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 September 30, 1999

                                       OR

             [ ] 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 November 11, 1999
                 -----                     --------------------------------
              Common Stock                             9,163,151
<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

<TABLE>

EDGE PETROLEUM CORPORATION

CONSOLIDATED BALANCE SHEETS
-----------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>              <C>
                                                                       September 30,     December 31,
                                                                           1999             1998
                                                                      ---------------  ---------------
ASSETS                                                                  (Unaudited)

CURRENT ASSETS:
   Cash and cash equivalents                                              $ 982,315         $ 272,428
   Accounts receivable, trade                                             2,004,620         2,237,113
   Accounts receivable, joint interest owners, net                          659,645         2,215,096
   Accounts receivable, related parties                                     206,069           228,922
   Other current assets                                                     208,765           313,631
                                                                       ------------      ------------
      Total current assets                                                4,061,414         5,267,190

PROPERTY AND EQUIPMENT, Net - full cost method of accounting
   for oil and natural gas properties                                    45,977,364        47,258,993

INVESTMENT IN FRONTERA                                                    3,867,232         3,744,935

OTHER ASSETS                                                                  7,789             7,789
                                                                       ------------      ------------
TOTAL ASSETS                                                           $ 53,913,799      $ 56,278,907
                                                                       ============      ============
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable, trade                                              $ 1,750,759       $ 2,948,791
   Accrued liabilities                                                    2,490,018         3,779,881
   Accrued interest payable                                                  41,162            93,880
   Current portion of long-term debt                                      2,750,000         6,700,000
                                                                       ------------       -----------
     Total current liabilities                                            7,031,939        13,522,552

LONG-TERM DEBT                                                            2,700,000         5,800,000
                                                                       ------------       -----------
     Total liabilities                                                    9,731,939        19,322,552

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Preferred stock, $.01par value; 5,000,000 shares authorized;
    none outstanding
   Common stock,  $.01par value;  25,000,000 shares  authorized;
    9,163,151 and 7,758,667  shares issued and outstanding at
    September 30, 1999 and December 31, 1998, respectively                   91,631            77,586
   Additional paid-in capital                                            55,163,019        47,769,159
   Accumulated deficit                                                   (9,848,150)       (9,398,410)
   Unearned compensation - restricted stock                              (1,224,640)       (1,491,980)
                                                                       ------------      ------------
     Total stockholders' equity                                          44,181,860        36,956,355
                                                                       ------------      ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $ 53,913,799      $ 56,278,907
                                                                       ============      ============



See accompanying notes to consolidated financial statements.
</TABLE>

                                       2
<PAGE>
<TABLE>

EDGE PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>               <C>            <C>                <C>
                                                                    Three Months Ended                 Nine Months Ended
                                                                       September 30,                     September 30,
                                                               ------------------------------   --------------------------------
                                                                    1999           1998              1999            1998

OIL AND NATURAL GAS REVENUES                                      $ 3,055,912    $ 3,981,256      $ 10,787,549     $ 11,615,967

OPERATING EXPENSES:
   Lifting costs                                                      396,254        615,017         1,362,624        1,543,830
   Severance and ad valorem taxes                                     300,652        301,081           987,871          914,799
   Depletion, depreciation and amortization                         1,161,910      2,383,371         5,475,213        5,283,394
   General and administrative expenses                                976,612      1,072,924         3,076,371        2,989,751
   Unearned compensation expense                                      124,842        165,148           292,795          496,656
                                                                  -----------    -----------      ------------     ------------
       Total operating expenses                                     2,960,270      4,537,541        11,194,874       11,228,430
                                                                  -----------    -----------      ------------     ------------

OPERATING INCOME (LOSS)                                                95,642       (556,285)         (407,325)         387,537

OTHER INCOME AND EXPENSE:
   Interest income                                                     18,106         22,124            43,817          124,383
   Interest expense                                                   (18,046)       (25,193)          (86,232)         (37,810)
                                                                  -----------    -----------      ------------     ------------
NET INCOME (LOSS) BEFORE INCOME TAX EXPENSE AND
  CUMULATIVE EFFECT OF ACCOUNTING CHANGE                               95,702       (559,354)         (449,740)         474,110

INCOME TAX BENEFIT (EXPENSE)                                                         190,945                           (176,917)
                                                                  -----------    -----------      ------------     ------------
  OF ACCOUNTING CHANGE                                                 95,702       (368,409)         (449,740)         297,193

CUMULATIVE EFFECT OF ACCOUNTING CHANGE                                                                                1,780,835
                                                                  -----------    -----------      -------------    ------------
NET INCOME (LOSS)                                                    $ 95,702     $ (368,409)       $ (449,740)     $ 2,078,028
                                                                  ===========    ===========      ============     ============

BASIC EARNINGS (LOSS) PER SHARE:

  Net income (loss) before cumulative effect of accounting change      $ 0.01        $ (0.05)          $ (0.05)          $ 0.04

  Cumulative effect of accounting change                                                                                   0.23
                                                                      -------        -------           -------          -------
  Basic earnings (loss) per share                                      $ 0.01        $ (0.05)          $ (0.05)          $ 0.27
                                                                      =======        =======           =======          =======

DILUTED EARNINGS (LOSS) PER SHARE:

  Net income (loss) before cumulative effect of accounting change      $ 0.01        $ (0.05)          $ (0.05)          $ 0.04

  Cumulative effect of accounting change                                                                                   0.23
                                                                      -------        -------           -------          -------
  Diluted earnings (loss) per share                                   $ 0.01         $ (0.05)          $ (0.05)          $ 0.27
                                                                      =======        =======           =======          =======

BASIC WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING                                       9,163,151       7,772,580         8,514,561        7,771,903
                                                                  ==========      ==========        ==========        =========

DILUTED WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING                                       9,234,311       7,772,580         8,514,561        7,802,701
                                                                  ==========       ==========       ==========        =========


See accompanying notes to consolidated financial statements.
</TABLE>

                                       3
<PAGE>
<TABLE>

EDGE PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>            <C>         <C>          <C>             <C>               <C>

