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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 3, 2000
EDGE PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 76-0511037
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Texaco Heritage Plaza
1111 Bagby, Suite 2100
Houston, Texas 77002
(Address of principal executive offices)
(713) 654-8960
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
The Company, as one of three plaintiffs, has filed a lawsuit against
BNP Petroleum Corporation, Seiskin Interests, LTD, Pagenergy Company, LLC and
Gap Marketing Company, LLC, as defendants, in the 229th Judicial District
Court of Duval County, Texas, for fraud and breach of contract in connection
with an agreement between plaintiffs and defendants whereby the defendants
were obligated to drill a test well in an area known as the Slick Prospect in
Duval County, Texas. The allegations of the Company in this litigation are
that BNP gave the Company inaccurate and incomplete information on which the
Company relied in making its decision not to participate in the test well and
the prospect, resulting in the loss of the Company's interest in the lease,
the test well and four subsequent wells drilled in the prospect. The Company
seeks to enforce its approximate 23% interest in the prospect and seeks
damages or rescission, as well as costs and attorneys' fees. The case was
originally filed in Duval County, Texas on February 25, 2000.
In mid March, 2000, the defendants filed an original answer and
certain counterclaims against plaintiffs, seeking unspecified damages for
slander of title, tortious interference with business relations, bad-faith
litigation, and exemplary damages. The case proceeded to trial before the
Court (without a jury) on June 19, 2000. The trial is currently in recess
and is expected to resume by August 7, 2000. On July 3, 2000, the Company
became aware that on June 30, 2000, defendants filed a second amended answer
and counterclaim and certain supplemental responses to requests for
disclosure in which they stated that they were seeking damages in the amount
of $33.5 million by virtue of an alleged lost sale of the subject properties,
$17 million in alleged lost profits from other prospective contracts, and
unspecified incidental and consequential damages from the alleged wrongful
suspension of funds under their gas sales contract with the gas purchaser on
the properties, alleged damage to relationships with trade creditors and
financial institutions, including the inability to leverage the Slick
Prospect, and attorneys' fees at prevailing hourly rates in Duval County,
Texas incurred in defending against plaintiffs' claims and for 40% of any
aggregate recovery in prosecuting their counterclaims. The Company and the
other plaintiffs have filed motions objecting to the counterclaims on certain
procedural grounds, including failure to properly and timely file and serve
plaintiffs with copies of certain pleadings, the effect of which, if granted,
would be to establish grounds for dismissal of the counterclaims.
While the Company believes it has sufficient legal defenses to all of
the defendants' counterclaims and intends to vigorously defend itself in this
matter, there can be no assurance that the outcome of any portion of this
litigation will be favorable to the Company. An adverse outcome on the
counterclaims or related matters could have a material adverse effect on the
Company.
The Company has also alleged that BNP Petroleum Corporation, Seiskin
Interests, LTD and Pagenergy Company, LLC breached a contract with the
plaintiffs by obtaining oil and gas leases within an area restricted by that
contract. This breach of contract allegation is the subject of an additional
lawsuit by plaintiffs in the 165th District Court in Harris County, Texas.
The Company is seeking damages as a result of defendants' actions as well as
costs and attorneys' fees.
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Statements in this document, including but not limited to those
relating to the above-described litigation, its outcome, effects, timing and
any other statements that are not historical facts are forward-looking
statements that are based on current expectations. Although the Company
believes that its expectations are based on reasonable assumptions, it can
give no assurance that these expectations will prove correct. Important
factors that could cause actual results to differ materially from those in
the forward-looking statements include the outcome and timing of the
litigation, rulings by the court, timing and other factors described in the
Company's most recent Form 10-K and other filings with Securities and
Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EDGE PETROLEUM CORPORATION,
A DELAWARE CORPORATION
(REGISTRANT)
Date 7/19/00 /S/ John W. Elias
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John W. Elias
Chief Executive Officer and
Chairman of the Board
Date 7/19/00 /S/ Michael G. Long
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Michael G. Long
Senior Vice President and
Chief Financial Officer
