EDGE PETROLEUM CORP, 10-Q, 2000-05-15

EDGE PETROLEUM CORP
10-Q, 2000-05-15
CRUDE PETROLEUM & NATURAL GAS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2000

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from.............. to .............

Commission file number 0-22149

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)

Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X No___

Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.

Class Outstanding at May 12, 2000
------------ ---------------------------
Common Stock 9,182,023

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
<TABLE>
EDGE PETROLEUM CORPORATION

Consolidated Balance Sheets
- -----------------------------------------------------------------------------------------------------------------

March 31, December 31,
2000 1999
-------------- --------------
ASSETS (Unaudited)
<S> <C> <C>

CURRENT ASSETS:
Cash and cash equivalents ................... $ 1,724,563 $ 577,864
Accounts receivable, trade .................. 2,902,845 3,489,709
Accounts receivable, joint interest
owners, net of allowance of $163,000
at March 31, 2000 and December 31, 1999 ... 1,055,676 1,177,555
Accounts receivable, related parties ........ 42,610 59,951
Other current assets ........................ 151,300 161,558
----------- -----------
Total current assets 5,876,994 5,466,637
----------- -----------
PROPERTY AND EQUIPMENT, Net - full cost method
of accounting for oil and natural gas 45,319,045 45,976,007

INVESTMENT IN FRONTERA ......................... 3,867,233 3,867,233

OTHER ASSETS ................................... 7,788 7,788
----------- -----------
TOTAL ASSETS ................................... $55,071,060 $55,317,665
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable, trade ..................... $ 1,465,223 $ 1,332,760
Accrued liabilities ......................... 3,747,271 4,994,929
Accrued interest payable .................... 117,099 16,369
Current portion of long-term debt ........... 5,400,000 4,100,000
----------- -----------
Total current liabilities ...... 10,729,593 10,444,058
----------- -----------
LONG-TERM DEBT ................................. 1,800,000 2,700,000
----------- -----------
Total liabilities .............. 12,529,593 13,144,058
----------- -----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 5,000,000 shares
authorized; none issued and outstanding
Common stock, $.01 par value; 25,000,000 shares
authorized; 9,182,023 shares issued and
outstanding at March 31, 2000 and December
31, 1999 91,820 91,820
Additional paid-in capital .................. 55,223,901 55,223,901
Accumulated deficit ......................... (12,748,619) (13,107,890)
Unearned compensation - restricted stock .... (25,635) (34,224)
----------- -----------
Total stockholders' equity ..... 42,541,467 42,173,607
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .... $55,071,060 $55,317,665
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

2
<PAGE>
<TABLE>

EDGE PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
- --------------------------------------------------------------------------------

Three Months Ended
March 31,
------------------------------
2000 1999
<S> <C> <C>

OIL AND NATURAL GAS REVENUES ................... $ 3,810,921 $ 3,542,188

OPERATING EXPENSES:
Lifting costs ............................... 439,809 479,128
Severance and ad valorem taxes .............. 306,649 352,689
Depletion, depreciation and amortization .... 1,786,978 1,902,760
General and administrative expenses ......... 878,779 1,001,819
Unearned compensation expense ............... 8,589 83,976
----------- -----------
Total operating expenses ....... 3,420,804 3,820,372
----------- -----------
OPERATING INCOME (LOSS) ........................ 390,117 (278,184)

OTHER INCOME AND EXPENSE:
Interest income ............................. 13,233 11,022
Interest expense ............................ (44,079) (38,326)
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES .............. 359,271 (305,488)

INCOME TAX EXPENSE ............................. -- --
----------- -----------
NET INCOME (LOSS) .............................. $ 359,271 $ (305,488)
=========== ===========

BASIC EARNINGS (LOSS) PER SHARE: ............... $ 0.04 $ (0.04)
=========== ===========

DILUTED EARNINGS (LOSS) PER SHARE: ............. $ 0.04 $ (0.04)
=========== ===========
BASIC WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING ................... 9,182,023 7,758,667
=========== ===========
DILUTED WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING ................... 9,182,023 7,758,667
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

3
<PAGE>
<TABLE>

EDGE PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------

Unearned
Common Stock Additional Compensation - Total
-------------------------- Paid-in Accumulated Restricted Stockholders'
Shares Amount Capital Deficit Stock Equity
--------- -------- ----------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
JANUARY 1, 2000 ............. 9,182,023 $91,820 $55,223,901 $(13,107,890) $(34,224) $42,173,607

Unearned compensation expense 8,589 8,589

Net income .................. 359,271 359,271
--------- -------- ----------- ------------ ----------- -----------
BALANCE,
MARCH 31, 2000 .............. 9,182,023 $91,820 $55,223,901 $(12,748,619) $(25,635) $42,541,467
========= ======== =========== ============ =========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

4
<PAGE>

<TABLE>
EDGE PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
- -----------------------------------------------------------------------------------------------------------

Three Months Ended
March 31,
-------------- -------------
2000 1999
<S> <C> <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) .................................................... $ 359,271 $ (305,488)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depletion, depreciation and amortization .......................... 1,786,978 1,902,760
Unearned compensation expense ..................................... 8,589 83,976
Changes in assets and liabilities:
Accounts receivable, trade ........................................ 586,864 (1,060,588)
Accounts receivable, joint interest owners, net ................... 121,879 118,895
Accounts receivable, related parties .............................. 17,341 24,182
Other current assets .............................................. 10,258 33,418
Accounts payable, trade ........................................... 132,463 1,308,185
Accrued liabilities ............................................... (1,247,658) (295,223)
Accrued interest payable .......................................... 100,730 1,807
---------- ----------
Net cash provided by operating activities .............. 1,876,715 1,811,924
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Oil and natural gas property and equipment purchases ................. (1,713,427) (2,967,791)
Proceeds from the sale of oil and natural gas properties and prospects 583,411 1,648,717
Investment in Frontera ............................................... (5,626)
---------- ----------
Net cash used in investing activities .................. (1,130,016) (1,324,700)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (payments) on long-term debt ................................. 400,000 (500,000)
---------- ----------
Net cash provided by (used in) financing activities ..... 400,000 (500,000)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .................... 1,146,699 (12,776)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .......................... 577,864 272,428
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD ................................ $1,724,563 $ 259,652
========== ==========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for interest, net of amounts capitalized .................... $ 29,132 $ 38,305

</TABLE>

See accompanying notes to consolidated financial statements.