                                                                                                 Unearned
                                            Common Stock          Additional                   Compensation -        Total
                                      --------------------------   Paid-in     Accumulated      Restricted      Stockholders'
                                         Shares         Amount     Capital       Deficit           Stock            Equity
                                      ------------   ----------- ------------  ------------    --------------   -------------
BALANCE,
   JANUARY 1, 1999                       7,758,667     $ 77,586  $ 47,769,159  $ (9,398,410)    $ (1,491,980)   $ 36,956,355

  Forfeiture of restricted common stock       (325)          (3)       (4,021)                         4,024

  Issuance of restricted common stock        4,809           48        29,431                        (29,479)

  Private common stock offering,
    net of offering costs of $230,050    1,400,000       14,000     7,368,450                                      7,382,450

   Unearned compensation expense                                                                     292,795         292,795

   Net loss                                                                        (449,740)                        (449,740)
                                        ---------    ---------    -----------  ------------     ------------    ------------
BALANCE,
   SEPTEMBER  30, 1999                  9,163,151     $ 91,631   $ 55,163,019  $ (9,848,150)    $ (1,224,640)   $ 44,181,860
                                        =========    =========   ============  ============     =============   ============



































See accompanying notes to consolidated financial statements.
</TABLE>

                                       4
<PAGE>
<TABLE>

EDGE PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
-----------------------------------------------------------------------------------------------------------
<S> ..........................                                                 <C>              <C>

                                                                                    Nine Months Ended
                                                                                      September 30,
                                                                               ----------------------------
                                                                                   1999          1998

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                              $ (449,740)  $ 2,078,028
   Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:
      Cumulative effect of accounting change                                                    (1,780,835)
      Depletion, depreciation and amortization                                     5,475,213     5,283,394
      Deferred income taxes                                                                        176,917
      Unearned compensation expense                                                  292,795       496,656
   Changes in assets and liabilities:
      Accounts receivable, trade                                                     232,493      (218,341)
      Accounts receivable, joint interest owners, net                              1,555,451     2,864,922
      Accounts receivable, related parties                                            22,853       149,900
      Other current assets                                                           104,866       (65,160)
      Other assets                                                                                   9,443
      Accounts payable, trade                                                     (1,198,032)      162,872
      Accounts payable, related party                                                              (40,000)
      Accrued liabilities                                                         (1,289,863)      453,667
      Accrued interest payable                                                       (52,718)      233,184
                                                                                 -----------    ----------
         Net cash provided by operating activities                                 4,693,318     9,804,647
                                                                                 -----------    ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Oil and natural gas property and equipment purchases                          (11,269,850)  (29,734,069)
   Proceeds from the sale of oil and natural gas properties and prospects          7,076,266     3,009,120
   Investment in Frontera                                                           (122,297)
                                                                                 -----------   -----------
         Net cash used in investing activities                                    (4,315,881)  (26,724,949)
                                                                                 ------------  -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from private offering, net of offering cost                             7,382,450
  Proceeds (payments) on notes payable                                            (7,050,000)   13,850,000
                                                                                 ------------  -----------
         Net cash provided by financing activities                                   332,450    13,850,000
                                                                                 -----------   -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                 709,887    (3,070,302)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                       272,428     3,777,950
                                                                                 -----------   -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                           $ 982,315     $ 707,648
                                                                                 ===========   ===========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
  Cash paid for interest, net of amounts capitalized                                $ 95,225       $ 5,682
  Issuance of restricted stock                                                      $ 29,479     $ 144,017
  Forfeiture nonvested restricted common stock                                       $ 4,024       $ 3,986





See accompanying notes to consolidated financial statements.
</TABLE>

                                       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.  Certain prior year
amounts have been reclassified to conform to the current year presentation. Such
reclassifications  do not affect net income (loss).  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, 1998.

     Accounting Change - 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  that  are  directly  attributable  to  the
Company's acquisition, exploration and development activities are capitalized in
a "full-cost  pool" as incurred.  In the second  quarter of 1998,  and effective
January 1, 1998,  the Company  changed  its method of  accounting  for  internal
geological and geophysical ("G&G") costs to one of capitalization of such costs,
which are directly  attributable  to  acquisition,  exploration  and development
activities,  to oil and natural gas properties.  Prior to the change the Company
expensed these costs as incurred.  The Company  believes the  accounting  change
provides  for a better  matching of  revenues  and  expenses  and  enhances  the
comparability  of it's financial  statements  with those of other companies that
follow the full-cost  method of  accounting.  The $1,780,835 (or $0.23 basic and
diluted  earnings  per share)  cumulative  effect of the  change in prior  years
(after  reduction  for income  taxes of  $958,910) is included in income for the
nine months ended September 30, 1998.

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  137").  SFAS 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.  Earlier application of SFAS No. 133
is encouraged,  but not prior to the beginning of any fiscal quarter that begins
after issuance of SFAS No. 137.

2.  LONG TERM DEBT

    During July 1995, the Company entered into a revolving  credit facility (the
"Revolving  Credit  Facility") with a bank to finance  temporary working capital
requirements.  The  Revolving  Credit  Facility  provided  up to $20  million in
borrowings  limited by a  borrowing  base,  as defined by the  Revolving  Credit
Facility.  The Revolving  Credit Facility  provided for interest at the lender's
prime rate plus 0.75%. The borrowing base was subject to review by the bank on a
quarterly basis and could be adjusted subject to the provisions of the Revolving
Credit Facility. Effective April 1,

                                       6
<PAGE>

1998, the Company amended and restated its Revolving  Credit Facility to provide
a  revolving  line of credit of up to $100  million  bearing  interest at a rate
equal to prime or LIBOR plus 1.5% - 2% depending on the level of borrowing  base
utilization.  The Company's  initial  borrowing base authorized by the banks was
approximately  $15  million.   The  Revolving  Credit  Facility  is  secured  by
substantially all the assets of the Company.

    Effective   September  29,  1998,   the  Company  had  its  borrowing   base
redetermined. The initial borrowing base authorized by the bank was $15 million.
Beginning  October 1, 1998, and on the first day of each month  thereafter,  the
borrowing base was required to be reduced by $550,000.

