1021010--3/16/2009--EDGE_PETROLEUM

related topics

{gas, price, oil}

{debt, indebtedness, cash}

{acquisition, growth, future}

{cost, regulation, environmental}

{operation, natural, condition}

{cost, operation, labor}

{tax, income, asset}

{stock, price, share}

{personnel, key, retain}

{provision, law, control}

{loss, insurance, financial}

{condition, economic, financial}

Our January 2009 borrowing base redetermination resulted in a $114 million borrowing base deficiency under our Revolving Facility and we may not be able to satisfy the terms and conditions of our Amended Consent relating thereto or to otherwise repay our borrowing base deficiency or satisfy our other liabilities. Our ability to continue as a going concern is dependent upon a financial restructuring and/or the consummation of one or more strategic alternatives. Our Revolving Facility has substantial operating restrictions and financial covenants and we may have difficulty obtaining additional credit, which could adversely affect operations. We need to replace our reserves at a faster rate than companies whose reserves have longer production periods. Our failure to replace our reserves will result in decreasing reserves and production over time. The current financial crisis and recession has negatively impacted the prices for our oil and natural gas production, limited access to the credit and equity markets, increased the cost of capital, and may have other negative consequences that we cannot predict. Our ongoing financial and strategic alternatives process, including any transaction that might result therefrom, may reduce productivity because of its impact on our management, current and prospective employees and customers, suppliers and business partners. The loss of key personnel could adversely affect us. Oil and gas drilling is a speculative activity and involves numerous risks and substantial and uncertain costs which could adversely affect us. Oil and natural gas prices are highly volatile in general and low prices negatively affect our financial results and may further impact our borrowing base under our Revolving Facility resulting in additional borrowing base deficiencies. We have hedged and may continue to hedge our production, which may result in our making cash payments, prevent us from receiving the benefit of increases in prices for oil and natural gas or expose us to risk of financial loss at times when production is less than expected. We depend on successful exploration, development and acquisitions to maintain reserves and revenue in the future. We are subject to substantial operating risks that may adversely affect the results of our operations. We cannot control the activities on properties we do not operate and are unable to ensure their proper operation and profitability. Our operations have significant capital requirements which, if not met, will hinder operations. High demand for field services and equipment and the ability of suppliers to meet that demand may limit our ability to drill and produce our oil and natural gas properties. Government regulation and liability for environmental matters may adversely affect our business and results of operations. We face strong competition from larger oil and natural gas companies. The oil and natural gas reserve data included in or incorporated by reference in this document are estimates based on assumptions that may be inaccurate and existing economic and operating conditions that may differ from future economic and operating conditions. We may not have enough insurance to cover all of the risks we face. Our ability to utilize net operating loss carryforwards may be limited. Approximately 21% of our proved reserves were undeveloped as of December 31, 2008, and those reserves may not ultimately be developed. We do not intend to pay dividends on our common stock and our ability to pay dividends on our common stock is restricted. Our reliance on third parties for gathering and distributing could curtail future exploration and production activities. Provisions of Delaware law and our charter and bylaws may delay or prevent transactions that would benefit stockholders.

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1021010--3/16/2009--EDGE_PETROLEUM_CORP