5
<PAGE>

EDGE PETROLEUM CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements included herein have been prepared by Edge
Petroleum Corporation, a Delaware corporation (the "Company"), without audit
pursuant to the rules and regulations of the Securities and Exchange Commission,
and reflect all adjustments which are, in the opinion of management, necessary
to present a fair statement of the results for the interim periods on a basis
consistent with the annual audited consolidated financial statements. All such
adjustments are of a normal recurring nature. The results of operations for the
interim periods are not necessarily indicative of the results to be expected for
an entire year. Certain information, accounting policies and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted pursuant to such
rules and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the Company's audited consolidated
financial statements included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1999.

Accounting Pronouncements

Derivatives - In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and hedging
activities that require an entity to recognize all derivatives as an asset or
liability measured at fair value. Depending on the intended use of the
derivatives, changes in its fair value will be reported in the period of change
as either a component of earnings or a component of other comprehensive income.

In June 1999, the Financial Accounting Standards Board issued SFAS No.
137,"Accounting for Derivative Instruments and Hedging Activities - Deferral of
the Effective Date of FASB Statement No. 133" ("SFAS No. 137"). SFAS No. 137
delays the effective date for implementation of SFAS No. 133 for one year making
SFAS No. 133 effective for all fiscal quarters of all fiscal years beginning
after June 15, 2000. Retroactive application to periods prior to adoption is not
allowed. The Company has not quantified the impact of adoption on its financial
statements or the date it intends to adopt.

2. LONG TERM DEBT

The Company is a party to a credit facility (the "Revolving Credit
Facility") with a bank. Borrowings under the Revolving Credit Facility are
limited by a borrowing base, as defined in the Revolving Credit Facility, and
bear interest at a rate equal to prime or LIBOR plus 1.75% to 2.25% depending
upon the level of borrowing base utilization. The Revolving Credit Facility is
secured by substantially all of the assets of the Company.

Each quarter, at the election of the Company or the bank, the borrowing
base under the Revolving Credit Facility can be redetermined. The borrowing base
is also subject to mandatory reductions, which are subject to revision each time
the borrowing base is redetermined. The borrowing base is currently required to
be reduced on the first day of each month by $450,000. At March 31, 2000, the
total reduction from the original borrowing base of $9 million was $1.8 million,
resulting in a borrowing base of $7.2 million at March 31, 2000. At March 31,
2000, the borrowings under this facility totaled $7.2 million with no remaining
borrowing base available for future borrowings. For the three months ended March
31,2000, the weighted average debt outstanding was $7.3 million, and the
weighted average interest rate was 8.4%. Subsequent to March 31, 2000, the
Company sold certain oil and natural gas properties (see Note 6). As a result of
the sale and the April 1, 2000 regularly scheduled monthly borrowing base
reduction, the borrowing base reduced to $6 million. A portion of the proceeds
from the sale were used to reduce outstanding debt to $6 million.

6
<PAGE>

The Revolving Credit Facility provides for certain restrictions, including
but not limited to, limitations on additional borrowings and issues of capital
stock, sales of its oil and natural gas properties or other collateral, engaging
in merger or consolidation transactions and prohibitions of dividends and
certain distributions of cash or properties and certain liens. The Revolving
Credit Facility also contains certain financial covenants. The Tangible Net
Worth Covenant requires that at the end of each quarter the Company's Tangible
Net Worth be at least 90% of the Company's actual tangible net worth as reported
at December 31, 1998 (or $33,260,720) plus 50% of positive net income and 100%
of other increases in equity for all fiscal quarters ending subsequent to
December 31, 1998. The Fixed Charge Covenant requires that at the end of each
quarter beginning June 30, 1999, the ratio of annualized EBITDA (as defined) to
the sum of annualized interest expense plus 50% of the quarter end loans
outstanding must be at least 1.25 to 1.00. At March 31, 2000 and December 31,
1999 the Company was in compliance with the above mentioned covenants.

3. EARNINGS PER SHARE

The Company accounts for earnings per share in accordance with Statement
of Financial Accounting Standards No. 128 - "Earnings per Share," ("SFAS No.
128") which establishes the requirements for presenting earnings per share
("EPS"). SFAS No. 128 requires the presentation of "basic" and "diluted" EPS on
the face of the income statement. Basic earnings per common share amounts are
calculated using the average number of common shares outstanding during each
period. Diluted earnings per share assumes the exercise of all stock options and
warrants, having exercise prices less than the average market price of the
common stock during the periods, using the treasury stock method. For the three
months ended March 31, 2000 and 1999 all common stock options and warrants were
anti-dilutive.

4. INCOME TAXES

The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109 - "Accounting for Income Taxes," ("SFAS
No. 109") which provides for an asset and liability approach in accounting for
income taxes. Under this approach, deferred tax assets and liabilities are
recognized based on anticipated future tax consequences, using currently enacted
tax laws, attributable to differences between financial statement carrying
amounts of assets and liabilities and their respective tax bases. Due to the
uncertainty as to whether the Company will be profitable in the future, an
allowance has been provided to offset the tax benefits of certain tax assets. No
income tax expense was recorded for the three months ended March 31, 2000 as the
Company has utilized the benefit of its net operating loss carryforwards to
offset current taxable income.

At March 31, 2000, the Company had cumulative net operating loss
carryforwards for federal income tax purposes of approximately $24.6 million
which will begin to expire in 2007. The net operating loss carryforwards assume
that certain items, primarily intangible drilling costs, have been written off
in the current year. However, the Company has not made a final determination if
an election will be made to capitalize all or part of these items for tax
purposes.

The differences between the statutory federal income taxes calculated
usinga federal tax rate of 35% and the Company's effective tax rate as of March
31, 2000 and 1999 are summarized as follows:

2000 1999
----------- -----------

Statutory federal income taxes ............. $ 125,745 $(106,921)
Permanent differences:
Expense not deductible for tax purposes 2,140 3,161

Change in valuation allowance .............. (127,885) 103,760
--------- ---------
Income tax (benefit) expense ............... $ -- $ --
========= =========

7
<PAGE>
5. EQUITY

The Company accounts for Stock Based Compensation in accordance with
Statement of Financial Accounting Standards No. 123 "Accounting for Stock Based
Compensation," ("SFAS No. 123"). Under SFAS No. 123, the Company is permitted to
either record expense for stock options and other employee compensation plans
based on their fair value at the date of grant or to continue to apply its
current accounting policy under Accounting Principles Board Opinion No. 25 ("APB
No.25") and recognize compensation expense, if any, based on the intrinsic value
of the equity instrument at the measurement date. The Company has elected to
continue following APB No. 25.