    Effective  March 1, 1999,  the  Company and the Bank  amended the  Revolving
Credit Facility to include the following  terms:  1) the initial  borrowing base
was $12 million  comprised of a two tranche  financing of a $9 million Revolving
Credit Facility and a $3 million term facility; 2) Beginning May 1, 1999, and on
the first day of each month thereafter,  the Revolving Credit Facility borrowing
base was  required  to be  reduced by  $400,000;  and 3) 75% of  prospect  sales
proceeds were to be used to pay down the term facility with the remaining unpaid
term facility balance maturing on August 31, 1999. On May 8, 1999, from proceeds
generated  by the  Private  Offering  (see Note 5),  the  Company  repaid the $3
million term loan in addition to $1.9 million of the Revolving Credit Facility.

    Effective July 1, 1999, the Company had its borrowing base redetermined. The
initial  borrowing  base  authorized by the bank is was $8.8 million.  Beginning
August 1, 1999,  and on the first day of each month  thereafter,  the  borrowing
base was required to be  reduced by $400,000.  Total  borrowing  available under
the  Revolving  Credit  Facility was  approximately  $1.65 million at October 1,
1999.  Total  outstanding  long-term  debt  (including  current  portion)  as of
September 30, 1999 was $5.45 million.

    Effective November 1, 1999, the Company had its borrowing base redetermined.
The initial  borrowing  base  authorized  by the bank is $9  million.  Beginning
December 1, 1999,  and on the first day of each month  thereafter, the borrowing
base is required to be reduced by $450,000.

    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.  Interest  will  accrue at a rate of
LIBOR  plus  1.75% - 2.75%  depending  on the  borrowing  base  utilization.  At
September  30,  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.


                                       7
<PAGE>

    The  following  is  presented  as a  reconciliation  of the  numerators  and
denominators of basic and diluted earnings per share computations, in accordance
with SFAS No. 128.
<TABLE>
<S> .......................... <C>          <C>               <C>          <C>             <C>            <C>

                                 Three Months Ended September 30, 1999       Three Months Ended September 30, 1998
                               -----------------------------------------   -----------------------------------------
                                  Income        Shares        Per-Share    Income (Loss)     Shares       Per-Share
                               (Numerator   (Denominator)       Amount      (Numerator)   (Denominator)     Amount
                               -----------  -------------      ---------    -------------  -------------  ----------
Basic EPS
Income (loss) available to
  common  stockholders            $ 95,702      9,163,151        $ 0.01       $ (368,409)     7,772,580    $ (0.05)

Effect of Dilutive Securities
Common stock options                               71,160
                                 ---------      ---------        ------         ----------    ---------     -------
Diluted EPS
Income (loss) available to
 common  stockholders             $ 95,702      9,234,311        $ 0.01       $ (368,409)     7,772,580    $ (0.05)
                                 =========     ==========        ======       ==========     ==========    =======
</TABLE>
<TABLE>
<S> .......................... <C>          <C>               <C>          <C>             <C>            <C>


                                 Nine Months Ended September 30, 1999       Nine Months Ended September 30, 1998
                               -----------------------------------------   -----------------------------------------
                                  Income        Shares        Per-Share    Income (Loss)     Shares       Per-Share
                               (Numerator   (Denominator)       Amount      (Numerator)   (Denominator)     Amount
                               -----------  -------------      ---------    -------------  -------------  ----------
Basic EPS
Income (loss) available to
  common  stockholders          $(449,740)     8,514,561        $(0.05)      $2,078,028     7,771,903     $  0.27

Effect of Dilutive Securities
Common stock options                                                                           30,798
                                ----------     ---------         ------      ----------     ---------     -------
Income (loss) available to
 common  stockholders           $(449,740)     8,514,561        $(0.05)      $2,078,028     7,802,701     $  0.27
                                ==========     =========         ======      ==========     =========     =======
</TABLE>

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
Company having  significant  deferred tax assets,  no tax benefit  (expense) was
recorded at September 30, 1999. Due to the uncertainty of the Company's  ability
to become profitable in the future, an allowance has been provided to offset the
tax benefits of certain tax assets. Should the Company have net income in future
periods,  income tax expense  will be recorded  upon  utilization  of  available
deferred tax assets.

5.   EQUITY

     On May 7, 1999,  the Company  completed a "Private  Offering"  of 1,400,000
shares of common  stock at a price of $5.40 per common  share.  The Company also
issued  warrants,  which were  purchased  for $0.125 per warrant,  to acquire an
additional 420,000 shares of common stock at $5.35 per share and are exercisable
through May 6, 2004. At the election of the Company,  the warrants may be called
at a  redemption  price of $0.01 per warrant at any time after any date at which
the average daily per share closing bid price for the immediately  proceeding 20
consecutive


                                       8
<PAGE>

trading days exceeds $10.70. No warrants have been exercised as of September 30,
1999. Total proceeds,  net of offering costs, were approximately $7.4 million of
which $4.9 million was used to repay debt under the  Revolving  Credit  Facility
with the remainder being utilized to satisfy working capital requirements and to
fund a portion of the Company's exploration program.

     Effective May 21, 1999, the Company amended and restated it's  Nonqualified
Stock Option Plan. In  conjunction  with the amendment of the plan,  the Company
exchanged, on a voluntary basis, 594,733 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 grant price of the  replacement
options was  $7.0625,  which  represents  the fair  market  value on the date of
grant. The reissued 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 elected to issue 114,000 new ten-year  common
stock options to employees,  which vest 100% on May 21, 2001. The grant price of
the new options was $7.0625,  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
vesting 100% on June 1, 2001.

     The  Company  accounts  for Stock Based  Compensation  in  accordance  with
Financial  Accounting  Standards  Board  Statement No. 123 "Accounting for Stock
Based  Compensation,"  ("SFAS No.  123").  Under SFAS No.  123,  the  Company is
permitted  to either  record  expenses  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
elected to continue following APB No. 25.

6.   PROPERTY DISPOSITION

     During August 1999,  the Company  completed a transaction in which it sold,
effective  July  1,  1999,  its  working   interests  in  proved  producing  and
undeveloped  properties  within it's BTA and Spartan Extension 3-D project areas
in  Goliad  and  Victoria   Counties,   Texas.   Proceeds  from  the  sale  were
approximately  $4 million and associated net proved reserves were  approximately
1.3 Bcfe or 6% of the  Company's  total  proved  reserves.  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.

