power Program

Chairman of Global Energy Development PLC

Dr. J. William Petty

Professor of Finance and the W.W. Caruth Chairholder ofEntrepreneurship at Baylor University

Former Dean of the Business School at Abilene Christian University

Subject Matter Expert on a best-practices study by the American Productivity and Quality Center

Served on a research team for the Australian Department of Industry

Alan G. Quasha

Chairman of the Board of HKN, Inc.President of Quadrant Management, Inc.

Former Director of Compagnie Financi re Richemont SA.

Former Director of American Express Fund

Former Governor of the American Stock Exchange

Harvard Law Degree

High Oil Prices

WHY HIGH OIL PRICES WILL NOT GO AWAY

Strong Economic GrowthLimited OPEC

Surplus Capacity

Strong Seasonal Product Demand

China’s Pent-UpDemand

Infrastructure LimitationsRisks To Supply

OPEC’s Conservative Management Style

Rising F&D Costs

Under Investment

Speculators

Weak U.S. $

• Alternative fuels a non-factor:

“Most experts agree that emerging renewables like wind, solar and biofuels will only contribute 2%

of the world’s total energy needs in 2030” Source: Chairman of ExxonMobil, Feb 07

• Depleting resources through under-investment / giant producing fields now old and declining:

“Large number of the giant older fields which anchor the world’s hydrocarbon production base have

now started to decline” Source: Matthew Simmons / Author of Twilight in the Desert, Oct 06

ENERGY BOOM SET TO CONTINUE

Oil and gas reserves originally are predicted from a geologic concept, defined by seismic, discovered bydrilling and confirmed by production. This sequence of development is reflected in four chronological

categories of reserves:Potential (P4), Possible (P3), Probable (P2), Proved (P1)

RESERVE REPORT DATED DECEMBER 31, 2006

Note:(1) Utilizing production history, geologic data and industry standard development practices these reserves have

been evaluated by two well known independent energy firms, Netherland Sewell and Associates, Inc. &Sproule Associates Ltd. as of December 31, 2006 and August 31, 2006 respectively.

Geologicalconcept

LeaseAcreage

Agreement

EvaluateAcreage

Inventory

Independent Scientific Evaluation (Note 1)

414.0“Potential”

BCFE

8.7“Possible”

BCFE

P4 P3 P2

4.2“Probable”

BCFE

18.1“Proved”

BCFE

2.7BCFE

“Production”

463,000 Gross Acres

P1

RESERVES VALUED BY INDEPENDENT ENGINEERS

Principally in the onshore and offshore Gulf Coast regions of South Texas and Louisiana.

GULF COAST OPERATIONS

• During 2006, the Company drilled or participated in the drilling of 9 exploration anddevelopment wells and successfully completed 6 of those wells (Reserve additions forthe year as a result were approximately 2 Bcfe).

• At the end of 2006, the Company operated or owned a non-operating working interest in70 oil wells, 73 gas wells, and 14 injection wells in the Gulf Coast area of the UnitedStates.

• Proved reserves at December 31, 2006 were calculated to be $71 million of Future NetRevenues and $51 million of 10% Discounted Future Net Revenues by an independentengineering group.