Effective May 21, 1999, the Company amended and restated its Incentive
Plan. In conjunction with those and other amendments of the Incentive Plan, the
Company exchanged, on a voluntary basis, 556,488 outstanding nonqualified stock
options of certain employees and Directors of the Company for 326,700 new common
stock options in replacement of those options. The exercise price of the
replacement options was $7.06, which represents the fair market value on the
date of grant. The replaced options have a ten-year term with 50% of the options
vesting immediately on the date of grant with the remaining 50% vesting on May
21, 2000. On May 21, 1999, the Company also issued 99,800 new ten-year common
stock options to employees, which vest 100% on May 21, 2001. The exercise price
of the new options was $7.06, which represents the fair market value on the date
of grant. On June 1, 1999 the Company issued 21,000 ten-year common stock
options to non-employee directors with an exercise price of $7.28 per share,
which represents the fair market value on date of grant, vesting 100% on June 1
2001.

In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions involving Stock
Compensation," an interpretation of APB No. 25. This Interpretation clarifies
the application of APB No. 25 for certain issues including (a) the definition of
"employee" for the purpose of applying APB No. 25, (b) the criteria for
determining whether a plan qualifies as noncompensatory, (c) the accounting
consequences of various modifications to the terms of previously fixed stock
options or awards and (d) the accounting for an exchange of stock compensation
awards in a business combination. This Interpretation is effective July 1, 2000,
but certain conclusions cover specific events occurring after December 15, 1998
or January 12, 2000. To the extent that this Interpretation covers events
occurring during the period after December 15, 1998 or January 12, 2000, but
before the effective date of July 1, 2000, the effects of applying this
Interpretation are recognized on a prospective basis from July 1, 2000. The
voluntary exchange and issuance of new common stock options in replacement of
those options, referred to above, which were effective May 21, 1999, will be
covered by this Interpretation as these transactions fall within the guidelines
of a specific event after December 15, 1998 as defined by the Interpretation.
Accordingly these new common stock options will be accounted for under variable
plan accounting on a prospective basis from July 1, 2000, resulting in an effect
on the Company's results of operations for increases in the stock price above
the exercise price of the option or the stock price at July 1, 2000, whichever
is greater.

6. PROPERTY DISPOSITION

Subsequent to March 31, 2000, the Company completed the sale of its
working interests owned in its Wheeler property in Starr County, Texas. Proceeds
from the sale were approximately $1 million and associated net proved reserves
were approximately 550 MMcfe or 2% of the Company's total proved reserves, at
the time of the sale.

The Company uses the full-cost method of accounting for its oil and
natural gas properties. Under this method, a sale of oil and natural gas
properties, whether or not being amortized currently, shall be accounted for as
an adjustment of capitalized costs, with no gain or loss recognized unless such
adjustment would significantly alter the relationship between capitalized costs
and proved reserves. The proceeds from the sale of these proved producing
properties were credited directly to the full cost pool.

8
<PAGE>

7. HEDGING ACTIVITIES

Due to the instability of oil and natural gas prices, the Company enters
into, from time to time, price risk management transactions (e.g., swaps and
collars) for a portion of it's oil and natural gas production in order to
achieve a more predictable cash flow, as well as to reduce exposure from price
fluctuations. While the use of these arrangements limits the benefit to the
Company of increases in the price of oil and natural gas it also limits the
downside risk of adverse price movements. The Company's hedging arrangements
typically apply to only a portion of its production, providing only partial
price protection against declines in oil and natural gas prices and limiting
potential gains from future increases in prices. The Company accounts for these
transactions as hedging activities and, accordingly, gains and losses are
included in oil and natural gas revenues during the period the hedged production
occurs.

The impact on oil and natural gas revenues from hedging activities for
the three months ended March 31, 2000 and 1999 was as follows:

<TABLE>
Gain (Loss)
Bbl MMbtu ----------------------
Hedge Effective Dates Price Per Price Per Volumes Volumes Three Months Ended
Type ....... Beginning Ending Barrel MMbtu Per Day Per Day March 31,
- ------------------ --------- -------- --------- ----------- ------- ------- ---------- -----------
2000 1999
---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Natural Gas Swap ..... 3/1/99 10/31/99 $ 1.957 13,000 $ 142,346
Natural Gas Collar ... 2/1/00 2/29/00 $2.20-$2.31 9,000 $ (70,470)
Natural Gas Collar ... 3/1/00 4/30/00 $2.20-$2.50 9,000 (27,900)
Oil Swap ............. 1/1/00 3/31/00 $25.60 150 (27,521)
--------- ---------
Total ............ $(125,891) $ 142,346
========= =========
</TABLE>

The Company's hedging activities for natural gas are entered into on a
per MMbtu delivered price basis, Houston Ship Channel, with settlement for each
calendar month occurring five business days following the publishing of the
Inside F.E.R.C. Gas Marketing Report.

Included within oil and natural gas revenues or the three months ended
March 31, 2000 and 1999 was $(125,891), and $142,346, respectively, representing
net (losses) and gains from hedging activity. During December 1999, the Company
entered into a crude oil fixed price swap. The number of barrels of oil per day
("BOD") and the related fixed price subject to the oil price swap are as
follows: i) January 1, 2000 - March 31, 2000, 150 BOD, swap at $25.60, ii) April
1, 2000 - June 30, 2000, 125 BOD, swap at $22.87, iii) July 1, 2000 - September
30, 2000, 60 BOD, swap at $21.47, and iv) October 1, 2000 - December 31, 2000,
50 BOD, swap at $ 20.46. During the first quarter of 2000 the Company entered
into three natural gas collars. The natural gas collars cover the following
MMbtu per day and floor and ceiling per MMbtu prices: i) February 1, 2000 -
February 29, 2000, 9,000 MMbtu per day, $2.20 floor - $2.31 ceiling, ii) March
1, 2000 - April 30, 2000, 9,000 MMbtu per day, $2.20 floor - $2.50 ceiling and
iii) May 1, 2000 - September 30, 2000, 6,000 MMbtu per day, $2.05 floor - $2.60
ceiling. At March 31, 2000 and December 31, 1999, the market value of
outstanding hedges was approximately $(620,000) and $15,000, respectively.