7.   HEDGING ACTIVITIES

     Due to the  instability  of oil and  natural  gas  prices,  the Company has
entered into, from time to time, price risk management transactions (e.g., swaps
and collars) for a portion of it's 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 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 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.



                                       9
<PAGE>

     The impact on oil and natural gas revenues from hedging  activities for the
three and nine-month periods ended September 30, 1999 and 1998 was as follows:
<TABLE>
<S> .......<C>                  <C>            <C>         <C>       <C>         <C>          <C>
                                                                            Gain (Loss)
                                                  Mcf      ---------------------------------------------
  Hedge      Effective Dates      Price Per     Volumes    Three Months Ended       Nine Months Ended
   Type     Beginning   Ending      MMbtu       Per Day       September 30,           September 30,
--------   -------------------- -------------  ---------   --------------------  -----------------------
                                                             1999        1998         1999       1998
Collar      10/1/97    1/31/98  $2.50 - $3.15      5,000
Collar       2/1/98    4/30/98  $2.25 - $2.75      5,000                                      $ 36,700
Collar       4/1/98    6/30/98  $2.15 - $2.37     10,000                                        30,000
Collar       7/1/98    9/30/98  $2.25 - $2.88     10,000              $304,100                 304,100
Swap         3/1/99   10/31/99  $       1.957     13,000  $(773,057)            $  (861,631)
Swap         4/1/99    9/15/99  $       2.145      3,000   (126,510)               (154,124)
                                                          ---------   --------    ---------    -------
    Total                                                 $(899,567)  $304,100  $(1,015,755)  $370,800
                                                          ==========  ========  ============  ========
</TABLE>

     The Company's hedging  activities 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.

     During August 1999, the Company entered into two hedge transactions;  (i) a
fixed  price swap for $3.00 per MMbtu and (ii) a collar with a floor and ceiling
price of $3.00 per MMbtu and $3.30 per MMbtu, respectively,  both of which cover
3,000 Mcf per day for November and December 1999  production.  During  September
1999, the $3.00 MMbtu swap was exchanged for the $2.145 MMbtu swap, resulting in
no gain or (loss) being recorded.  During October 1999, the Company entered into
a fixed  price swap for $3.00 per MMbtu  covering  3,000 Mcf per day.  This swap
also covers  November and December  1999  production.  At September 30, 1999 the
fair value of all hedges was approximately  $(207,000).  There were no hedges in
place at September 30, 1998.

























                                       10
<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,  1998.
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 164,000 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   September   30,  1999  and  1998  were  $475,926  and  $748,454,
respectively,  and during the nine months ended September 30, 1999 and 1998 were
$1,544,666 and $1,943,196,  respectively.  The Company records  depletion of its
full-cost pool using the unit of production method. Investments in


                                       11
<PAGE>

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 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 September 30, 1999, 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 has
entered into, from time to time, price risk management transactions (e.g., swaps
and  collars)  for a portion of its  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  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 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 September 30,
1999 the fair value of all hedges was  approximately  $(207,000).  There were no
hedges in place at September 30, 1998. (See Note 7).

     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  September  30,  1999  Compared to the Three  Months  Ended
September 30, 1998

     Revenue and Production

     Oil and natural gas revenues for the three months ended  September 30, 1999
decreased  23% from  $3,981,256 to  $3,055,912,  as compared to the three months
ended September 30, 1998.  Production  volumes for oil,  condensate and NGLs for
the three  months ended  September  30, 1999  increased  50% from 34 MBbls to 50
MBbls, as compared to the three months ended September 30, 1998. The increase in
oil,  condensate and NGL production  during the three months ended September 30,
1999 increased  revenues by $184,245 (based on 1998  comparable  quarter average
prices),  further increased by a 44% increase in the average oil, condensate and
NGL sales price which  increased  revenues by $244,996 (based on current quarter
production).  Production  volumes  for natural  gas for the three  months  ended
September  30, 1999  decreased 24% from 1,599 MMcf to 1,217 MMcf, as compared to
the three  months  ended  September  30,  1998.  The  decrease  in  natural  gas
production  during the three months ended September 30, 1999 decreased  revenues
by $860,958,  further  decreased  by an 18% decrease in the average  natural gas
sales price which  decreased  revenues by $493,627.  The decrease in  production
volumes  was  primarily  attributable  to the  disposition  of proved  producing
properties  effective  July 1,  1999  (see Note 6),  further  reduced  by normal
production  declines  from  existing  wells  offset by 11 gross  (3.96  net) new
successful  exploratory and development  wells being drilled and completed since
September 30, 1998.  Included  within  natural gas revenues for the three months
ended  September 30, 1999 and 1998 was  ($899,567)  and $304,100,  respectively,
representing  (losses) and gains from hedging  activities  (see Note 7). Hedging
activities  decreased  the  effective  natural gas sales price by  approximately
$0.74  per Mcf (or  29%)  and  increased  the  effective  natural  gas  price by
approximately  $0.19 per Mcf (or 9%) for the  three-months  ended  September 30,
1999 and 1998, respectively.

                                       12
<PAGE>



       The following  table sets forth certain  operational  data of the Company
for the periods presented:
<TABLE>
<S> ..........................            <C>            <C>           <C>         <C>
                                             Three Months Ended        1999 Period Compared
                                                September 30,             to 1998 Period
                                         --------------------------   -------------------------
                                                                        Increase   % Increase
                                             1999           1998       (Decrease)   (Decrease)
                                             ----           ----       ----------   ----------
Production volumes:
   Oil, condensate and NGLs (Bbls)            50,274        33,607       16,667        50 %
   Natural gas (Mcf)                       1,217,128     1,598,529     (381,401)      (24)%

   Natural gas equivalents (Mcfe)          1,518,772     1,800,171     (281,399)      (16)%

Average sales prices:
   Oil, condensate and NGLs ($ per Bbl)      $ 15.95       $ 11.09       $ 4.86        44 %
   Natural gas ($ per Mcf)                      1.85          2.26        (0.41)      (18)%
   Natural gas equivalent ($ per Mcfe)          2.01          2.21        (0.20)       (9)%

Operating revenues:
   Oil, condensate and NGLs               $  802,047    $  372,806   $  429,241       115 %
   Natural gas                             2,253,865     3,608,450   (1,354,585)      (38)%
                                          ----------    ----------  -----------

Total                                     $3,055,912    $3,981,256   $ (925,344)      (23)%
                                        ============  ============  ============
</TABLE>

     Costs and Operating Expenses

     Lifting costs for the three months ended  September 30, 1999  decreased 36%
from  $615,017 to $396,254 as compared to the three months ended  September  30,
1998 due primarily to the disposition of proved producing  properties  effective
July 1, 1999 (see Note 6), and due to a corporate focus to improve the operating
structure in the field. Lifting costs were $0.26 per Mcfe and $0.34 per Mcfe for
the three-month periods ended September 30, 1999 and 1998, respectively.

