**Exhibit99.2**

 

W.D. VON GOTNEN& CO

PETROLEUMENGINEERING

808 Travis, Suite812

Houston, TX 77002

(713) 224-6333 FAX(713) 224-6330

 

January 25, 2006

 

Mr. John Tugwell

Edge PetroleumCorporation

1301 Travis, Suite 2000

Houston, Texas 77002

 

|   | Re:    | Edge Petroleum  Corporation       |
|--------|--------|-----------------------------------|
|   |   | Mestena Grande  Properties        |
|   |   | “As of” January 1, 2006 |

 

Dear Mr. Tugwell:

 

At your request, we haveprepared estimates of the future reserves and projected net revenues for theMestena Grande Area property interests owned by Edge Petroleum Corporation(Edge), “As of” January 1, 2006. This report was prepared utilizing spot pricesas posted on December 31, 2005, as per SEC guidelines. The subject propertiesare located in Jim Hogg and Brooks Counties, Texas.

 

Our conclusions, asJanuary 1, 2006, are as follows:

 
| ** **                                   | ** ** | **Proved - Net to Edge Petroleum Corporation** | ** ** |
|----------------------------------------------|------------|------------------------------------------------|------------|
| ** **                                   | ** ** | **Proved Developed**                           | ** ** | **Proved** | ** ** | ** ** | ** ** |
| ** **                                   | ** ** | **Producing**                                  | ** ** | **Nonproducing** | ** ** | **Behindpipe** | ** ** | **Undeveloped** | ** ** | **Total** | ** ** |
| ** **                                   | ** ** | ** **                                     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Reserve  Estimates**                       |       |                                           |       |   |   |   |   |   |   |   |   |
| Oil/Cond., Mbbl                              |       | 286.1                                          |       | 27.4 |   | 0.9 |   | 234.7 |   | 549.0 |   |
| Gas, MMcf                                    |       | 19,861.6                                       |       | 1,684.1 |   | 72.2 |   | 14,677.1 |   | 36,295.0 |   |
| Gas Equivalent,  Mcfe                        |       | 21,578.3                                       |       | 1,848.4 |   | 77.3 |   | 16,085.2 |   | 39,589.1 |   |
|                                         |       |                                           |       |   |   |   |   |   |   |   |   |
| **Revenues**                                 |       |                                           |       |   |   |   |   |   |   |   |   |
| Oil, $(8.3)%                                 |       | 17,015,170                                     |       | 1,628,019 |   | 50,522 |   | 13,956,484 |   | 32,650,193 |   |
| Gas, $(91.7)%                                |       | 197,469,734                                    |       | 16,616,023 |   | 643,625 |   | 145,123,609 |   | 359,853,000 |   |
| Total, $                                     |       | **214,484,953**                                | ** ** | **18,244,043** | ** ** | **694,147** | ** ** | **159,080,109** | ** ** | **392,503,281** | ** ** |
|                                         |       |                                           |       |   |   |   |   |   |   |   |   |
| **Expenditures**                             |       |                                           |       |   |   |   |   |   |   |   |   |
| Ad Valorem Tax,  $                           |       | **5,116,507**                                  | ** ** | **423,074** | ** ** | **16,089** | ** ** | **3,688,845** | ** ** | **9,244,518** | ** ** |
| Severance Tax, $                             |       | **11,067,140**                                 | ** ** | **1,321,091** | ** ** | **50,596** | ** ** | **11,526,267** | ** ** | **23,965,092** | ** ** |
| Direct Operating  Expense, $                 |       | **32,584,098**                                 | ** ** | **2,564,290** | ** ** | **125,323** | ** ** | **21,681,967** | ** ** | **56,955,676** | ** ** |
| Total, $                                     |       | **48,767,746**                                 | ** ** | **4,308,455** | ** ** | **192,007** | ** ** | **36,897,082** | ** ** | **90,165,281** | ** ** |
|                                         |       | ** **                                     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Investments**                              |       |                                           |       |   |   |   |   |   |   |   |   |
| Total, $                                     |       | **0**                                          | ** ** | **1,987,614** | ** ** | **57,085** | ** ** | **40,290,211** | ** ** | **42,334,910** |   |
|                                         |       | ** **                                     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |   |
| **Estimated  Future Net Revenues(FNR)**      |       |                                           |       |   |   |   |   |   |   |   |   |
| Undiscounted FNR                             |       | **165,717,172**                                | ** ** | **11,947,976** | ** ** | **445,055** | ** ** | **81,892,805** | ** ** | **260,003,031** |   |
| FNR Disc. @ 10%                              |       | **121,322,055**                                | ** ** | **8,566,185** | ** ** | **208,530** | ** ** | **48,827,492** | ** ** | **178,924,234** |   |
|                                         |       |                                           |       |   |   |   |   |   |   |   |   |
| **Allocation  Percentage by Classification** |       |                                           |       |   |   |   |   |   |   |   |   |
| FNR Disc. @ 10%                              |       | 67.8                                           | %          | 4.8 | % | 0.1 | % | 27.3 | % | 100.0 | % |