9
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following is management's discussion and analysis of certain
significant factors that have affected certain aspects of the Company's
financial position and operating results during the periods included in the
accompanying unaudited condensed consolidated financial statements. This
discussion should be read in conjunction with the accompanying unaudited
condensed consolidated financial statements included elsewhere in this Form 10-Q
and with the Company's audited consolidated financial statements included in the
Company's annual report on Form 10-K for the year ended December 31, 1999.
Unless otherwise indicated by the context, references herein to the "Company"
mean Edge Petroleum Corporation, a Delaware corporation that is the registrant,
and its subsidiaries.

Overview

Edge Petroleum Corporation is an independent energy company engaged in the
exploration, development and production of oil and natural gas. Edge conducts
its operations primarily along the onshore Gulf Coast with its primary emphasis
in South Texas and South Louisiana where it currently controls interests in
excess of 88,000 gross acres under lease and option. The Company explores for
oil and natural gas by emphasizing an integrated application of highly advanced
data visualization techniques and computerized 3-D seismic data analysis to
identify potential hydrocarbon accumulations. The Company believes its approach
to processing and analyzing geophysical data differentiates it from other
independent exploration and production companies and is more effective than
conventional 3-D seismic data interpretation methods. The Company also believes
it maintains one of the largest databases of onshore South Texas Gulf Coast 3-D
seismic data of any independent oil and natural gas company, and is continuously
acquiring additional data within this core region.

The Company acquires 3-D seismic data by organizing and designing regional
data acquisition surveys for its proprietary use, as well as through selective
participation in regional non-proprietary 3-D surveys. The Company negotiates
seismic options for a majority of the areas encompassed by its proprietary
surveys, thereby allowing it to secure identified prospect leasehold interests
on a non-competitive, pre-arranged basis. In the Company's non-proprietary 3-D
survey areas, the Company's technical capabilities allow it to rapidly and
comprehensively evaluate large volumes of regional 3-D seismic data,
facilitating its ability to identify attractive prospects within a surveyed
region and to secure the corresponding leasehold interests ahead of other
industry participants.

The Company's extensive technical expertise has enabled it to internally
generate substantially all of its 3-D prospects drilled to date and to assemble
a large portfolio of 3-D based prospects for future drilling. The Company
pursues drilling opportunities that include a blend of shallower, normally
pressured reservoirs that generally involve moderate costs and risks as well as
deeper, over-pressured reservoirs that generally involve greater costs and
risks, but have higher economic potential. In recent years, the Company has
expanded its relative focus to increase its exposure to exploration
opportunities in the deeper geological section. The Company mitigates its
exposure to exploration costs and risk by conducting its operations with
industry partners, including major oil companies and large independents, that
generally pay a disproportionately greater share of seismic acquisition and, in
many instances, leasing and drilling costs than the Company. The Company may
seek to participate in an increased number of externally generated prospects,
including those in which the Company pays a disproportionate share of the cost,
depending upon the quality, size, price and other factors relating to such
prospects.

The Company uses the full-cost method of accounting for its oil and
natural gas properties. Under this method, all acquisition, exploration and
development costs, including certain general and administrative costs that are
directly attributable to the Company's acquisition, exploration and development
activities, are capitalized in a "full-cost pool" as incurred. The Company
capitalizes internal Geological and Geophysical ("G&G") costs that are directly
attributable to acquisition, exploration and development activities to oil and
natural gas properties. Total internal G&G costs capitalized during the three
months ended March 31, 2000 and 1999 were $413,430 and $563,592, respectively.
The Company records depletion of its full-cost pool using the unit of production
method. Investments in unproved properties are not subject to amortization until
the proved reserves associated with the projects can be determined or until
impaired. To the extent that capitalized costs subject to amortization in the
full-cost pool (net of depletion, depreciation and amortization and related
deferred taxes) exceed the present value (using a 10%discount

10
<PAGE>

rate) of estimated future net after-tax cash flows from proved oil and
natural gas reserves, such excess costs are charged to operations. Once
incurred, an impairment of oil and natural gas properties is not reversible at a
later date. Impairment of oil and natural gas properties is assessed on a
quarterly basis in conjunction with the Company's quarterly filings with the
Securities and Exchange Commission. At March 31, 2000, no full cost ceiling test
write down of oil and natural gas properties was necessary.

Due to the instability of oil and natural gas prices, the Company enters
into, from time to time, price risk management transactions (e.g., swaps and
collars) for a portion of its oil and natural gas production to achieve a more
predictable cash flow, as well as to reduce exposure from price fluctuations.
While the use of these arrangements limits the benefit to the Company of
increases in the price of oil and natural gas it also limits the downside risk
of adverse price movements. The Company's hedging arrangements typically apply
to only a portion of its production, providing only partial price protection
against declines in oil and natural gas prices and limiting potential gains from
future increases in prices. The Company accounts for these transactions as
hedging activities and, accordingly, gains and losses are included in oil and
natural gas revenues during the period the hedged production occurs. At March
31, 2000 the market value of all hedges was approximately $(620,000). See Note
7 for "Hedging Activities".

The Company's revenue, profitability and future rate of growth and ability
to borrow funds or obtain additional capital, and the carrying value of its
properties, are substantially dependent upon prevailing prices for oil and
natural gas. These prices are dependent upon numerous factors beyond the
Company's control, such as economic, political and regulatory developments and
competition from other sources of energy. Even though oil and natural gas
commodity prices have shown signs of recent recovery, a substantial or extended
decline in oil and natural gas prices could have a material adverse effect on
the Company's financial condition, results of operation and access to capital,
as well as the quantities of oil and natural gas reserves that the Company may
economically produce.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2000 Compared to the Three Months Ended
March 31, 1999