     Depletion,  depreciation  and  amortization  expense ("DD&A") for the three
months ended September 30, 1999 decreased 51% from $2,383,371 to $1,161,910,  as
compared to the three months ended September 30, 1998.  Included within DD&A for
the  three-month  periods  ended  September  30, 1999 and 1998 was  $993,659 and
$2,181,380, respectively,  representing depletion expense of oil and natural gas
property,  which  decreased  by 55%.  Decreased  oil and natural gas  production
decreased  depletion  expense by  $341,410  and a 46%  decrease  in the  overall
depletion rate further decreased depletion expense by $846,311.  The decrease in
the  depletion  rate was primarily  attributable  to the  disposition  of proved
producing properties effective July 1, 1999 (see Note 6), offset by abandonments
of certain  projects,  prospects and wells and dry holes drilled since September
30, 1998.  Depletion  expense on a unit of production  basis for the three-month
periods ended September 30, 1999 and 1998 was $0.65 per Mcfe and $1.21 per Mcfe,
respectively.   The  remaining   decrease  in  DD&A  is  due  primarily  to  the
amortization  of deferred  loan cost on the Revolving  Credit  Facility of 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
September 30, 1999 decreased 9% from $1,072,924 to $976,612,  as compared to the
three  months  ended  September  30,  1998.  The  decrease in G&A was  primarily
attributable to a decrease in professional service fees and international travel
expenses incurred pursuing new business opportunities.  This decrease in G&A was
partially  offset by a reduction of overhead  reimbursement  fees  received from
various  management,  operating and seismic  agreements  during the three months
ended  September  30,  1999.  Overhead  reimbursement  fees  are  recorded  as a
reduction  of G&A and were  approximately  $65,000  and  $251,000  for the three
months  ended   September   30,  1999  and  1998,   respectively.   General  and
administrative  expenses  on a unit of  production  basis  for  the  three-month
periods  ended  September  30,  1999 and 1998 were  $0.64 per Mcfe and $0.60 per
Mcfe, respectively.

     Unearned compensation expense for the three months ended September 30, 1999
decreased  from  $165,148 to  $124,842,  as compared to the three  months  ended
September 30, 1998. The decrease is due to the resignation of the


                                       13
<PAGE>
former CEO and Chairman of the Board  during  November of 1998 whereby he vested
in his  remaining  restricted  stock grant.  The Company  charged to expense his
unamortized unearned compensation upon his resignation.

     Interest  expense for the three months ended September 30, 1999 was $18,046
as compared to $25,193 for the three months ended  September 30, 1998. The total
amount of interest  capitalized  to oil and natural  gas  properties  during the
three-month periods ended September 30, 1999 and 1998 was $103,246 and $166,491,
respectively.  The  decrease in interest  expense is due to the  decrease in the
weighted  average  long-term  debt balance  outstanding  during the three months
ended  September 30, 1999 compared to the three month period ended September 30,
1998.  Weighted  average  debt was  $6.5  million  for the  three  months  ended
September  30,  1999  compared  to $10.8  million  for the  three  months  ended
September 30, 1998.

     Interest  income for the three months ended  September  30, 1999  decreased
from $22,124 to $18,106,  as compared to the three months  ended  September  30,
1998.  The  decrease  in  interest  income is due to the  overall  reduction  in
invested funds.

     Due to the Company having  significant  deferred tax assets, no tax benefit
(expense) was recorded for the three months ended September 30, 1999. Due to the
uncertainty  of the Company's  ability to become  profitable  in the future,  an
allowance  has been  provided to offset the tax  benefits of certain tax assets.
Should the Company have net income in future periods, income tax expense will be
recorded upon  utilization  of available tax assets.  Income tax benefit for the
three-months ended September 30, 1998 was $190,945.

     For the three months ended  September  30, 1999,  the Company had operating
income of $95,642  compared to an  operating  loss of  $(556,285)  for the three
month period ended  September  30, 1998,  primarily  reflecting  decreased  DD&A
partially  offset by a decrease in natural  gas  revenues  resulting  from lower
natural gas  production and hedging  activities.  Net income was $95,702 for the
three months ended  September  30, 1999 as compared to a net loss of  $(368,409)
for the three-month period ended September 30, 1998.

Nine Months Ended September 30, 1999 Compared to the Nine Months Ended September
30, 1998

     Revenue and Production

     Oil and natural gas revenues for the nine months ended  September  30, 1999
decreased 7% from  $11,615,967  to  $10,787,549,  as compared to the nine months
ended September 30, 1998.  Production  volumes for oil,  condensate and NGLs for
the nine months ended  September  30, 1999  increased  28% from 115 MBbls to 147
MBbls,  as compared to the nine months ended September 30, 1998. The increase in
oil, condensate and NGL production increased revenues by $395,144 (based on 1998
comparable period average prices) and an 8% increase in average oil,  condensate
and NGL sales price further increased revenue by $139,076 (based on current year
production).  Production volumes for natural gas increased 2% from 4,442 MMcf to
4,546 MMcf,  as  compared  to the nine months  ended  September  30,  1998.  The
increase in natural gas production  increased revenues by $238,671,  offset by a
15%  decrease in average  natural gas sales  price which  decreased  revenues by
$1,601,309.  The increase in  production  volumes was due to 11 gross (3.96 net)
new successful  exploratory  and  development  wells being drilled and completed
since September 30, 1998 offset by the lost production due to the disposition of
proved producing properties effective July 1, 1999 (see Note 6), further reduced
by normal production  declines from existing wells.  Included within natural gas
revenues for the nine months ended September 30, 1999 and 1998 was  $(1,015,755)
and  $370,800,  respectively,  representing  (losses)  and  gains  from  hedging
activities (see Note 7). Hedging activities  decreased the effective natural gas
sales price by approximately  $0.22 per Mcf (or 10%) and increased the effective
natural  gas price by  approximately  $0.08 per Mcf (or 4%) for the nine  months
ended September 30, 1999 and 1998, respectively.

