HKN, Inc. (NYSE Amex: HKN) ("HKN") today reported its interim financial results for the three and nine months ended September 30, 2010. HKN reported net income attributable to the Company of $1.9 million during the nine months ended September 30, 2010 as compared to a net loss of $1.7 million for the respective prior period in 2009.

Focus on Efficient Operations and Investment Activities

--  During 2010, our oil and gas revenue has been comprised of
    approximately 87% oil sales and 13% natural gas sales. During this
    quarterly period, our results of operations reflected increased oil
    and natural gas revenues as a result of both increased commodity prices
    and increased natural gas production.

--  Natural gas production increased 35% in the third quarter 2010 compared
    to the prior year period due primarily due to the successful
    recompletion of one of our wells (the SL 14589 #3) in our Lake
    Raccourci field. We hold an average 55% operated working interest in
    the wells in this field.

--  Our oil revenues increased slightly by $50 thousand to approximately
    $2.4 million during the third quarter 2010. We realized a 14% increase
    in oil prices received, while overall oil production decreased by 10%
    in the third quarter 2010 primarily as a result of downtime at our Main
    Pass 35 field. We experienced lower than normal production at this
    property during the third quarter as a result of the flowline repairs
    as well as compressor maintenance and repairs. Also, during 2010, work
    continued on pipeline modifications mandated by the Corps of Engineers
    to a third-party gas sales line that serves our Main Pass 35 offshore
    facility. The work had previously been postponed due to the Mississippi
    River conditions, but we anticipate that work will be completed during
    November 2010. We also began work to upgrade the flowlines and to
    increase capacity at our Main Pass 35 facility which will allow us to
    bring additional third party or operated production volumes through the
    facility in the future. We experienced lower than normal production at
    this property during the third quarter as a result of the flowline
    repairs as well as compressor maintenance and repairs.

--  Our investments in both Global Energy Development PLC ("Global") and
    BriteWater International LLC ("BWI") represent a significant
    concentration of value of our assets. Global is a petroleum exploration
    and production company focused on Latin America, and their shares are
    traded on the AIM, a market operated by the London Stock Exchange.
    BWI is a privately-held company which owns a patented oilfield emulsion
    breaking "OHSOL" technology which can be used to purify oilfield
    emulsions by breaking and separating the emulsions into oil, water and
    solids to recover hydrocarbons and reduce wastes. During 2010, we
    extended financing notes to both Global and BWI in order to promote
    the development activities of these companies while also earning a 10%
    and 8% annualized rate of return, respectively, on our funds during the
    term of these notes. At September 30, 2010, the outstanding principal
    balance of the notes receivable from Global and BWI were $5 million and
    $1.7 million, respectively. Both loans are secured and provide for cash
    interest payments either on a monthly or quarterly basis, respectively.

HKN's operating results for the three and nine months ended September 30, 2010 and 2009 are as follows: (in thousands, except for share and per share amounts)

                                                     Three Months Ended
                                                  ------------------------
                                                        September 30,
                                                  ------------------------
                                                      2010         2009
                                                  -----------  -----------
                                                  (unaudited)  (unaudited)

Oil Revenues                                      $     2,419  $     2,369
Gas Revenues                                      $       442  $       280
Fees, Interest and Other Revenues                 $       445  $       448
Oil and Gas Operating Expenses                    $     2,029  $     2,169
General and Administrative Expenses               $       899  $       834
Benefit for Doubtful Accounts                     $         -  $       (49)
Operating Margin (Non-GAAP; see reconciliation
 below)                                           $       378  $       143
Depreciation, Depletion, Amortization and
 Accretion                                        $       806  $       752
Net Loss                                          $      (450) $      (615)
Net Loss Attributed to Noncontrolling Interests   $       221  $       160
Net Loss Attributed to HKN, Inc.                  $      (229) $      (455)
Net Loss Attributed to Common Stock               $      (233) $      (528)
Basic and Diluted Net Loss per Common Share       $     (0.02) $     (0.05)
Basic and Diluted Weighted Average Common Shares
 Outstanding                                        9,629,855    9,639,077



                                                      Nine Months Ended
                                                  ------------------------
                                                        September 30,
                                                  ------------------------
                                                      2010         2009
                                                  -----------  -----------
                                                  (unaudited)  (unaudited)