Revenue and Production

Oil and natural gas revenues for the three months ended March 31, 2000
increased 8% from $3,542,188 to $3,810,921, as compared to the three months
ended March 31, 1999. Production volumes for oil, condensate and NGLs for the
three months ended March 31, 2000 increased 31% from 37 MBbls to 49 MBbls, as
compared to the three months ended March 31, 1999. The increase in oil,
condensate and NGL production during the three months ended March 31, 2000
increased revenues by $116,786 (based on 1999 comparable quarter average
prices), further increased by a 109% increase in the average oil, condensate and
NGL sales price which increased revenues by $534,935 (based on current quarter
production). Production volumes for natural gas for the three months ended March
31, 2000, decreased 34% from 1,668 MMcf to 1,096 MMcf, as compared to the three
months ended March 31, 1999. The decrease in natural gas production during the
three months ended March 31, 2000 decreased revenues by $1.1 million, offset by
a 34% increase in the average natural gas sales price which increased revenues
by $702,381. The decrease in production volumes was primarily attributable to
the disposition of certain proved producing properties effective July 1, 1999,
further reduced by normal production declines from existing wells offset by 9
gross (3.63 net) new successful exploratory and development wells being drilled
and completed since March 31, 1999. Included within oil, condensate and NGL
revenues for the three months ended March 31, 2000 was ($27,521) representing
losses from hedging activities. Hedging activities decreased the effective oil,
condensate and NGL average sales price by approximately $0.56 per Bbl (or 3%)
for the three months ended March 31, 2000. Included within natural gas revenues
for the three months ended March 31, 2000 was $(98,370) representing losses from
hedging activities. Hedging activities decreased the effective natural gas sales
price by approximately $0.09 per Mcf (or 3%) for the three-months ended March
31, 2000. Included within natural gas revenues for the three months ended March
31, 1999 was $142,346 representing gains from hedging activities. Hedging
activities increased the effective natural gas sales price by approximately
$0.09 per Mcf (or 5%) for the three-months ended March 31, 1999. See Note 7 for
"Hedging Activities".

11
<PAGE>

The following table sets forth certain operational data of the Company
for the periods presented:

<TABLE>
Three Months Ended 2000 Period Compared
March 31, to 1999 Period
------------------------ ------------------------
Increase % Increase
2000 1999 (Decrease) (Decrease)
<S> .......................................<C> <C> <C> <C>
Production volumes:
Oil, condensate and NGLs (Bbls) ....... 49,029 37,410 11,619 31 %
Natural gas (Mcf) ..................... 1,096,366 1,668,243 (571,877) (34)%

Natural gas equivalents (Mcfe) ........ 1,390,540 1,892,703 (502,163) (27)%

Average sales prices:
Oil, condensate and NGLs ($ per Bbl) .. $ 20.96 $ 10.05 $ 10.91 109 %
Natural gas ($ per Mcf) ............... 2.54 1.90 0.64 34 %
Natural gas equivalent ($ per Mcfe) ... 2.74 1.87 0.87 47 %

Operating revenues:
Oil, condensate and NGLs .............. $1,027,740 $ 376,019 $ 651,721 173 %
Natural gas ........................... 2,783,181 3,166,169 (382,988) (12)%
---------- ---------- ----------
Total ........................... $3,810,921 $3,542,188 $ 268,733 8 %
========== ========== ==========
</TABLE>

Costs and Operating Expenses

Lifting costs for the three months ended March 31, 2000 decreased 8% from
$479,128 to $439,809 as compared to the three months ended March 31, 1999 due
primarily to the disposition of proved producing properties effective July 1,
1999, and due to a corporate focus to improve the operating structure in the
field. Lifting costs were $0.32 per Mcfe and $0.25 per Mcfe for the three-month
periods ended March 31, 2000 and 1999, respectively. The increase in lifting
costs on a Mcfe basis was due to reduced production volumes attributable the
sale of certain properties during the third quarter of 1999 which had lower
overall average lifting costs.

Severance and ad valorem taxes for the three months ended March 31, 2000
decreased 13% from $352,689 to $306,649 as compared to the three months ended
March 31, 1999 due primarily to higher ad valorem taxes paid during the first
quarter of 1999. Severance and ad valorem taxes were $0.22 per Mcfe and $0.19
per Mcfe for the three-month periods ended March 31, 2000 and 1999,
respectively.

Depletion, depreciation and amortization expense ("DD&A") for the three
months ended March 31, 2000 decreased 6% from $1,902,760 to $1,786,978, as
compared to the three months ended March 31, 1999. Included within DD&A for the
three-month periods ended March 31, 2000 and 1999 was $1,617,409 and $1,708,374,
respectively, representing depletion expense of oil and natural gas property,
which decreased by 5%. Decreased oil and natural gas production decreased
depletion expense by $453,370 and a 29% increase in the overall depletion rate
increased depletion expense by $362,405. The increase in the depletion rate was
primarily attributable to the abandonment of certain properties during the
fourth quarter of 1999. Depletion expense on a unit of production basis for the
three-month periods ended March 31, 2000 and 1999 was $1.16 per Mcfe and $0.90
per Mcfe, respectively. The remaining decrease in DD&A is due primarily to the
amortization of deferred loan cost on the Revolving Credit Facility on which
amortization began April 1, 1998 and was fully amortized at March 31, 1999.

General and administrative expenses ("G&A") for the three months ended
March 31, 2000 decreased 12% from $1,001,819 to $878,779, as compared to the
three months ended March 31, 1999. The decrease in G&A was primarily
attributable to lower salaries and related benefits attributable to a work force
reduction during January 2000. Overhead reimbursement fees are recorded as a
reduction to G&A and were approximately $12,000 and $54,000, respectively, for
the three months ended March 31, 2000 and 1999. G&A on a unit of production
basis for the three-month periods ended March 31, 2000 and 1999 was $0.63 per
Mcfe and $0.53 per Mcfe, respectively.

Unearned compensation expense for the three months ended March 31, 2000
decreased from $83,976 to $8,589,as compared to the three months ended March 31,
1999. The decrease is due to the resignation of the former

12
<PAGE>

President and Chief Operating Officer during December 1999 whereby he vested in
his remaining restricted stock grant. The Company charged to expense his
unamortized unearned compensation upon his resignation, thereby reducing the
future amounts to be charged to income.

Interest expense for the three months ended March 31, 2000 was $44,079 as
compared to $38,326 for the three months ended March 31, 1999. The total amount
of interest capitalized to oil and natural gas properties during the three-month
periods ended March 31, 2000 and 1999 was $131,002 and $225,597, respectively.
The increase in interest expense is due to less interest being capitalized to
oil and natural gas properties resulting from lower exploration activities
during the three months ended March 31, 2000 compared to the three months ended
March 31, 1999. Weighted average debt was $7.3 million for the three months
ended March 31, 2000 compared to $12.8 million for the three months ended March
31, 1999.

Interest income for the three months ended March 31, 2000 increased from
$11,022 to $13,233, as compared to the three months ended March 31, 1999. The
increase in interest income is due to the overall increase in invested overnight
money market funds.