ErathFranklin

Rusk

Panola

Henderson

De SotoNavarro

Somervell

Caldwell

HillComanche

TensasRed River

JasperSmith

Claiborne

Bosque

Winn

Natchitoches

Cherokee

nels

Coleman Brown Anderson

Simpson

Copiah

HamiltonFreestone

Shelby

CatahoulaLa Salle

Jefferson

McLennan

NacogdochesSabine

Jones

Limestone

Grant

Covington

Jefferson Davis

Concordia

Lawrence

Adams

Mills

Lincoln

Coryell San Augustine

Leon

Franklin

SabineHouston

Concho

AngelinaFalls RapidesMcCulloch

San SabaLampasas

Marion Lamar Forrest Perry

Trinity

Wilkinson

Vernon

Robertson

AmitePike Walthall

Avoyelles

Bell

Newton

JasperPolkMilam

MadisonMenard

TylerWalker

Burnet Pointe Coupee

Pearl River

Washington

Tangipahoa

St. HelenaEast Feliciana

West Feliciana

West Feliciana

Evangeline

Brazos

MasonLlano

Stone

Williamson

San Jacinto

AllenBeauregard

Grimes

St. Landry

Burleson

East Baton Rouge

Kimble

St. Tammany

Harrison

West Baton Rouge LivingstonHancock

Travis

MontgomeryLeeHardin

Gillespie

BlancoSt. Martin

St. Martin

Iberville

Calcasieu

Jefferson Davis

Liberty

Acadia

Bastrop

Washington

LafayetteAscension

Hays

St. John the Baptist

Kerr

Waller

Orange

JeffersonFayetteHarris

St. James

Orleans

Vermilion

Kendall

Austin

St. Charles

Real

Assumption

Caldwell

Cameron

St. Bernard

Comal

Colorado

St. Mary

LaFourche

Bandera

Plaquemines

Chambers

Guadalupe

Fort Bend

GonzalesBexar

Medina

Iberia

Lavaca

Wharton

Uvalde

Brazoria

Galveston

Galveston

Galveston

Wilson

De Witt

Terrebonne

JacksonAtascosa

Matagorda

Jefferson

Jefferson

Victoria

ZavalaFrio

Goliad

Live Oak

BeeLa Salle McMullen

Dimmit

Refugio

Calhoun

CalhounCalhoun

CalhounCalhoun

Webb

San Patricio

Aransas

AransasAransas

DuvalJim Wells Nueces

Nueces

Kleberg Kleberg

Jim HoggZapata Brooks

Kenedy

Kenedy

Kenedy

Starr

Hidalgo

Willacy Willacy

Cameron

Cameron

Texas

Louisiana

Mississippi

TerrebonneTerrebonne

Lapeyrouse

Point Au Fer

Mosquito BayouFohs-Shallow

Old Ocean

Inexs

/BP 2

D Are

a

Proposed 3D

Dawdy

S. Smithers

MustangSpeaks

Chenier Purdue

Jeanerette Verret

Abbeville

Sorrel

Creole

Allen

Rayburn

E. Holly

Wharco

Karnes

Iberia

Bay

Beach

Raymondville

Son Of Tiger

Lake

Creek

Ranch

NW

Luck

Shiling

South

Beach

Bayou

E. Lake

Branville

Bright

Raccourci

35

Point a la

Pass

HacheLake

Main

Raccourci

35

Point a la

Pass

HacheLake

2007 Activity MapGulf Coast

Onshore Texas & Louisiana

SIGNIFICANT PROPERTIES

3,000 Square Miles of 3D Seismic

20+ Year Database of Technical Data

Experienced in-house staff

SE Louisiana

Dedicated 2 manG&G Team with 40years experienceeach

Louisiana Gulf CoastKitty Hawk Energy

Six man generationshopVery experiencedand proven staffLong term

relationship

Texas Gulf CoastDrill Partners

Two 2-man G&GTeams working large2D database frommajor oil and gascompanyThree drill ready

prospects generated todate

35 square mile 3Dproposed to delineateeight additional leads

Relationships

Combined 80+ years ofindustry experience forProspect Review Team

Participation in industryorganizations and forums:•Exploration managers•Society of IndependentProfessional Earth Scientists(SIPES)•Software EngineeringInstitute (SEI)•Producers forum

CurrentProspect Inventory

2 Pilot CBM ProjectsSouth Louisiana6 wells in 3 parishesSouth Texas13 wells in 6 counties

40 mi2 New 3-D Seismic

PIPELINE OF PROSPECTS

COAL BED METHANE OPERATIONS

• Hold three coal bed methane exploration and development agreements in Indiana and Ohio.

• CBM assets generally have a longer reserve life, 15-20 years longer than Gulf Coast assets.

• 420,000 Gross acres contracted with third party with successful track record in coal bed methane developments.

• Efforts in 2006 and through March 31, 2007 included:• The Indiana Posey Prospect – The Company has funded approximately 80% of a $1.28 million project for the first of two pilot well

projects on the Indiana Prospect. The drilling of the first three pilot wells was completed and the commencement of the drilling of twoadditional pilot wells began in the first quarter of 2007.

• The Ohio Cumberland Prospect – The Company elected to proceed and fund Phase II of the agreement. With regard to Phase II, theCompany made an additional $500 thousand prospect acquisition payment and intends to fund a $1.28 million project in 2007 for thefirst two pilot well projects on the Cumberland Prospect.

• The Triangle Prospect Area in Ohio – The coring phase commenced in December 2006 and was completed during the first quarter of2007. The core samples are currently being analyzed. The Company may elect to proceed and fund a Phase II of pilot wells of thisprospect in 2007.

