Chaparral Energy Announces Merger Agreement with Edge Petroleum (EPEX)

July 15, 2008 7:18 AM EDT

Chaparral Energy, Inc., a privately held company, and Edge Petroleum Corporation (Nasdaq: EPEX) jointly announced that they have entered into a definitive merger agreement that provides for Chaparral to acquire Edge in an all-stock transaction. Through the merger, Chaparral will become a publicly traded company.

Chaparral stockholders will own approximately 86% of the outstanding common stock of the combined company and Edge stockholders will own approximately 14% of the outstanding common stock of the combined company. The common stock of the combined company is expected to begin trading under the symbol "CPR'' once the transaction is closed, pending listing approval from the New York Stock Exchange. Edge common stockholders will receive 0.2511 shares of Chaparral common stock for each share of Edge common stock they own.

Simultaneous with the execution of the merger agreement, Magnetar Capital, a privately held investment firm, executed definitive documentation to provide a $150 million Series B convertible preferred investment. Magnetar and Post Oak Energy, through their existing relationship, worked together to complete the commitment. The Series B preferred stock will pay 6.5% annual cash dividend, or, in Chaparral's discretion, an 8.0% payable-in-kind dividend. The proceeds from this private placement will be used to reduce debt, fund the combined company's capital program and for general corporate purposes.

Edge Petroleum Corporation (Edge) is an independent oil and natural gas company engaged in the exploration, development, acquisition and production of crude oil and natural gas properties in the United States. [SM]

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