Due to the Company's significant deferred tax assets, no tax expense
(benefit) was recorded for the three months ended March 31, 2000 and 1999. Due
to the uncertainty as to whether the Company will be profitable in the future,
an allowance has been provided to offset the tax benefits of certain tax assets.
Should the Company continue to have net income in future periods, income tax
expense will be recorded upon utilization of available tax assets.

For the three months ended March 31, 2000, the Company had operating
income of $390,117 compared to an operating loss of $(278,184) for the three
month period ended March 31, 1999, primarily the result of an increase in oil
and natural gas revenues as well as the impact of lower DD&A and G&A. Net income
was $359,271 for the three months ended March 31, 2000 compared to a net loss of
$(305,488) for the three-month period ended March 31, 1999.

LIQUIDITY AND CAPITAL RESOURCES

The Company had cash and cash equivalents at March 31, 2000 of $1,724,563
consisting primarily of short-term money market investments, as compared to
$577,864 at December 31, 1999. Working capital (deficit) was $(4,852,599) at
March 31, 2000, as compared to $(4,977,421) at December 31, 1999.

Cash flows provided by operations were $1,876,715 and 1,811,924 for the
three months ended March 31, 2000 and 1999, respectively. The slight increase in
cash flows provided by operations for the three months ended March 31, 2000 is
primarily due to net income in the current year as compared to a net loss in the
prior year and a decrease in accounts receivable for the three months ended
March 31, 2000 as compared to an increase in the comparable prior year period,
offset by a significant amount of payments of accrued liabilities during the
three months ended March 31, 2000. Operating cash flows, before changes in
working capital, were $2,154,838 and $1,681,248 for the three months ended March
31, 2000 and 1999, respectively. Higher cash flows during the three months ended
March 31, 2000 as compared to the three months ended March 31, 1999 were due to
higher oil and natural gas revenues and lower G&A. Higher oil and natural gas
revenues during the three months ended March 31, 2000 were due to higher
commodity prices offset by decreased production. Operating cash flow should not
be considered in isolation or as a substitute for net income, operating income,
cash flows from operating activities or any other measure of financial
performance presented in accordance with generally accepted accounting
principles or as a measure of profitability or liquidity.

During the three months ended March 31, 2000, the Company continued to
reinvest a substantial portion of its cash flows to increase its 3-D project
portfolio, improve its 3-D seismic interpretation technology and fund its
drilling program. Capital expenditures during the three months ended March 31,
2000 were approximately $1.7 million as compared to $3 million during the same
period in 1999. The Company expended $1.2 million in its drilling operations
resulting in the drilling of 4 gross (1.6 net) wells during the three months
ended March 31, 2000 as compared to 6 gross (2.53 net) wells during the same
period in 1999. The Company currently has two wells drilling, the Swickheimer
well in Goliad County, Texas which spud on April 7, 2000 and the Robertson #1
well in Aadia Parish, Louisiana which spud on April 27, 2000. The remaining cost
capitalized to oil and natural gas properties was

13
<PAGE>

capitalized internal G&G and interest of approximately $544,000. Total capital
expenditures for 2000 are expected to be approximately $9 million.

Due to the Company's active exploration and development and technology
enhancement programs, the Company has experienced and expects to continue to
experience substantial working capital requirements. The Company intends to fund
its 2000 capital expenditures, commitments and working capital requirements
through cash flows from operations, available borrowings under its existing
Revolving Credit Facility, and to the extent necessary other financing
activities. At March 31, 2000, the Company had no remaining amount available for
future borrowings under its Revolving Credit Facility and the borrowing base is
being reduced by $450,000 per month. To provide additional working capital the
Company continues to market a portion of its interest in various Company
generated drill ready prospects. Additionally, the Company is currently
evaluating various financing and refinancing options as well as divestitures of
certain non-core and under performing assets. The Company believes it will be
able to generate capital resources and liquidity sufficient to fund its capital
expenditures and meet such financial obligations as they come due. In the event
such capital resources are not available to the Company, its drilling and other
activities may be curtailed.

Revolving Credit Facility

Each quarter, at the election of the Company or the bank, the borrowing
base under the Revolving Credit Facility can be redetermined. The borrowing base
is also subject to mandatory reductions, which are subject to revision each time
the borrowing base is redetermined. The borrowing base is currently required to
be reduced on the first day of each month by $450,000. At March 31, 2000, the
total reduction from the original borrowing base of $9 million was $1.8 million,
resulting in a borrowing base of $7.2 million at March 31, 2000. At March 31,
2000, the borrowings under this facility totaled $7.2 million with no remaining
borrowing base available for future borrowings. For the three months ended March
31,2000, the weighted average debt outstanding was $7.3 million, and the
weighted average interest rate was 8.4%. Subsequent to March 31, 2000, the
Company sold certain oil and natural gas properties. As a result of the sale and
the April 1, 2000 regularly scheduled monthly borrowing base reduction, the
borrowing base reduced to $6 million. A portion of the proceeds from the sale
were used to reduce outstanding debt to $6 million.

Accounting Pronouncements

14
<PAGE>

In June 1999, the Financial Accounting Standards Board issued SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133" ("SFAS No. 137"). SFAS No. 137 delays
the effective date for implementation of SFAS No. 133 for one year making SFAS
No. 133 effective for all fiscal quarters of all fiscal years beginning after
June 15, 2000. Retroactive application to periods prior to adoption is not
allowed. The Company has not quantified the impact of adoption on its financial
statements or the date it intends to adopt.

In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions involving Stock
Compensation," an interpretation of APB No. 25. This Interpretation clarifies
the application of APB No. 25 for certain issues including (a) the definition of
"employee" for the purpose of applying APB No. 25, (b) the criteria for
determining whether a plan qualifies as noncompensatory, (c) the accounting
consequences of various modifications to the terms of previously fixed stock
options or awards and (d) the accounting for an exchange of stock compensation
awards in a business combination. This Interpretation is effective July 1, 2000,
but certain conclusions cover specific events occurring after December 15, 1998
or January 12, 2000. To the extent that this Interpretation covers events
occurring during the period after December 15, 1998 or January 12, 2000, but
before the effective date of July 1, 2000, the effects of applying this
Interpretation are recognized on a prospective basis from July 1, 2000. The
voluntary exchange and issuance of new common stock options in replacement of
those options, referred to in Note 5, which were effective May 21, 1999, will be
covered by this Interpretation as these transactions fall within the guidelines
of a specific event after December 15, 1998 as defined by the Interpretation.
Accordingly these new common stock options will be accounted for under variable
plan accounting on a prospective basis from July 1, 2000, resulting in an effect
on the Company's results of operations for increases in the stock price above
the exercise price of the option or the stock price at July 1, 2000, whichever
is greater.

