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v2.3.0.11
Note 11 - STOCKHOLDERS’ EQUITY
6 Months Ended
Jun. 30, 2011
Stockholders' Equity Note Disclosure [Text Block]
(11)           STOCKHOLDERS’ EQUITY

No changes in the number of preferred shares occurred during the six months ended June 30, 2011. The changes in the number of common shares held during the six months ended June 30, 2011 are as follows:

   
Number of Common
 
    Description
 
Shares
 
Balance as of December 31, 2010
    10,026,098  
Shares issued for preferred stock dividends
    74  
Shares issued for purchase of additional BWI ownership interest
    1,245,373  
Shares issued related to Rights Offering
    7,500,000  
Balance as of June 30, 2011
    18,771,545  

In April 2011, the previously announced rights offering was fully subscribed for, and upon its closing we issued 7.5 million shares of our common stock at the subscription price of $2.00 per share. The net proceeds to the Company from the sale of the shares were approximately $14.8 million.

Treasury Stock At June 30, 2011 and December 31, 2010, we held no shares of treasury stock. During the six months ended June 30, 2011, we did not purchase or retire any shares of our common stock. As of June 30, 2011, approximately 458 thousand shares remained available for repurchase under our repurchase program.

        Additional Paid in Capital - Additional paid in capital increased by $3.14 million during the period ended June 30, 2011. This is a result of our purchase of additional interests in BWI in June 2011 in exchange for the issuance of 1.2 million restricted shares of our common stock. The value of the common stock that we issued as part of the transaction was valued at $2.3 million. The difference between the value of the common stock we issued and the resulting decrease to noncontrolling interest equity was recorded in additional paid-in capital.

   
Six months ended
 
   
June 30, 2011
 
       
Net loss attributable to HKN, Inc.
  $ (870 )
         
Transfer from the noncontrolling interest
       
         
Increase in HKN's paid-in capital for additional BWI interest purchased
    3,140  
         
Net transfers from noncontrolling interest
    3,140  
         
Change from net loss attributable to
       
HKN, Inc. and transfers from noncontrolling interest
  $ 2,270  

Noncontrolling Interest – At December 31, 2010, we recorded the non controlling interests related to our investment in BWI of 47.91% in our consolidated condensed balance sheet.

In June 2011, HKN purchased an additional 46.08% of the outstanding units of BWI in exchange for the issuance of 1,245,373 restricted shares of our common stock. Subsequent to the closing of the transaction, HKN’s interest in BWI was 98.17%. Please see Note 2 –“Investment in BriteWater International, LLC” for additional information regarding our investment in BWI.

The changes in the BWI noncontrolling interest during the six months ended June 30, 2011 were as follows (in thousands):

Noncontrolling interest at beginning of period
  $ 3,591  
         
Losses attributable to noncontrolling interest
    (319 )
         
Decrease in noncontrolling ownership due to purchase of additional interest
    (3,168 )
         
Noncontrolling interest at end of period
  $ 104