Chaparral Energy to acquire Edge Petroleum

Chaparral Energy Inc. agreed to acquire Edge Petroleum Corp. in an all-stock transaction. The privately held Chaparral will become a public company in the process. Value of the transaction was not disclosed.

By OGJ editors
HOUSTON, July 15 -- Chaparral Energy Inc. agreed to acquire Edge Petroleum Corp. in an all-stock transaction. The privately held Chaparral will become a public company in the process. Value of the transaction was not disclosed.

The boards of both companies unanimously approved the transaction, which remains subject to Edge stockholders approval. Chaparral's stockholders have approved it.

Closing is expected during the fourth quarter. Following closing, Chaparral expects its board will consist of nine directors, at least two of which will have been Edge board members.

Chaparral stockholders will own 86% of outstanding common stock of the combined company, and Edge stockholders will own 14% of the outstanding common stock of the combined company.

Edge common stockholders will receive 0.2511 shares of Chaparral common stock for each share of Edge common stock they own. The merger is expected to be a tax-free transaction for existing Edge stockholders.

The resulting combined company will have estimated proved reserves of 1.15 tcf equivalent of gas as of Dec. 31, 2007. About 56 % of the reserves are crude oil, and 67% is proved.

Of the combined developed proved reserves, 66% are in the Midcontinent, 17% in the Gulf Coast, 10% in the Permian basin and 7% in other basins. Production for the first quarter of 2008 was 172 MMcfd equivalent.

Chaparral's headquarters will remain in Oklahoma City, and the company will use Edge's headquarters in Houston as a regional Gulf Coast office.

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