                                       14
<PAGE>

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

<TABLE>
<S> ..........................            <C>            <C>           <C>         <C>
                                             Nine Months Ended        1999 Period Compared
                                                September 30,             to 1998 Period
                                         --------------------------   -------------------------
                                                                        Increase   % Increase
                                             1999           1998       (Decrease)   (Decrease)
                                             ----           ----       ----------   ----------
Production volumes:
   Oil, condensate and NGLs (Bbls)           147,325       115,098       32,227         28 %
   Natural gas (Mcf)                       4,545,810     4,441,921      103,889          2 %

   Natural gas equivalents (Mcfe)          5,429,760     5,132,509      297,251          6 %

Average sales prices:
   Oil, condensate and NGLs ($ per Bbl)      $ 13.21       $ 12.26       $ 0.95          8 %
   Natural gas ($ per Mcf)                      1.95          2.30        (0.35)       (15)%
   Natural gas equivalent ($ per Mcfe)          1.99          2.26        (0.28)       (12)%

Operating revenues:
   Oil, condensate and NGLs              $ 1,945,468   $ 1,411,248   $  534,220         38 %
   Natural gas                             8,842,081    10,204,719   (1,362,638)       (13)%
                                          ----------    ----------  -----------

Total                                    $10,787,549   $11,615,967   $ (828,418)        (7)%
                                        ============  ============  ============
</TABLE>

     Costs and Operating Expenses

     Lifting costs for the nine months ended  September  30, 1999  decreased 12%
from $1,543,830 to $1,362,624 as compared to the nine months ended September 30,
1998, due primarily to the disposition of proved producing  properties effective
July 1, 1999 (see Note 6), and due to a corporate focus to improve the operating
structure in the field.  Lifting costs on a unit of production  basis were $0.25
per Mcfe and $0.30 per Mcfe for the nine-month  periods ended September 30, 1999
and 1998, respectively.

     Depletion,  depreciation  and  amortization  expense  ("DD&A") for the nine
months ended September 30, 1999 increased 4% from  $5,283,394 to $5,475,213,  as
compared to the nine months ended  September 30, 1998.  Included within DD&A for
the  nine-month  periods ended  September 30, 1999 and 1998 was  $4,944,974  and
$4,733,974, respectively,  representing depletion expense of oil and natural gas
property,  which  increased  by 4%.  Increased  oil and natural  gas  production
increased depletion expense by $274,170,  offset by a 1% decrease in the overall
depletion rate which decreased depletion expense by $63,170. The decrease in the
depletion rate was primarily attributable to the disposition of proved producing
properties  effective  July 1,  1999 (see Note 6),  offset  by  abandonments  of
certain projects,  prospects and wells and dry holes drilled since September 30,
1998. Depletion expense on a unit of production basis for the nine-month periods
ended  September  30,  1999 and 1998 was  $0.91  per Mcfe and  $0.92  per  Mcfe,
respectively.

     G&A  for the  nine  months  ended  September  30,  1999  increased  3% from
$2,989,751  to  $3,076,371,  as compared to the nine months ended  September 30,
1998. Total overhead  reimbursement  fees are recorded as a reduction of G&A and
were  approximately  $240,000 and  $674,000,  respectively,  for the  nine-month
periods ended September 30, 1999 and 1998. G&A on a unit of production basis for
the nine-month  periods ended September 30, 1999 and 1998 was $0.57 per Mcfe and
$0.58 per Mcfe, respectively.

     Unearned  compensation expense for the nine months ended September 30, 1999
decreased  from  $496,656 to  $292,795,  as  compared  to the nine months  ended
September  30, 1998.  The decrease is primarily  due to the  resignation  of the
former CEO and Chairman of the Board  during  November of 1998 whereby he vested
in his  remaining  restricted  stock grant.  The Company  charged to expense his
unamortized unearned compensation upon his resignation.

     Interest  expense for the nine months ended  September 30, 1999 was $86,232
compared to $37,810 for the nine months  ended  September  30,  1998.  The total
amount of interest  capitalized  to oil and natural gas  properties was $461,351
and  $433,245  for  the  nine  months  ended   September   30,  1999  and  1998,
respectively. The increase in interest


                                       15
<PAGE>

expense is due to the increase in the weighted  average  long-term  debt balance
outstanding during the nine months ended September 30, 1999 compared to the nine
month period ended  September 30, 1998.  Weighted  average debt was $9.6 million
for the nine months ended  September  30, 1999  compared to $4.7 million for the
nine months ended September 30, 1998.

     Interest  income for the nine months ended  September  30, 1999 was $43,817
compared to $124,383 for the nine months ended  September 30, 1998. The decrease
in interest income is due to the overall reduction in invested funds.

     Due to the Company incurring a net loss for the nine months ended September
30, 1999 and due to the Company having  significant  deferred tax assets, no tax
benefit (expense) was recorded.  Due to the uncertainty of the Company's ability
to become profitable in the future, an allowance has been provided to offset the
tax benefits of certain tax assets. Should the Company have net income in future
periods  income tax expense will be recorded upon the  utilization  of available
tax  assets.  Tax  expense  for the nine  months  ended  September  30, 1998 was
$176,917.

     For the nine months ended  September 30, 1999, the Company had an operating
loss of $(407,325)  compared to operating income of $387,537 for the nine months
ended  September  30,  1998,  primarily  reflecting  a decrease  in natural  gas
revenues  resulting from a decrease in the average  prices  received for natural
gas. The net loss was  $(449,740)  for the nine months ended  September 30, 1999
compared  to net income of  $2,078,028,  $297,193  before  cumulative  effect of
accounting change, for the nine months ended September 30, 1998.