Significant holdings in Coal Bed Methane (CBM) Projects.

Posey Prospect Cumberland Project

Triangle Project

Global Energy Development PLC (“Global”) has exploration, development and production activitiesin Colombia and exploration activities in Panama and Peru. See www.globalenergyplc.com fordetailed information on Global.

INVESTMENTS

• Shares held by HKN, Inc.: 11,893,463 (approximately 34% of the outstanding common stock).

• Shares currently trading on the London Stock Exchange (AIM) under trading symbol GED.

• Price per share at May 31, 2007 was approximately 1.00 GBP or approximately $2.00 per share.

• Value per share at original listing was 50p, or approximately $0.90 per share.

GLOBAL ENERGY DEVELOPMENT, PLC

• Good Prospectivity

• “Colombia remains relatively unexplored. More than 80% of the country’s territory remains unexplored” Source: National Hydrocarbons

Agency of Colombia, Feb 07

• “Of Peru’s 18 basins, 7 basins are still unexplored and 4 basins are under-explored” Source: PeruPetro S.A., Dec 06

• Low Political and Economic risk with stable industry history - unbroken history of contract sanctity in areas of interest (Columbia & Peru).

• “Colombia has one of the most stable economies in Latin America, keeping a steady growth rate over the last few decades” Source:

PricewaterhouseCoopers, 2006

• “Election results in 2006 in Peru and Colombia have been more positive than expected…..Garcia’s victory in Peru is a positive for

investors………Uribe won Colombia’s May election with a stronger than expected mandate and the positive turnaround for Colombia continues

on pace” Source: Schroders, Nov 06

Contracts held

COLOMBIA

PERU

“Following in the footprints ( )of the majors”

Global has evaluated and contracted acreageheld by the ‘majors’ decades ago.

Strong historical data from previous activity.

PANAMA

1 Bolivar - Exxon, 1950s-70s2 Bocachico - Chevron/Texaco,

1950s-60s

3 Los Sauces - Elf

4 Rio Verde - Elf5 Luna Llena - Oxy/ Shell, 1980s6 Valle Lunar - Oxy/ Shell, 1980s

7 Alcaravan - Texaco

8 Los Hatos - Texaco9 Block 95 - Amoco, 1970s10 Garachine - Gulf Oil/Sinclair Oil/

local companies, 1920s-70s

Known producing basins

GLOBAL FOOTPRINT STRATEGY

Oil and gas exploration efforts are originally based on a geologic concept, defined by seismic, discovered bydrilling and confirmed by production. This sequence of development is reflected in 4 chronological categories ofreserves:

Potential (P4), Possible (P3), Probable (P2), Proved (P1)

GLOBAL INCREASED ALL CATEGORIES OF RESERVES IN 2006 OVER 2005

Note:Utilizing production history, geologic data and industry standard development practices these reserves havebeen evaluated by one of the world’s leading reserve engineering companies, Ryder Scott Company, basedupon an approximate Brent Price of $60.14 as of December 31, 2006.

Geologicalconcept

Negotiatecontract

EvaluateAcreage

Inventory

Independent Scientific Evaluation (Ryder Scott)

211,210,000“Potential”

barrels

62,351,000“Possible”

barrels

P4 P3 P2 P1

13,870,000“Probable”

barrels

5,540,000“Proved”barrels

400,000barrels

“Production”

$1.25 billionNPV @ 10%

$299 millionNPV @ 10%

$128 millionNPV @ 10%

8 contracts inColombia and Peru

GLOBAL RESERVES

Canadian growth strategy. Spitfire Energy, Ltd. is an independent public company (TSX-V:SEL)actively engaged in the exploration, development and production of crude oil, natural gas andnatural liquids in Western Canada.

INVESTMENTS

• Spitfire’s management owns 42% of SEL.

• HKN, Inc. currently owns approximately 10% of approximately 3 million of Spitfire’s currently outstanding shares.Last trade price was approximately 0.60 CDN or $0.56 at May 31, 2007.

• An emerging junior oil and gas company based in Calgary, Alberta.

• Business strategy involves a conservative approach to growth in net asset value per share by drilling internallygenerated exploitation opportunities, optimizing production and reducing operating costs and making selectedstrategic acquisitions.

• Strong inventory of land, seismic and drilling locations for multi-zone natural gas and medium oil prospects,including 24,608 net acres of undeveloped land.