Oil Revenues                                      $     7,319  $     6,108
Gas Revenues                                      $     1,095  $     1,344
Fees, Interest and Other Revenues                 $     1,213  $     1,746
Oil and Gas Operating Expenses                    $     5,313  $     5,981
General and Administrative Expenses               $     2,392  $     2,023
Provision (Benefit) for Doubtful Accounts         $       (21) $       222
Operating Margin (Non-GAAP; see reconciliation
 below)                                           $     1,943  $       972
Depreciation, Depletion, Amortization and
 Accretion                                        $     2,300  $     2,736
Net Income (Loss)                                 $     1,446  $    (1,891)
Net Loss Attributed to Noncontrolling Interests   $       476  $       160
Net Income (Loss) Attributed to HKN, Inc.         $     1,922  $    (1,731)
Net Income (Loss) Attributed to Common Stock      $     1,918  $    (2,086)
Basic and Diluted Net Income (Loss) per Common
 Share                                            $      0.20  $     (0.23)
Basic and Diluted Weighted Average Common Shares
 Outstanding                                        9,579,462    9,165,322



Balance Sheet Summary (in thousands)


                                               September 30,  December 31,
                                               -------------  -------------
                                                   2010           2009
                                               -------------  -------------
                                                (unaudited)

Current Ratio (1)                                  3.37 to 1      2.74 to 1
Working Capital (2)                            $       8,797  $       5,989
Cash and Marketable Securities                 $       5,074  $       7,030
Total Debt                                     $           -  $           -
Stockholders' Equity                           $      58,003  $      57,831
Total Liabilities to Equity                        0.19 to 1      0.18 to 1


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




NON-GAAP FINANCIAL MEASURE

Reconciliation of Operating Margin to Net Income (Loss) (in thousands)


                                                     Three Months Ended
                                                        September 30,
                                                  ------------------------
                                                      2010         2009
                                                  -----------  -----------
                                                  (unaudited)  (unaudited)

Net Loss - GAAP                                   $      (450) $      (615)
Depreciation, Depletion, and Amortization                 806          752
Interest Expense and Other Losses (Gains)                  22          (42)
Equity in Losses of Spitfire                                -           50
Gain on Sale of Investment                                  -           (2)
                                                  -----------  -----------
Operating Margin                                  $       378  $       143
                                                  ===========  ===========




                                                      Nine Months Ended
                                                        September 30,
                                                  ------------------------
                                                      2010         2009
                                                  -----------  -----------
                                                  (unaudited)   (unaudited)
Net Income (Loss) - GAAP                          $     1,446  $    (1,891)
Depreciation, Depletion, and Amortization               2,300        2,736
Interest Expense and Other Losses                          64           17
Equity in Losses of Spitfire                               20          173
Gain on Sale of Investment                             (1,887)         (23)
Income Tax Benefit                                          -          (40)
                                                  -----------  -----------
Operating Margin                                  $     1,943  $       972
                                                  ===========  ===========


Management believes the presentation of this non-GAAP financial measure, in connection with the results for the three and nine months ended September 30, 2010 and 2009, provides useful information to investors regarding our results of operations. Management also believes that this non-GAAP financial measure provides a picture of our results that is comparable among reporting periods and provides factors that influenced performance during the period under the report. This non-GAAP financial measure should be considered in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

HKN, Inc. is an independent energy company engaged in the development and production of crude oil, natural gas and coalbed methane assets and in the active management of energy-based investments. Additional information may be found at the HKN Web site, www.hkninc.com. Please e-mail all investor inquiries to Investorrelations@hkninc.com.

Certain statements in this announcement and inferences derived therefrom may be regarded as "forward-looking statements" within the meaning of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on the opinions and estimates of management at the time the statements are made. Management's current view and plans, however, are subject to numerous known and unknown risks, uncertainties and other factors that may cause the actual results, performance, timing or achievements of HKN to be materially different from any results, performance, timing or achievements expressed or implied by such forward-looking statements. The various uncertainties, variables, and other risks include those discussed in detail in the Company's SEC filings, including the Annual Report on Form 10-K filed on February 18, 2010. HKN undertakes no duty to update or revise any forward-looking statements. Actual results may vary materially.

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