**EXHIBIT99.1**

March 15, 2005

 

Edge PetroleumCorporation

1301 Travis Street, Suite2000

Houston, Texas  77002

 

Gentlemen:

 

At your request, we haveprepared an estimate of the reserves, future production, and incomeattributable to certain leasehold and royalty interests of Edge PetroleumCorporation (Edge) as of December 31, 2004. The subject properties are located in the states of Alabama,Louisiana,  Michigan,  Mississippi, New Mexico, and Texas.  The income data were estimated using theSecurities and Exchange Commission (SEC) guidelines for future price and costparameters.

 

The estimated reservesand future income amounts presented in this report are related to hydrocarbonprices.  December 31, 2004 hydrocarbonprices were used in the preparation of this report as required by SECguidelines; however, actual future prices may vary significantly from December31, 2004 prices.  Therefore, volumes ofreserves actually recovered and amounts of income actually received may differsignificantly from the estimated quantities presented in this report.  The results of this study are summarizedbelow.

 

**SECPARAMETERS**

Estimated NetReserves and Income Data

Certain Leaseholdand Royalty Interests of

**EdgePetroleum Corporation**

As of December 31,2004

 
| ** **                     | ** ** | **Proved**    | ** ** |
|--------------------------------|------------|---------------|------------|
| ** **                     | ** ** | **Developed** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                     | ** ** | **Producing** | ** ** | **Non-Producing** | ** ** | **Undeveloped** | ** ** | **Total  Proved** | ** ** |
| ***Net  Remaining Reserves***  |       |          |       |   |   |   |   |   |   |
| Oil/Condensate –  Barrels |       | 723,512       |       | 537,798 |   | 470,018 |   | 1,731,328 |   |
| Plant Products -  Barrels      |       | 842,484       |       | 411,067 |   | 515,758 |   | 1,769,309 |   |
| Gas – MMCF                |       | 23,481        |       | 13,787 |   | 9,124 |   | 46,392 |   |
|                           |       |          |       |   |   |   |   |   |   |
| ***Income  Data ($M)***        |       |          |       |   |   |   |   |   |   |
| Future Gross  Revenue          |       | $             | 175,825.7  |   | $ | 103,532.3 |   | $ | 79,927.1 |   | $ | 359,285.1 |   |
| Deductions                     |       | 39,346.6      |       | 14,671.1 |   | 24,104.3 |   | 78,122.0 |   |
| Future Net  Income (FNI)       |       | $             | 136,479.1  |   | $ | 88,861.2 |   | $ | 55,822.8 |   | $ | 281,163.1 |   |
|                           |       |          |       |   |   |   |   |   |   |
| Discounted FNI @  10%          |       | $             | 101,506.9  |   | $ | 48,295.3 |   | $ | 37,850.6 |   | $ | 187,652.8 |   |

 

Liquid hydrocarbons areexpressed in standard 42 gallon barrels. All gas volumes are sales gas expressed in millions of cubic feet (MMCF)at the official temperature and pressure bases of the areas in which the gasreserves are located.

 

----

 

The future gross revenueis after the deduction of production taxes. The deductions are comprised of the normal direct costs of operating thewells, ad valorem taxes, recompletion costs, and development costs.  The future net income is before the deductionof state and federal income taxes and general administrative overhead, and hasnot been adjusted for outstanding loans that may exist nor does it include anyadjustment for cash on hand or undistributed income.  No attempt was made to quantify or otherwiseaccount for any accumulated gas production imbalances that may exist.  Gas reserves account for approximately 75percent and liquid hydrocarbon reserves account for the remaining 25 percent oftotal future gross revenue from proved reserves.

 

The discounted future netincome shown above was calculated using a discount rate of 10 percent per annumcompounded monthly.  Future net income wasdiscounted at four other discount rates which were also compoundedmonthly.  These results are shown on eachestimated projection of future production and income presented in a latersection of this report and in summary form below.

 
| ** **                   | ** ** | **Discounted Future Net Income ($M)  As of December 31, 2004** | ** ** |
|------------------------------|------------|----------------------------------------------------------------|------------|
| **Discount Rate****Percent** | ** ** | **Total****Proved**                                            | ** ** |
|                         |       |                                                           |       |
| 12                           |       | $                                                              | 176,910.0  |   |
| 15                           |       | $                                                              | 163,339.9  |   |
| 20                           |       | $                                                              | 145,586.2  |   |
| 25                           |       | $                                                              | 131,958.6  |   |

 

The results shown aboveare presented for your information and should not be construed as our estimateof fair market value.