• Capitalize on team’s local experience (over 25 years average per person of industry experience) to exploit assets andmanage them effectively.

SPITFIRE ENERGY LTD.

During 2006, the company began to manage investments in energy industry securities traded on domesticsecurity exchanges. At December 31, 2006, we held approximately $8 million in notional value of exchange-traded options on future contracts and common stocks.

INVESTMENTS

• Commenced August 15, 2006.

• Managed through an Investment Committee with periodic oversight by the Board of Directors.

• Portfolio includes investments associated with approximately 20 to 30 energy stocks. Maximum notional valueis limited to $20 million.

$ 484,000 $ 292,000Total return on investments (including interest)

$ 9,610,000$ 7,949,000Total notional exposure

19.11 % 11.7 %Annualized rate of return (prior to expenses)

(Start-up period of 4.5 months)

20072006

March 31,December 31,

MARKET INVESTMENT ACTIVITIES

$ 27,023 $ 28,962 $ 33,480Working Capital (1)

$ 26,260 $ 31,664 $ 29,269Cash and Other Cash Equivalents

$ 2,534 $ 11,189 $ 6,624Operating Margin (3)

$ - $ - $ -Long Term Debt

$ 449 $ 257 $ 25,819Net Income (4)

$ 1,086 $ 5,649 $ 6,950General and Administrative Expense

$ 5,810 $ 25,170 $ 18,862Revenues and Other

$ 112,850 $ 125,149 $ 150,489Total Assets (2)

4.36 to 13.29 to 13.19 to 1Ratio

8,041 12,627 15,272Current Liabilities

$ 35,064 $ 41,589 $ 48,752Current Assets

2007 (unaudited)2006 (5)2005 (5)

March 31,(In Thousands)

December 31,(In Thousands)

HKN, INC. FINANCIAL RESULTS

Notes:(1) Working capital is the difference between current assets and current liabilities.(2) Change in total assets primarily due to change in market value of Global.(3) “Non-GAAP” financial measure; operating margin is total revenues less oil and gas operating and general and administrative expenses.(4) Net Income in 2005 primarily due to gains on market sales of significant ownership in Global.(5) During 2006, we deconsolidated Global from our financial statements. These pro-forma balance sheets and results of operations presented above are

unaudited and give effect to the deconsolidation of Global as if it had been effective for all periods presented.

REASONS TO FOCUS ON HKN, INC.

• HKN, Inc. currently trading at a significant discount to book value:

Currently trading at approximately $0.10 per share under December 31, 2006 estimated book value per share of $0.48.

• Excellent Fundamentals:

Proved reserves audited by Netherland Sewell & Associates, $71 million FNR in Proved Reserves.

Diverse acreage portfolio with significant growth potential from development of CBM assets.

Profitable with cash flow from production directed towards capital expenditure and investments.

Cost containment and reduction in preferred securities obligations leading to several years ofimproving financials.

Significant upside growth potential from investments in Global, Spitfire, and market investmentactivities.

Significant upside growth potential from exploration efforts on the Gulf Coast and through CBM.

• Activity leading to increasing value:

Current and near-term drilling.

New strong and motivated operator.

Excellent fundamentals & industry metrics

APPENDICES

1.49 million BOE- no activity in 06ExplorationLos Sauces (Colombia)

Production,Development &Exploration

Exploration

Exploration

Production,Development &Exploration

Production &Development

Exploration

Production &Development

Status

211.21 million BOE81.8 million BOETotal

-5.2 million BOERio Verde (Colombia)

3.05 million BOE0.3 million BOELuna Llena (Colombia)

18.67 million BOE- not signedGarachine (Panama)

25.03 million BOE46.1 million BOEBolivar (Colombia)

-4.4 million BOEBocachico (Colombia)

162.97 million BOE21.7 million BOEBlock 95 (Peru)

-4.1 million BOEAlcaravan &Los Hatos (Colombia)

Exploration Potential Resources (P4) (asat 1 July 06)

Risked, Most Likely Case Recoverable

Barrels of Gross Resources

P1 + P2 + P3(as at Dec 06)

Contract / TEA Name

All contracts and TEAs currently 100% owned by Global

Proved plus Probable plus Possible Reserves independently reported by Ryder Scott Company, LP as at 31 Dec 05 & 31 Dec 06

Risked, Most Likely case recoverable barrels of gross resources independently reported by Ryder Scott Company, LP as at 1 July 2006

BOE – barrels of oil equivalent

GLOBAL SUMMARY OF ASSETS & RESERVES/RESOURCES

Note: Utilizing production history, geologic data and industry standard development practices these reserves have been prepared by one of the worlds leading reserve engineeringcompany, Netherland, Sewell & Associates, Inc.