LIQUIDITY AND CAPITAL RESOURCES

     On May 7, 1999,  the Company  completed a "Private  Offering"  of 1,400,000
shares of common  stock at a price of $5.40 per common  share.  The Company also
issued  warrants,  which were  purchased  for $0.125 per warrant,  to acquire an
additional 420,000 shares of common stock at $5.35 per share and are exercisable
through May 6, 2004. At the election of the Company,  the warrants may be called
at a  redemption  price of $0.01 per warrant at any time after any date at which
the average daily per share closing bid price for the immediately  proceeding 20
consecutive  trading days exceeds $10.70.  No warrants have been exercised as of
June 30, 1999. Total proceeds,  net of offering costs, were  approximately  $7.4
million of which $4.9 million was used to repay debt under the Revolving  Credit
Facility  with  the  remainder   being  utilized  to  satisfy   working  capital
requirements and to fund a portion of the Company's exploration program.

     The Company had cash and cash equivalents at September 30, 1999 of $982,315
consisting  primarily of  short-term  money market  investments,  as compared to
$272,428 at December 31, 1998.  Working  capital  (deficit) was  $(2,970,525) at
September 30, 1999, as compared to $(8,255,362) at December 31, 1998.

     Operating  cash flow was  approximately  $5,318,268  and $6,254,160 for the
nine-month  periods ended September 30, 1999 and 1998,  respectively.  Operating
cash flow, a measure of performance for  exploration  and production  companies,
represents cash flows from operating  activities  prior to changes in assets and
liabilities.  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 nine months ended  September 30, 1999, 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 nine months ended September
30, 1999 were  approximately  $11.3 million as compared to $29.7 million  during
the same  period in 1998.  The Company  expended  $4.7  million in its  drilling
operations  resulting  in the  drilling of 11 gross (3.62 net) wells  during the
nine months ended  September  30, 1999 as compared to 79 gross (33.23 net) wells
during the same period in 1998.  Three wells,  spud prior to September 30, 1999,
are currently  drilling or in the process of being  completed,  the Broussard #1
(formerly the Varn #2) located in South Louisiana and the CNG #1 and the Neblett
#1 located in South  Texas.  Land and data  acquisition  expenditures  were $4.6
million and were largely  attributable  to the  Nodosaria  Embayment 3-D Project
Area in South  Louisiana.  The remaining cost capitalized to oil and natural gas
properties  was  capitalized  internal  G&G and  interest  of  approximately  $2
million.  Total capital  expenditures  for 1999 are expected to be approximately
$15 million.


                                       16
<PAGE>

     On  October  25,  1999  the  Company  logged  the  Broussard  #1 and it was
determined to be a dryhole.  The total cost of this well including leasehold was
approximately $2.2 million has been abandoned.

     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 1999 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.  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

     During July 1995, the Company entered into a revolving credit facility (the
"Revolving  Credit  Facility") with a bank to finance  temporary working capital
requirements.  The  Revolving  Credit  Facility  provided  up to $20  million in
borrowings  limited by a  borrowing  base,  as defined by the  Revolving  Credit
Facility.  The Revolving  Credit Facility  provided for interest at the lender's
prime rate plus 0.75%. The borrowing base was subject to review by the bank on a
quarterly basis and could be adjusted subject to the provisions of the Revolving
Credit  Facility.  Effective April 1, 1998, the Company amended and restated its
Revolving  Credit  Facility to provide a revolving  line of credit of up to $100
million  bearing  interest  at a rate  equal to prime  or LIBOR  plus  1.5% - 2%
depending on the level of borrowing  base  utilization.  The  Company's  initial
borrowing  base  authorized  by the banks was  approximately  $15  million.  The
Revolving  Credit  Facility  is secured by  substantially  all the assets of the
Company.

     Effective   September  29,  1998,   the  Company  had  its  borrowing  base
redetermined. The initial borrowing base authorized by the bank was $15 million.
Beginning  October 1, 1998, and on the first day of each month  thereafter,  the
borrowing base was required to be reduced by $550,000.

     Effective  March 1, 1999,  the Company and the Bank  amended the  Revolving
Credit Facility to include the following  terms:  1) the initial  borrowing base
was $12 million  comprised of a two tranche  financing of a $9 million Revolving
Credit Facility and a $3 million term facility; 2) Beginning May 1, 1999, and on
the first day of each month thereafter,  the Revolving Credit Facility borrowing
base was  required  to be  reduced by  $400,000;  and 3) 75% of  prospect  sales
proceeds were to be used to pay down the term facility with the remaining unpaid
term facility balance maturing on August 31, 1999. On May 8, 1999, from proceeds
generated  by the  Private  Offering  (see Note 5),  the  Company  repaid the $3
million term loan in addition to $1.9 million of the Revolving Credit Facility.

     Effective July 1, 1999,  the Company had its borrowing  base  redetermined.
The initial borrowing base authorized by the bank is was $8.8 million. Beginning
August 1, 1999,  and on the first day of each month  thereafter,  the  borrowing
base was required to be reduced by $400,000.  Total  borrowing  available  under
the  Revolving  Credit  Facility was approximately  $1.65  million at October 1,
1999.  Total  outstanding  long-term  debt  (including  current  portion)  as of
September 30, 1999 was $5.45 million.

     Effective   November  1,  1999,   the  Company  had  its   borrowing   base
redetermined.  The initial  borrowing base authorized by the bank is $9 million.
Beginning  December 1, 1999, and on the first day of each month  thereafter, the
borrowing base is required to be reduced by $450,000.

     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


                                       17
<PAGE>

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.  Interest  will  accrue  at a rate of  LIBOR  plus  1.75% - 2.75%
depending on the borrowing base  utilization.  At September 30, 1999 the Company
was in compliance with the above mentioned covenants.

     Accounting Change

     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 that are directly attributable to the Company's  acquisition,  exploration
and development activities are capitalized in a "full-cost pool" as incurred. In
the second quarter of 1998 and effective  January 1, 1998,  the Company  changed
its method of accounting for internal  geological and geophysical  ("G&G") costs
to one of  capitalization  of such costs,  which are  directly  attributable  to
acquisition,  exploration  and  development  activities,  to oil and natural gas
properties.  Prior to the change the Company  expensed  these costs as incurred.
The Company  believes the accounting  change  provides for a better  matching of
revenues  and  expenses  and  enhances  the   comparability  of  it's  financial
statements  with those of other  companies  that follow the full-cost  method of
accounting.  The  $1,780,835  (or $0.23  basic and diluted  earnings  per share)
cumulative effect of the change in prior years (after reduction for income taxes
of $958,910) is included in income for the nine months ended September 30, 1998.