 

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###### **Report Qualifications**

 

**Purpose of Report**– The purpose of this report is to provide Edge with a projection of futurereserves and revenues, which can be attributed to the Mestena Grande Area oiland gas properties owned by Edge.

 

**Scope of Work**–W.D. Von Gonten & Co. was engaged by Edge to estimate and project thefuture reserves associated with the various properties included in this report.Once the reserves were estimated, future revenue projections were made based ona SEC constant price deck as requested by Edge.

 

**Reporting Requirements**– Securities and Exchange Commission (SEC) Regulation S-K, Item 102 andRegulation S-X, Rule 4-10, and Financial Accounting Standards Board (FASB)Statement No. 69 require oil and gas reserve information to be reported bypublicly held companies as supplemental financial data. These regulations andstandards provide for estimates of Proved reserves and revenues discounted at10% and based on unescalated prices and costs. Revenues based on escalatedproduct prices may be reported in addition to the current pricing case. Probablereserves are prohibited from use for SEC reporting purposes and should beexcluded from such filings.

 

The Society of Petroleum Engineers (SPE) requiresProved reserves to be economically recoverable with prices and costs in effecton the “as of” date of the report. In addition, the SPE has issued *Standards Pertaining to the Estimating and Auditing of Oil and GasReserve Information,*which sets requirements for the qualificationsand independence of reserve estimators and auditors.

 

The estimated Proved reserves have been prepared inconformance with all SEC, SPE, and World Petroleum Congress (WPC) definitionsand requirements.

 

**Projections**–The attached reserve and revenue projections are on a calendar year basis withthe first time period being January 1, 2006 through December 31, 2006.

 

**Reserve Estimates**

 

**MesteñaGrande Area** – The Mesteña Grande Area is located in JimHogg County, Texas with production primarily from the Queen City Sand. MesteñaInc. and Edge are the operators of the 62 producing wells in the area of whichEdge owns an interest.

 

Edge and Mesteña drilleda total of 24 new Queen City Wells in 2005. At yearend, 21 of the 24 wereproducing. This increase in drilling activity has substantially increased theestimated recoverable reserves associated with the Queen City Reservoir. Thisproperty set exited 2004 with a total gross production rate of 19.0 MMcf/day. Thecurrent 2005 exit rate is +/- 30.0 MMcf/day.

 

Reserve estimates for the producing properties werebased on a combination of 1) Extrapolation of monthly production histories, 2)Material Balance Calculations, 3) Volumetric Calculations, and 4) Analogy tooffset production. Queen City wells decline in a hyperbolic nature as would beexpected from a fractured tite gas reservoir. This hyperbolic trend has beenobserved in wells throughout the Queen City Trend, and a decline analogy hasbeen utilized to aid in projecting remaining reserves. In all wells the futureproduction performance was extrapolated from the daily production historieswhere both gas production and tubing pressures were analyzed.

 

All projected reserve estimates, for the wellsproducing from the Queen City Sand, were verified for “reasonableness” byoverlaying the reserves onto a hydrocarbon pore volume map. W.D. Von Gonten& Co. has prepared this hydrocarbon pore volume map as part of an extensivefield study that we have performed on the Queen City Formation in the MesteñaGrande Area.

