Edge Petroleum and Chaparral Energy have mutually agreed to terminate their previously announced merger agreement.

Edge, its board of directors and advisors are actively considering other strategic alternatives to enhance shareholder value, including the possible sale or merger of Edge, sales of assets or interests in assets and additional debt or equity financing.

Edge and Chaparral determined it was highly unlikely that the conditions to the closing of the merger would be satisfied or that the parties would be able to obtain sufficient debt and equity financing to allow them to complete the Merger and operate as a combined company, particularly in light of the challenging environment in the financial markets and the energy industry.

As a result, after consultation with its legal and financial advisors, Edge's board of directors approved a merger termination agreement with Chaparral and a termination and settlement agreement among Edge, Chaparral and Magnetar Financial LLC (Magnetar).

These agreements terminated the merger agreement and Chaparral's proposed sale of preferred stock to Magnetar and its affiliates. Pursuant to the termination agreements and to reimburse the parties for certain of their expenses, Magnetar will pay Chaparral $5.0 million, of which $1.5 million will be paid to Edge at Chaparral's direction.

Tags: Chaparral Energy, Edge Petroleum Corporation