     Year 2000

     The Company has completed its assessment of the Year 2000 processing issues
of its internal  technology  systems,  including the  financial and  accounting,
production,  land and geological  computer systems and software  utilized by the
Company.  Due to the need for  improved  management  reporting,  the Company has
replaced its existing  finance and accounting and production  applications  with
new  software  which is year 2000  compliant.  The  company is in the process of
replacing  its land  software  application  with  software  which  is Year  2000
compliant.  Final conversion of the land application is expected to be completed
by November  30,  1999.  As of  September  30,  1999,  the Company has  incurred
approximately $206,000 converting to its new finance, accounting, production and
land system  software with a majority of the remaining  cost to replace the land
software to be incurred prior to November 30, 1999. These costs have been funded
from cash flows from  operations  and the cost of the new software and necessary
hardware upgrades have been  capitalized.  Future costs to address the Year 2000
issue are also  expected to be funded from cash flows from  operations,  and the
future  costs  of  new  software  and  hardware  upgrades  are  expected  to  be
capitalized.  Based on  assertions  made by vendors  and  systems  and  software
testing performed  internally,  the Company believes its geological  systems and
software  are  Year  2000   compliant.   The  Company  has  not  identified  any
non-information  technology  systems that have  embedded  technology on which it
relies and which it believes is likely to have a Year 2000 problem.

     The  Company is also in the process of  evaluating  the risk  presented  by
potential Year 2000  non-compliance  by third  parties.  Because such risks vary
substantially, companies are being contacted based on the estimated magnitude of
risk  posed to the  Company  by their  Year  2000  non-compliance.  The  Company
anticipates that these efforts will continue  through the end of 1999.  Although
it is not currently aware of any other reasonably  likely business  disruptions,
the Company is developing a contingency plan to address and assess the Year 2000
readiness of its material  suppliers,  customers and other  entities and expects
this work to be completed on or before November 30, 1999.

     The Company  believes that its most likely  worst-case  Year 2000 scenarios
are as follows: (i) shutdown of a portion of its purchaser pipelines which could
adversely  impact the  timing of  production  and  associated  cash  flow;  (ii)
unanticipated   Year  2000  failures  in   information   systems,   which  could
significantly   reduce  efficiencies  in  the  performance  of  normal  business
activities;  and (iii)  slow-downs  or  disruptions  in third party vendors that
provide  supplies and  services,  which could result in  operational  delays and
reduce   efficiencies  in  the   performance  in  normal  business   activities.
Contingency plans contemplated include: (i) the Company transporting its natural
gas  through  pipelines  of other  purchasers  that are Year 2000  compliant  or
shutting in production volumes until adequate


                                       18
<PAGE>

transportation is arranged. The Company has identified alternative  transporters
and marketers of its  production in each of its core operating  areas;  (ii) the
use of manual  procedures  to process  and  account  for normal  daily  business
activities;  and (iii) the use of alternative  hardware and software vendors and
customers as  appropriate in the event that a key vendor or customer is burdened
with a Year 2000  compliance  related  failure.  Should  any of these  Year 2000
failures occur,  there can be no assurance at this time that the consequences of
such a failure  will not have a  material  impact on the  Company's  results  of
operations, liquidity or financial condition.

     The Company's assessment of its Year 2000 issues involves many assumptions.
There can be no assurance that the Company's  assumptions  will prove  accurate,
and  actual  results  could  differ  significantly  from these  assumptions.  In
conducting its Year 2000 compliance efforts, the Company has relied primarily on
vendor  representations  with  respect  to  internal  computerized  systems  and
representations   from  third  parties  with  which  the  Company  has  business
relationships and has not independently verified  representations.  There can be
no assurance that these representations will prove accurate. A Year 2000 failure
could result in a business  interruption  that  adversely  affects the Company's
business,  financial  condition  or results of  operations.  The  Company is not
insured for this type of a loss should a loss occur.

    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  137").  SFAS 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.  Earlier application of SFAS No. 133
is encouraged,  but not prior to the beginning of any fiscal quarter that begins
after issuance of SFAS No. 137.

     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,  use of Offering proceeds, 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.

                                       19
<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................................

         (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  Incorporation  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           -- First  Amendment   to   Bylaws of the Company on September 28,
               1999

 3.3           -- Bylaws of the Company

10.1           -- Incentive  Plan of Edge  Petroleum  Corporation as Amended and
               Restated Effective as of July 27, 1999.

10.2           --  Edge   Petroleum   Corporation   Incentive   Plan   "Standard
               Non-Qualified   Stock  Option  Agreement"  by  and  between  Edge
               Petroleum Corporation and the Officers named therein.

10.3           --  Edge   Petroleum   Corporation   Incentive   Plan   "Director
               Non-Qualified   Stock  Option  Agreement"  by  and  between  Edge
               Petroleum Corporation and the Directors named therein.

10.4           -- Severance Agreements by and between Edge Petroleum Corporation
               and the Officers of the Company named therein.

11.1           -- Computation of Earnings Per Share.

27.1           -- Financial Data Schedule.

  + Incorporated by reference as indicated.

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

                                       20
<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           11/15/99              /S/         John W. Elias
--------------------------           --------------------------------------
                                                      John W. Elias
                                               Chief Executive Officer and
                                                  Chairman of the Board

Date           11/15/99              /S/         James D. Calaway
--------------------------           --------------------------------------
                                                     James D. Calaway
                                          President and Chief Operations Officer
                                                       and Director

Date           11/15/99              /S/         Michael G. Long
--------------------------           --------------------------------------
                                                     Michael G. Long
                                               Senior Vice President and
                                                Chief Financial Officer

Date           11/15/99              /S/         Brian C. Baumler
--------------------------           --------------------------------------
                                                     Brian C. Baumler
                                                Controller and Treasurer






















                                       21
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