 

Reserve estimates for theProved Undeveloped locations were based on a combination of analogy, volumetrics,and material balance. Undeveloped locations were assigned in areas that arewithin the 

 

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seismic anomaly of “productivearea” but outside of the drainage area of the current producing wells. Further,recent bottomhole pressure information was evaluated to verify that theadditional reserves were present.

 

The Queen City is a package of tite gas depletiondrive reservoirs. The study involved correlating more than 100 digital logswith both conventional and sidewall cores. This correlation allowed for adepiction of reservoir quality on a well-by-well basis. Analysis was also doneon production tests before and after fracture jobs, and completion informationin order to better understand the producing characteristics of the sands. Ourconclusions indicate that there is a direct relationship between hydrocarbonpore volume and the productivity of the wells. Therefore, the proximity ofindividual wells to areas of high hydrocarbon pore volume correlates to theultimate reserves assigned to each well in the Queen City Sand.

 

**Reserves and schedules ofproduction included in this report are only estimates. The amount of availabledata, reservoir and geological complexity, reservoir drive mechanism, andmechanical aspects can have a material effect on the accuracy of these reserveestimates.**

 

**Product Prices**

 

The estimated revenues shown herein were based on theeffective NYMEX spot prices on December 31, 2005 of $61.04 per barrel of oiland $10.05 per MMBtu of gas.

 

Oil pricing differentials were applied on anindividual property basis to reflect actual prices received at the wellheadversus the NYMEX spot price. These differentials were calculated from comparingthe South Texas Light Posting plus the P+ bonus with the NYMEX spot price.Pricing differentials account for transportation and processing costs,geographical differentials, quality adjustments, and any marketing bonus ordeduction.

 

Gas prices have been adjusted according to thepurchase contracts in place for the specific gas stream. The differentialapplied to each well from the NYMEX spot price was estimated by comparing theHouston Ship Channel daily and monthly indexes to the equivalent Henry HubIndex and accounting for the 2% transportation deduction. Quality adjustmentshave been applied based on actual BTU factors for each well. A shrinkage factorhas been applied based on production volumes versus actual sales volumes, thisshrinkage accounts for any line loss or fuel usage before the actual salespoint.

 

Gas transportation andcompression fees were included as a deduction from the gas price and assignedon a per Mcf basis based on contractual agreements.

 

Where no data wasavailable, estimated differentials, BTU’s, and shrinkages were assigned basedon analogy to pricing differentials utilized in similar producing regions.

 

All prices have beenheld constant throughout the life of the properties.

 

**Operating and Capital Costs**

 

The monthly expensenecessary to operate each well was estimated based on the average of the last12 month historical Joint Interest Billing Statements as supplied by Edge. Thesestatements date from October 2004 through September 2005.

 

Capital costs necessaryto perform drilling, workover and/or remedial operations were supplied by Edgein the form of detailed AFE’s.

 

All operating andcapital costs have been held constant throughout the life of the properties.

 

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**Other Considerations**

 

**AbandonmentCosts** – The cost necessary to abandon the properties wereassigned an expense of zero due to the credit of the salvage value of thesurface and subsurface equipment. This was verified with the abandonment of theLibre Nos. 3 & 5 in 2004. Both wells were abandoned and the credit from theequipment exceeded the costs.

 

**AdditionalCosts**– Costs were not deducted for depletion,depreciation and/or amortization (a non-cash item), or federal income tax.

 

**DataSources**– Data furnished by Edge included basic wellinformation, operating cost, ownership, pricing, and production information oncertain leases. The remaining production histories were taken from IHS Energydata archives.

 

**Context**– We specifically advise that any particular reserve estimate for a specificproperty not be used out of context with the overall report. ***The revenues and present worth of future netrevenues are not represented to be market value either for individualproperties or on a total property basis.***

 

Wehave not inspected the properties included in this report, nor have weconducted independent well tests. W.D. Von Gonten & Co. and our employeeshave no direct ownership in any of the properties included in this report. Ourfees are based on hourly expense and are not related to the reserve and revenueestimates produced in this report.

 

Thank you for theopportunity to work with Edge on this project.

 
|   | Respectfully submitted,           |
|--------|-----------------------------------|
|   |                              |
|   |                              |
|   | /s/ William D. Von  Gonten, Jr.   |   |
|   | William  D. Von Gonten, Jr., P.E. |
|   | TX# 73244                         |

 

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