FORWARD LOOKING STATEMENTS

The statements contained in all parts of this document, including, but not
limited to, those relating to the Company's drilling plans, its 3-D project
portfolio, capital expenditures, future capabilities, the sufficiency of capital
resources and liquidity to support working capital and capital expenditure
requirements, reinvestment of cash flows and any other statements regarding
future operations, financial results, business plans, sources of liquidity and
cash needs and other statements that are not historical facts are forward
looking statements. When used in this document, the words "anticipate,"
"estimate," "expect," "may," "project," "believe" and similar expressions are
intended to be among the statements that identify forward looking statements.
Such statements involve risks and uncertainties, including, but not limited to,
those relating to the Company's dependence on its exploratory drilling
activities, the volatility of oil and natural gas prices, the need to replace
reserves depleted by production, operating risks of oil and natural gas
operations, the Company's dependence on its key personnel, the Company's
reliance on technological development and possible obsolescence of the
technology currently used by the Company, significant capital requirements of
the Company's exploration and development and technology development programs,
the potential impact of government regulations, litigation and environmental
matters, the Company's ability to manage its growth and achieve its business
strategy, competition, the uncertainty of reserve information and future net
revenue estimates, property acquisition risks and other factors detailed in the
Company's Form 10-K and other filings with the Securities and Exchange
Commission. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual outcomes may vary
materially from those indicated.

15
<PAGE>

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

The Company is exposed to market risk from changes in interest rates and
commodity prices. The Company uses a Revolving Credit Facility, which has a
floating interest rate, to finance a portion of its operations. The Company is
not subject to fair value risk resulting from changes in its floating interest
rates. The use of floating rate debt instruments provides a benefit due to
downward interest rate movements but does not limit the Company to exposure from
future increases in interest rates. Based on the March 31, 2000 floating
interest rate of 8.5%, a 10% change in the interest rate would result in an
increase or decrease in interest expense of approximately $51,000 on an annual
basis. In the normal course of business the Company enters into hedging
transactions, including commodity price collars and swaps, to mitigate its
exposure to commodity price movements, but not for trading or speculative
purposes. During the three months ended March 31, 2000, due to the instability
of oil prices and to achieve a more predictable cash flow, the Company had in
place a fixed price oil swap for a portion of its year 2000 oil and condensate
production. While the use of these arrangements limits the benefit to the
Company of increases in the price of oil and natural gas it also limits the
downside risk of adverse price movements. The number of barrels of oil per day
("BOD") and the related fixed price subject to the oil price swap are as
follows: i) January 1, 2000 - March 31, 2000, 150 BOD, swap at $25.60, ii) April
1, 2000 - June 30, 2000, 125 BOD, swap at $22.87, iii) July 1, 2000 - September
30, 2000, 60 BOD, swap at $21.47 and iv) October 1, 2000 - December 31, 2000, 50
BOD, swap at $ 20.46. A 10% change in the oil price per barrel would cause the
total market value of the swap to increase or decrease by approximately $47,000.
During the three months ended March 31, 2000, due to the instability of natural
gas prices and to achieve a more predictable cash flow, the Company had in place
three natural gas collars for a portion of its year 2000 natural gas production.
The natural gas collars cover the following MMbtu per day and floor and ceiling
per MMbtu prices: i) February 1, 2000 - February 29, 2000, 9,000 MMbtu per day,
$2.20 floor - $2.31 ceiling, ii) March 1, 2000 - April 30, 2000, 9,000 MMbtu per
day, $2.20 floor - $2.50 ceiling and iii) May 1, 2000 - September 30, 2000,
6,000 MMbtu per day, $2.05 floor - $2.60 ceiling. A 10% change in the natural
gas price per MMbtu would cause the total market value of the natural gas
collars to increase or decrease by approximately $309,000. At March 31, 2000,
the market value of the outstanding hedges were approximately $(620,000).

<PAGE>

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings............................................... None

Item 2 - Changes in Securities and Use of Proceeds...................... None

Item 3 - Defaults Upon Senior Securities................................. None

Item 4 - Submission of Matters to a Vote of Security Holders ............ None

Item 5 - Other Information............................................... None

Item 6 - Exhibits and Reports on Form 8-K................................ None

(A)......EXHIBITS. The following exhibits are filed as part of this report:

INDEX TO EXHIBITS
Exhibit No.
- --------------

+2.1 -- Amended and Restated Combination Agreement by and among
(i) Edge Group II Limited Partnership, (ii) Gulfedge Limited
Partnership, (iii) Edge Group Partnership,(iv) Edge Petroleum
Corporation, (v) Edge Mergeco, Inc. and (vi) the Company,
dated as of January 13, 1997 (Incorporated by reference
from exhibit 2.1 to the Company's Registration Statement
on Form S-4 (Registration No. 333-17269))

+3.1 -- Restated Certificate of Incorporated of the Company as
amended (Incorporated by reference from exhibit 3.1 to the
Company's Registration Statement on Form S-4 (Registration No.
333-17269)).

+3.2 -- Bylaws of the Company. (Incorporated by Reference from
exhibit 3.3 to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 1999).

+3.3 -- First Amendment to Bylaws of the Company on September 28,
1999 (Incorporated by Reference from exhibit 3.2 to the
Company's Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 1999).

+4.1 -- Amended and Restated Credit Agreement, dated April 1, 1998,
by and between Edge Petroleum Corporation and Edge Petroleum
Exploration Company (collectively the "Borrower") and Compass
Bank, a Texas state chartered banking institution, as Agent
for itself and First National Bank of Chicago and other
lenders party thereto. (Incorporated by Reference from exhibit
4.1 to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1998).

+4.2 -- First Amendment dated September 29, 1998 to the Amended and
Restated Credit Agreement, dated as of April 1, 1998, by and
between the Borrower and the First National Bank of Chicago as
agent and a Lender thereto (Incorporated by Reference from
exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1998).

+4.3 -- Security Agreement, dated as of April 1, 1998, by and
between the Borrower and Compass Bank, a Texas state chartered
banking institution, as Agent for itself and The First
National Bank of Chicago and other lenders party thereto the
Credit Agreement (Incorporated by Reference from exhibit 4.1
to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1998).

