Houston-based Edge Petroleum Corp. has filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code. In an arrangement with a group its senior secured lenders, Edge Petroleum will sell substantially all of its assets to a third party.
The assets comprise all of the company's ownership interest in its direct and indirect subsidiaries, including Edge Petroleum Exploration Co., Miller Exploration Co., Edge Petroleum Operating Co. Inc., Edge Petroleum Production Co., and Miller Oil Corp.
To facilitate this sale, Edge Petroleum filed its proposed plan of reorganization and a motion to establish an auction process for the sale. PGP Gas Supply Pool No. 3 is expected to be selected and approved as the winning bid.
Pursuant to the agreement, the effective date for the sale is June 30, 2009 and the purchase price is $191 million subject to certain adjustments.
In addition, in certain events PGP will be entitled to a break-up fee in the amount of $6 million and an expense reimbursement of $500,000 in certain events if the contemplated transaction does not close or PGP is not the winning bidder in the auction.
The company has roughly $226.5 million of outstanding principal under its credit agreement.