$50,879,700$70,586,20018,138,9767,004,7041,855,712Total Proved Reserves

$11,343,800$20,708,0004,173,1461,510,160443,831Total

4,595,2009,462,2001,818,432825,852165,430Other

4,978,7008,657,3001,625,7780270,963Main Pass 35

$1,769,900$2,588,500728,936684,3087,438Lake Raccourci

Proved Undeveloped Reserves

$18,050,500$27,354,9005,813,6704,094,070286,600Total

2,998,4005,708,300962,315380,81996,916Other

2,529,2003,600,800562,548093,758Main Pass 35

2,034,0002,824,000765,183751,3772,301Raymondville

4,995,3008,229,8001,661,5961,318,06657,255Lapeyrouse

$5,493,600$6,992,0001,862,0281,643,80836,370Lake Raccourci

Proved Developed Non-Producing

21,485,40022,523,3008,152,1601,400,4741,125,281Total

3,362,8004,060,500746,072319,69471,063Other

13,531,40013,816,9006,100,33201,016,722Main Pass 35

1,707,3001,838,300435,813367,43711,396Raymondville

2,416,3002,516,200469,579353,16119,403Lapeyrouse

$467,600$291,400400,364360,1826,697Lake Raccourci

Proved Developed Producing Reserves

PROVED RESERVE SUMMARY

($)($)MCFE(MCF)(BBLS)

VALUE @ 10%REVENUEGAS EQUIV.GASOILFIELD

PRESENTFUTURERESERVES

NET

GULF COAST RESERVESDECEMBER 31, 2006 RESERVE REPORT BY NETHERLAND, SEWELL & ASSOC.

GULF COAST MAJOR FIELD LISTING

Palace Exploration201.13LATerrebonne12.5%Energy XXI1Mosquito Bay

Energy XXI67.97LAAssumption5 %Rozel2E. Lake Verret

PetroQuest Energy and Torch

Oil & Gas Co.

3.40LALaFourche2.0%Petrohawk Energy4Lake Boeuf, SW

PetroQuest Exploration and

Fidelity E&P Co.

50.73LASt. Bernard12.5%Yuma E&P2Branville Bay

Couch Oil & Gas and Sundown

Energy, Inc.

28.50TXChambers5-13%Yuma E&P2South Beach

Browning Oil Co., & Paloma

Resources, LLC

70.00 LAPlaquemines25.0%GEM2Bakers Bay

Stokes & Spiehler129.17LATerrebonne15%Rozel3Creole

Petro Quest Energy26.78LACameron.2-2%Petrohawk /Manti7Backridge

Castex Energy758.88LATerrebonne12.5%Energy XXI13Point Au Fer

Sharon Resources, Inc.,

Diaz Resources, Inc.

91.66TXColorado11.25%Camden Resources Inc.2Allen Ranch

SBN S. Texas 2005 Energy

Fund, Ltd.

2347.52TXWilacy7-27%Cabot (Cody Energy)25Raymondville

ExxonMobil, Rudman

Partnership, American National

Insurance., Unit Petroleum

2549.65LALaFourche7-56%GEM9Lake Raccourci

Apache Corp., Geoil, LLC,

Petrohawk Energy

432.16LATerrebonne10-28%Energy Partners Ltd. &

GEM

13Lapeyrouse

Primal Resources2500.69LAPlaquemines90-96%GEM69Main Pass 35

Key PartnersGEM

Net Acs.

StateCounty/

Parish

GEM

Interest

OperatorWell

Count

Field Name

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Jan-07 Feb-07 Mar-07 Apr-07 May-07

0.00

0.25

0.50

0.75

1.00

Jan-07 Feb-07 Mar-07 Apr-07 May-07

Stock Price (Date of Press Release)

Daily Share Trading Volume (Date of Press Release)

01/03

Opening

Price: $.49

02/28 - HEC Reports Higher Revenue,

Higher Operating Margin and Repurchase of

Common Shares Outstanding in 2006

5/8 - HEC

Reports Profitable

First Quarter 2007

04/02 HEC Announces

Expanded Stock

Repurchase Program,

Corporate Name Change

and Reverse Stock Split

(In

th

ou

sa

nd

s)

