EDGE PETROLEUM CORP

The end of Edge Petroleum. The Mariner sale closed, the plan took effect, and every share of common stock and 5.75% preferred was cancelled for nothing - the company said even on the most optimistic view proceeds would not have covered the secured lenders. It filed to deregister the same day. Unlike some Chapter 11 filers, Edge did not emerge; the business continued inside Mariner Energy and the shell was wound up.

asset acquisition disposition

EDGE PETROLEUM CORP deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

The bankruptcy court confirmed Edge's plan of reorganization and approved the Mariner sale, to take effect around 31 December. The accompanying operating report showed the arithmetic: roughly $241 million of pre-petition debt against a business that had just fetched $243 million, leaving nothing behind the equity.

bankruptcy or receivership

The auction worked: Mariner Energy outbid the PGP stalking horse and won Edge's entire operating business for $243 million against PGP's $191 million, and the court confirmed the plan and approved the sale on 14 December. The extra $52 million went to creditors, not shareholders.

material agreement

EDGE PETROLEUM CORP's exchange filed to remove a class of its securities from listing.

listing compliance notice

Nasdaq moved straight to delisting rather than waiting out the bid-price cure period, removing both the common and the preferred from trading on 13 October, citing the bankruptcy filing and doubts that shareholders had anything left.

listing compliance notice

Edge and all five of its subsidiaries filed for Chapter 11 in Corpus Christi on 1 October 2009, the day after the last extension of its credit facility expired. It came in pre-arranged: the senior secured lenders signed a plan support and lock-up agreement, and PGP Gas Supply Pool No. 3 agreed to buy the whole operating business for $191 million as stalking-horse bidder, subject to a higher bid at auction.

bankruptcy or receivership

The ninth and last amendment: one more month, to 30 September 2009. Edge filed for bankruptcy the day after it expired.

material agreement

The 30 June maturity passed unpaid and was pushed to 31 July, at the price of prepaying $1.14 million of interest up front and $7.5 million of principal by 10 July. From here the facility was extended in one-month steps.

material agreement

The $25 million due on 31 May was also waived, rolled into the 30 June maturity, so the entire debt now stood or fell on a single date.

material agreement

Edge missed the 15 May deadline to produce a refinancing commitment, merger agreement or sale contract, and the lenders simply deleted that default rather than call it - along with a requirement for auditor certificates. The banks were choosing to keep the company alive rather than seize it.

material agreement

The standstill hardened into a deadline. Amendment No. 4 replaced the instalment plan with a $25 million payment on 31 May and full repayment of everything outstanding on 30 June 2009 - about six months' notice that the company had to be sold, merged or refinanced by mid-year.

material agreement

Edge could not make even the deferred first instalment, and bought another seven days - to 17 March - with the other five payments left unchanged.

material agreement

First of what became a chain of standstills: lenders let Edge defer the initial $19 million deficiency instalment by a month, pushing the final one to August, in exchange for $5 million of prepayments. Edge was now buying time a month at a time.

material agreement

The blow that ended Edge. With gas prices collapsed, its lenders halved the borrowing base from $240 million to $125 million, instantly leaving about $114 million drawn that Edge had no way to repay. It had to prepay in six monthly instalments or pledge more property, and hired Parkman Whaling and Akin Gump to look at restructuring.

debt financing

The Chaparral merger was abandoned. Chaparral's own funding fell through - Magnetar and Post Oak walked away from buying its preferred stock, paying Chaparral $5.0 million to be released, $1.5 million of which went to Edge for expenses. Edge was left alone, heavily indebted from the Smith purchase, saying it would consider a sale, asset disposals or new financing.

material agreement termination

With credit markets seizing up, Edge convened its annual meeting and immediately adjourned it to 4 December rather than put the Chaparral merger to a vote, having first amended its bylaws to make clear one record date covers all adjournments. The first visible sign the deal was in trouble.

