Note 4 - Investment In Global

12 Months Ended

Dec. 31, 2012

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

(4)           INVESTMENT IN GLOBAL

Our non-current available-for-sale investment consists of our ownership of approximately 34% of Global’s outstanding ordinary shares.

During August 2011 we purchased an additional 233 thousand shares of Global for $266 thousand, increasing our ownership from 33.25% to 33.88%. During 2012, we purchased an additional 230 thousand shares of Global for $411 thousand, increasing our ownership from 33.88% to 34.22%.

At December 31, 2012 and 2011, our investment in Global was equal to the market value of Global’s ordinary shares as follows (in thousands, except share amounts):

	December 31, 2012		December 31, 2011
Shares of Global Stock held by HKN		12,356,768		12,126,768
Closing Price of Global Stock	£	1.18	£	1.06
Foreign Currency Exchange Rate		1.6259		1.5490
Market Value of Investment in Global	$	23,607	$	19,913

The foreign currency translation adjustment of approximately $857 thousand and the unrealized gain on investment of $2.4 million for these changes in market value between the two periods were recorded to other comprehensive income in stockholders’ equity during the year ended December 31, 2012.

Our policy is to review our investment in Global at each reporting period or more often if any indicators of impairment become known.  We continuously monitor macroeconomic indicators and track Global’s stock price volatility for any downward trends in the market.  We also review public financial information including Global’s issued interim financial statements, investor presentations, as well as financial analysts reviews and recommendations for any indicators of an other than temporary impairment in our carrying value. Additionally, we monitor public reports regarding the reserves in Colombia’s Middle Magdalena basin in which Global operates.  In addition to these external indicators, we also assess internally our ability and intent to hold our investment in Global should the fair value drop below our cost. Any resulting other than temporary impairment would be immediately recognized in earnings.