Chaparral Energy, Edge Petroleum terminate merger

By Lisa Kerner

Charlotte, N.C., Dec. 17 - Chaparral Energy, Inc. and Edge Petroleum Corp. mutually agreed to terminate their merger after concluding that not all of the closing conditions would be met by the Dec. 31 deadline.

According to Edge, it was doubtful the companies would be able to obtain sufficient debt and equity financing to complete the transaction and to operate as a combined company.

Edge, a Houston-based oil and natural gas company, agreed in July to be acquired by Chaparral in a deal that would have made Chaparral a publicly traded company.

The agreement called for Edge common stockholders to receive 0.2511 shares of Chaparral common stock for each share of Edge common stock they own, it was previously reported.

Edge said it is considering other strategic alternatives, including a possible sale or merger, the sale of assets or interests in assets and additional debt or equity financing.

While shareholders will no longer vote on the merger agreement, Edge will still reconvene its annual meeting on Dec. 29 for the purpose of voting on other matters, a company news release said.

Chaparral said it also terminated a July 14 stock purchase agreement with Magnetar Financial LLC for the sale of 1.5 million shares of Chaparral series B convertible preferred stock for a total of $150 million. Magnetar will pay Chaparral a $5 million termination payment, $1.5 million of which will be paid to Edge for reimbursement of some expenses.

Oklahoma City-based Chaparral is an oil and natural gas production and exploitation company.

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