business combination

Eighteen months after betting the company on Smith Production, Edge agreed to sell itself: an all-stock merger into Chaparral Energy at 0.2511 Chaparral shares per Edge share, with Edge's preferred swapped one-for-one, which would also take the private Chaparral public. CFO Michael Long departed the role the same day, with C.W. MacLeod stepping in as acting CFO.

business combination

The Smith Production acquisition closed on 31 January 2007, along with a 25% share of Smith's rights in the 95-square-mile Mission exploration area and 13 miles of gathering pipelines. Edge simultaneously replaced its credit facility with a $750 million Union Bank revolver carrying a $320 million borrowing base, repaid $129 million on the old line, and paid a $1.3 million fee for the bridge loan it ultimately did not need.

asset acquisition disposition

Nasdaq certified EDGE PETROLEUM CORP's securities for listing, clearing them to begin trading.

listing compliance notice

Edge funded the Smith purchase by selling equity rather than drawing the standby bridge loan: 10.9 million common shares plus 2.875 million shares of new 5.75% convertible preferred, both over-allotments taken up, alongside a planned $320 million revolver. Heavy dilution, but it avoided a $250 million second-lien bridge.

material agreement

Nasdaq certified EDGE PETROLEUM CORP's securities for listing, clearing them to begin trading.

listing compliance notice

Ahead of raising the money, Edge disclosed the scale of what it was taking on: its own proved reserves were about 102 Bcfe at end-2006, while the Smith assets it was buying for roughly $395 million held about 123 Bcfe. The company was paying to more than double itself in a single step.

material agreement

Edge's borrowing base was lifted twice in a month - to $125 million on drilling results, then to $140 million on closing the Chapman Ranch buyout - and it drew $22 million on 27 December to pay for that deal, leaving just $11 million of headroom weeks before committing $395 million to Smith Production.

debt financing

The Smith Production purchase was enlarged rather than terminated: Smith re-acquired interests from its own partners and passed them on, lifting Edge from 72 to 84 net wells and its average working interest from about 50% to 60% for a further $65 million.

material agreement

Edge agreed to buy out Kerr-McGee (by then part of Anadarko) from Chapman Ranch, doubling its interest in the seven wells it had bought into in 2005, adding an 88% stake in two more and taking over as operator, for about $26.0 million.

material agreement

The deal that would define the rest of Edge's life: agreements to buy Smith Production's oil and gas properties across 13 southeast and south Texas counties - 143 gross wells producing about 31 MMcfe a day, 86% gas - with an $11.0 million deposit down. Union Bank of California committed to underwrite the whole price with a $500 million revolver plus $175 million bridge and $75 million second-lien term loans.

debt financing

Edge agreed to pay about $62.8 million for a 44-50% working interest in the Chapman Ranch field in Nueces County, Texas, buying assets from Pearl Energy and Cibola Explorations and the whole of Cinco Energy from a group including Yorktown Energy Partners. Funded from the credit line, with a further $5.2 million payable if the field wins a severance-tax break.

material agreement

A spreadsheet that failed to cancel out an intercompany capital-spending accrual forced Edge to restate its September 2004 quarter and correct its full-year 2004 figures. The dollar effect was small and actually raised reported profit, but management conceded a material weakness in its own accounting controls.

financial restatement

Edge paid Contango Oil & Gas $43.2 million cash for 38 non-operated producing wells in Jim Hogg County, south Texas - its biggest property purchase to that point, in what became its core area.

asset acquisition disposition

The Miller Exploration purchase closed on 4 December 2003, six months after it was agreed, with Miller becoming a wholly owned Edge subsidiary. Shareholders at the same meeting lifted the incentive-plan share reserve from 1.2 to 1.7 million shares.

asset acquisition disposition

Edge agreed to buy Miller Exploration in an all-stock deal worth about $12.7 million, with the exchange ratio collared between $4.70 and $5.00 per Edge share. Its first purchase of another listed company.

business combination