Edge Petroleum buys independent for $12.7 million

Houston’s Edge Petroleum says it has agreed to take over Miller Exploration, a struggling family-run exploration and production independent based in Michigan, in a stock deal valued at $12.7 million.

Miller’s operations are concentrated primarily in the Mississippi Salt Basin of Central Mississippi. The company also has about 103,000 net undeveloped acres, including a large undeveloped position in northern Montana.

At year-end 2002, Miller had net proved reserves of 6.8 billion cubic feet of natural gas equivalent. Production was about 6,700 million cubic feet of equivalent. Edge would get about 4.6 billion cubic feet of proved reserves after Miller sells Alabama properties to an unidentified buyer.

Under terms of the deal announced May 29, Miller shareholders would receive about 2.54 million shares of Edge common stock, giving Miller a 21 percent of Edge equity. Miller stock is about 19 percent owned by family members and 18 percent by Detroit glassmaker Guardian Industries. Miller has no reported debt.

The $12.7 million transaction was based on Miller stock valued at between $4.70 and $5 per share, roughly one-third of its peak value of $14 per share in 1998.

Miller had net income of $437,000 in the 2003 first quarter after taking a $450,000 accounting charge. Edge posted first-quarter net of $580,200 and had 14,600 million cubic feet of gas equivalent, down 30 percent compared to the same period last year. Debt was $22 million.