("Edge Petroleum Files For Bankruptcy With Plans To Sell Assets," which was published at 10:55 a.m. EDT, incorrectly reported on what day Edge Petroleum said PGP Gas Supply Pool No. 3 offered to buy its assets. A corrected version follows.)
By Kristina Doss Of DOW JONES DAILY BANKRUPTCY REVIEW
Edge Petroleum Corp. (EPEX) said Friday it has filed for bankruptcy protection with plans to sell its assets.
The Houston-based company said that PGP Gas Supply Pool No. 3 has offered to buy Edge Petroleum's ownership interest in its subsidiaries for $191 million, subject to adjustments.
Edge Petroleum asked the judge overseeing its bankruptcy case to let PGP Gas serve as the lead bidder at an auction. If it loses, the company wants PGP Gas to receive a $6 million break-up fee and be reimbursed for $500,000 in expenses if it loses the auction.
The company has also proposed to use the proceeds from the sale to help repay the $226.5 million it owes a group of lenders led by Union Bank of California NA - provided, however, that the lenders agree to share some of the sale proceeds with other creditors.
Edge Petroleum says it is unlikely there will be any value for shareholders, "even under the most optimistic of scenarios."
The company's proposal to sell its assets and use the proceeds to repay creditors is subject to bankruptcy court approval.
Edge Petroleum is an independent energy company engaged in the exploration, development, acquisition and production of natural gas, natural gas liquids and crude oil. The company's operations are focused onshore in the U.S., primarily in South and Southeast Texas, Southeast New Mexico, Mississippi, Arkansas and Louisiana
Faced with declining revenues and the need to address the Sept. 30 due date of its credit facility with the Union Bank group of lenders, the company filed for Chapter 11 protection on Monday.
Subsidiaries such as Edge Petroleum Production Co., Miller Oil Co. and Miller Exploration Co., also entered bankruptcy.
The company listed having between $100 million and $500 million in assets and debts in the same range in its bankruptcy petition.
Judge Richard S. Schmidt of the U.S. Bankruptcy Court in Corpus Christi, Texas, has been assigned to handle Edge Petroleum's bankruptcy proceedings. The case number is 09-20644.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)