Edge Petroleum drops to 52-week low, lowers Q3 production forecast
Shares of Edge Petroleum Corp. (Nasdaq: EPEX) have fallen to a new 52-week low on news before the opening that the oil and natural gas exploration company will decrease its third-quarter production.
The production forecast for the third quarter of 2007 is being lowered to between 6.1 billion of cubic feet equivalent (bcfe) and 6.3 bcfe, the Houston-based company said. The previous projection was for production of between 6.7 billion to 7.1 bcfe.
For the entire 2007, Edge reported that it expects production of between 24.7 billion and 25.3 bcfe, compared with a previous forecast of production between 26 billion and 27 bcfe.
“We have not been able to increase our production to the levels originally forecast,” said president, chairman and CEO John Elias in a statement.
Elias blamed the shortfall on the shutdown of an oil field in Texas due to flooding and the temporary loss of production from four fields in Arkansas.
“Compounding the loss of this expected production, natural gas prices since the first quarter of 2006 have taken a divergent path from crude oil,” added Elias. “Recent spot prices for natural gas in south Texas have been as low as $5.50, as compared to crude oil in the low $80s. Given Edge’s predominate weighting towards natural gas in its reserves and production, this gas price decline has reduced the expected cash flow as compared to Edge’s original budget and plan.”
Additionally, Edge announced that it will terminate a previously announced exploration joint venture in the southern Texas counties of Duval and McMullen with a private company. Edge will recover $5.5 million in payments and save the capital expenditures associated with drilling three to four wells.
At 1:30 p.m. ET, shares of Edge Petroleum (EPEX) were down $3.05, or 24%, to $9.69. That’s below the previous 52-week low of $11.62, which was touched on March 14. The 52-week high of $20.26 was reached on Dec. 14. 2006.