04/16 HEC

Announces Progress

on Stock

Repurchases

2007 HEC STOCK PRICE VS VOLUME

CORPORATE DATA

The following table provides information about purchases by the Company during

the period October 1, 2005 through May 31, 2007 of its Common Stock:

17,310,6007,689,400$0.584117,689,400Total

17,310,600908,900$0.46648908,900January 1, 2007 through May 31, 2007 (2)

3,219,5004,365,800$0.574624,365,800January 1, 2006 through December 31, 2006

7,585,3002,414,700$0.662932,414,700October 1, 2005 through December 31, 2005 (1)

(d)

Maximum Number of Shares that

May Yet Be Purchased Under the

Plans or Programs (2)

(c)

Total Number of Shares

Purchased as part of

Publicly Announced

Program (1)

(b)

Average Price Paid per

Share

(a)

Total Number of

Shares Purchased

Period

1. In October 2005, the Company’s Board of Directors authorized a stock repurchase program under which the Company wasauthorized to repurchase up to 10 million shares of its outstanding Common Stock.

2. Effective April 2, 2007, the Board of Directors expanded the stock repurchase program to a total of 25 million shares. As of May31, 2007, 17.3 million shares remained available for repurchase under the expanded repurchase program.

SELECTED FINANCIAL DATA REFLECTING BALANCE SHEET“CLEAN UP” AND SIMPLIFICATION OVER PAST 5 HISTORICAL PERIODS

(1) Working capital is the difference between current assets and current liabilities.(2) See “Notes to Consolidated Financial Statements, Note 11 – Stockholders’ Equity and Note 9 – Redeemable Preferred Stocks” contained in Part II, Item 8 of our Form 10-K for the year ended December 31, 2006, for

further discussion of our preferred stock.(3) During 2006, we deconsolidated Global from our financial Statements. See “Notes to Consolidated Financial Statements, Note 2 – Investment in Global” contained in Part II, Item 8 of our Form 10-K for the year ended

December 31, 2006, for further discussion.

44,000 50,000 50,000 - -Series M preferred stock outstanding (2)

- - 10,000 - -Series L preferred stock outstanding (2)

- - 50,000 - -Series J preferred stock outstanding (2)

- - 78,000 - -Series G4 preferred stock outstanding (2)

- - - 77,000 -Series G3 preferred stock outstanding (2)

1,000 1,000 2,000 62,000 93,000Series G2 preferred stock outstanding (2)

1,600 1,600 14,000 325,000 403,000Series G1 preferred stock outstanding (2)

$ 105,115 $ 90,267 $ 49,532 $ 51,481 $ 4,439Stockholder's equity

$ 7,407 $ 29,488 $ 33,843 $ 15,888 $ 32,593Total

- - 14,858 651 644Global warrant liability

7,407 6,301 5,954 6,305 4,664Asset retirement obligations

- - - 3,239 7,369Accrued preferred stock dividends

- 12,500 - - -Global senior convertible notes

- - - 2,020 -Senior secured notes

- - - - 5,000Investor term loan

- - - - 3,810Bank credit facilities

- 10,687 6,120 - -Share based compensation liability

$ - $ - $ 6,911 $ 3,673 $ 11,106Convertible Notes Payable

Long-term obligations:

$ 125,149 $ 156,163 $ 109,575 $ 82,466 $ 86,729Total assets

$ 28,962 $ 43,617 $ 20,636 $ 6,890 $ (34,215)Working capital/(deficit) (1)

12,627 19,045 17,824 11,696 46,385Current liabilities

$ 41,589 $ 62,662 $ 38,460 $ 18,586 $ 12,170Current assets

(in thousands except for share amounts)Balance Sheet Data:

2006 (3)2005200420032002

December 31,

CORPORATE DATA

Shares issued and outstanding at March 31, 2007:

Common: 219,794,387 Preferred: Series G1: 1,600Series G2: 1,000Series M: 44,000

Warrants: Series L: 3,182,836Series M: 4,255,965

No stock options are outstanding

Auditors:

Hein & Associates, Dallas, TX

Legal Counsel:

Hallett & Perrin, Dallas, TX

Independent Reserve Engineering:

Netherland Sewell and Associates, Inc., Houston, TX

Sproule Associates Ltd.

AMEX:

Roland Savage, Specialist

Michael J. Sokoll, Director of Issuer Services