17
<PAGE>

+4.4 -- Security Agreement (Stock Pledge), dated as of April 1,
1998, by and between Edge Petroleum Corporation and Compass
Bank, a Texas state chartered banking institution, as Agent
for itself and The First National Bank of Chicago and other
lenders party thereto the Credit Agreement (Incorporated by
Reference from exhibit 4.1 to the Company's Quarterly Report
on Form 10-Q for the quarterly period ended March 31, 1998).

-- The Company is a party to several debt instruments under
which the total amount of securities authorized does not
exceed 10% of the total assets of the Company and its
subsidiaries on a consolidated basis. Pursuant to paragraph
4(iii)(A) of Item 601(b) of Regulation S-K, the Company agrees
to furnish a copy of such instruments to the Commission upon
request.

+4.5 -- Common Stock Subscription Agreement dated as of April 30,
1999 between the Company and the purchasers named therein
(Incorporated by reference from exhibit 4.5 to the Company's
Quarterly Report on Form 10-Q/A for the quarter ended March
31, 1999).

+4.6 -- Warrant agreement dated as of May 6, 1999 between the
Company and the Warrant holders named therein (Included in and
incorporated by reference from exhibit 4.5 to the Company's
Quarterly Report on Form 10-Q/A for the quarter ended March
31, 1999).

+4.7 -- Form of Warrant for the purchase of the Common Stock
(Included in and incorporated by reference from the Common
Stock Subscription Agreement from exhibit 4.5 to the Company's
Quarterly Report on Form 10-Q/A for the quarter ended March
31, 1999).

+10.1 -- Joint Venture Agreement between Edge Joint Venture II and
Essex Royalty Limited Partnership II, dated as of May 10, 1994
(Incorporated by reference from exhibit 10.2 to the Company's
Registration Statement on Form S-4 (Registration No.
333-17269)).

+10.2 -- Joint Venture Agreement between Edge Joint Venture II and
Essex Royalty Limited Partnership, dated as of April 11, 1992
Incorporated by reference from exhibit 10.3 to the Company's
Registration Statement on Form S-4 (Registration No.
333-17269)).

+10.3 -- Form of Indemnification Agreement between the Company and
each of its directors (Incorporated by reference from exhibit
10.7 to the Company's Registration Statement on Form S-4
(Registration No. 333-17269)).

+10.4 -- Consulting Agreement of James C. Calaway dated March 18,
1989 (Incorporated by reference from exhibit 10.12 to the
Company's Registration Statement on Form S-4 (Registration No.
333-17269)).

+10.5 -- Stock Option Plan of Edge Petroleum Corporation, a Texas
corporation (Incorporated by reference from exhibit 10.13
to the Company's Registration Statement on Form S-4
(Registration No. 333-17269)).

+10.6 -- Employment Agreement dated as of November 16, 1998,
by and between the Company and John W. Elias. (Incorporated
by reference from 10.12 to the Company's Annual Report on Form
10-K for the year ended December 31, 1998).

+10.7 -- Agreement dated as of November 16, 1998 by and between the
Company and John E. Calaway. (Incorporated by reference from
exhibit 10.13 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1998).

18
<PAGE>

+10.8 -- Incentive Plan of Edge Petroleum Corporation as Amended and
Restated Effective as of July 27, 1999. (Incorporated by
reference from exhibit 10.1 to the Company's Quarterly Report
on Form 10-Q for the quarterly period ended September 30,
1999).

+10.9 -- Edge Petroleum Corporation Incentive Plan "Standard
Non-Qualified Stock Option Agreement" by and between Edge
Petroleum Corporation and the Officers named therein.
(Incorporated by reference from exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1999).

+10.10 -- Edge Petroleum Corporation Incentive Plan "Director
Non-Qualified Stock Option Agreement" by and between Edge
Petroleum Corporation and the Directors named therein.
(Incorporated by reference from exhibit 10.3 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1999).

+10.11 -- Severance Agreements by and between Edge Petroleum
Corporation and the Officers of the Company named therein.
(Incorporated by reference from exhibit 10.4 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1999).

+10.12 -- Severance Agreement dated as o December 17, 1999 by and
between Edge Petroleum Corporation and James D. Calaway.
(Incorporated by reference from exhibit 10.13 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1999).

+10.14 -- Form of Employee Restricted Stock Award Agreement under the
Incentive Plan of Edge Petroleum Corporation (Incorporated by
Reference from exhibit 10.15 to the Company's Quarterly Report
on Form 10-Q/A for the quarterly period ended March 31, 1999).

+10.15 -- Form of Employee Restricted Stock Award Agreement between
the Company and James D. Calaway under the Incentive Plan of
Edge Petroleum Corporation (Incorporated by Reference from
exhibit 10.18 to the Company's Quarterly Report on Form 10-Q/A
for the quarterly period ended March 31, 1999).

+10.16 -- Letter agreement dated November 9, 1999 for the purchase
and sale of working interests in oil and natural gas
properties between the Company and James C. Calaway.
(Incorporated by reference from exhibit 10.16 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1999)

27.1 -- Financial Data Schedule.

+ Incorporated by reference as indicated.

(B) Reports on Form 8-K............................................... None

19
<PAGE>

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 5/12/00 /S/ John W. Elias
- ------------------------ --------------------------------
John W. Elias
Chief Executive Officer and
Chairman of the Board

Date 5/12/00 /S/ Michael G. Long
- ----------------------- --------------------------------
Michael G. Long
Senior Vice President,
Chief Financial Officer and
Controller

20
<PAGE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> Jan-01-2000
<PERIOD-END> Mar-31-2000

<CASH> 1,724,563
<SECURITIES> 0
<RECEIVABLES> 4,164,131
<ALLOWANCES> 163,000
<INVENTORY> 0
<CURRENT-ASSETS> 5,876,994
<PP&E> 83,108,301
<DEPRECIATION> (37,789,257)
<TOTAL-ASSETS> 55,071,059
<CURRENT-LIABILITIES> 10,729,593
<BONDS> 1,800,000
0
0
<COMMON> 91,920
<OTHER-SE> 42,449,646
<TOTAL-LIABILITY-AND-EQUITY> 55,071,059
<SALES> 3,810,921
<TOTAL-REVENUES> 3,810,921
<CGS> 0
<TOTAL-COSTS> 3,420,804
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (44,079)
<INCOME-PRETAX> 359,271
<INCOME-TAX> 0
<INCOME-CONTINUING> 359,272
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 359,271
<EPS-BASIC> 0.04
<EPS-DILUTED> 0.04

</TABLE>