 

***ReservesIncluded in This Report***

 

The proved reservesincluded herein conform to the definition as set forth in the Securities andExchange Commission’s Regulation S-X Part 210.4-10 (a) as clarified bysubsequent Commission Staff Accounting Bulletins.  The definitions of proved reserves areincluded in the section entitled “Petroleum Reserves Definitions” which isattached with this report.

 

Because of the directrelationship between volumes of proved undeveloped reserves and developmentplans, we include in the proved undeveloped category only reserves assigned toundeveloped locations that we have been assured will definitely be drilled, andreserves assigned to the undeveloped portions of secondary or tertiary projectswhich we have been assured will definitely be developed.

 

The proved developednon-producing reserves included herein are comprised of shut-in and behind pipecategories.  The various reserve statuscategories are defined in the section entitled “Petroleum Reserves Definitions”which is attached with this report.

 

***Estimatesof Reserves***

 

In general, the reservesincluded herein were estimated by performance methods or the volumetric method;however, other methods were used in certain cases where characteristics of thedata indicated such other methods were more appropriate in our opinion.  The reserves estimated by the performancemethod utilized extrapolations of various historical data in those cases wheresuch data were definitive.  Reserves wereestimated by the volumetric method in those cases where there

 

2

----

 

were inadequate historical performance data to establish a definitivetrend or where the use of production performance data as a basis for the reserveestimates was considered to be inappropriate.

 

The reserves included inthis report are estimates only and should not be construed as being exactquantities.  They may or may not beactually recovered, and if recovered, the revenues therefrom and the actualcosts related thereto could be more or less than the estimated amounts.  Moreover, estimates of reserves may increaseor decrease as a result of future operations.

 

***FutureProduction Rates***

 

Initial production ratesare based on the current producing rates for those wells now onproduction.  Test data and other relatedinformation were used to estimate the anticipated initial production rates forthose wells or locations which are not currently producing.  If no production decline trend has beenestablished, future production rates were held constant, or adjusted for theeffects of curtailment where appropriate, until a decline in ability to producewas anticipated.  An estimated rate ofdecline was then applied to depletion of the reserves.  If a decline trend has been established, thistrend was used as the basis for estimating future production rates.  For reserves not yet on production, saleswere estimated to commence at an anticipated date furnished by Edge.

 

The future productionrates from wells now on production may be more or less than estimated becauseof changes in market demand or allowables set by regulatory bodies.  Wells or locations which are not currentlyproducing may start producing earlier or later than anticipated in ourestimates of their future production rates.

 

***HydrocarbonPrices***

 

Edge furnished us withhydrocarbon prices in effect at December 31, 2004 and with its forecasts offuture prices which take into account SEC and Financial Accounting StandardsBoard (FASB) rules, current market prices, contract prices, and fixed anddeterminable price escalations where applicable.

 

In accordance with FASBStatement No. 69, December 31, 2004 market prices were determined using thedaily oil price or daily gas sales price (“spot price”) adjusted for oilfieldor gas gathering hub and wellhead price differences (e.g. grade,transportation, gravity, sulfur and BS&W) as appropriate.  Also in accordance with SEC and FASBspecifications, changes in market prices subsequent to December 31, 2004 were notconsidered in this report.

 

For hydrocarbon productssold under contract, the contract price including fixed and determinableescalations, exclusive of inflation adjustments, was used until expiration ofthe contract.  Upon contract expiration,the price was adjusted to the current market price for the area and held atthis adjusted price to depletion of the reserves.

 

***Costs***

 

Operating costs for theleases and wells in this report are based on information provided by Edge andinclude only those costs directly applicable to the leases or wells.  When applicable, the operating costs includea portion of general and administrative costs allocated directly to the leasesand wells under terms of operating agreements. No deduction was made for indirect costs such as general administrationand overhead expenses, loan repayments, interest expenses, and exploration anddevelopment prepayments that are not charged directly to the leases or wells.

3

----

 

Development costs werefurnished to us by Edge and are based on authorizations for expenditure for theproposed work or actual costs for similar projects.  The estimated net cost of abandonment aftersalvage was included for properties where abandonment costs net of salvage are significant.  At the request of Edge, their estimate ofzero abandonment costs after salvage value for onshore properties was used inthis report.  Ryder Scott has notperformed a detailed study of the abandonment costs nor the salvage value andmakes no warranty for Edge’s estimate.

 

Current costs were heldconstant throughout the life of the properties.

 

***General***

 

While it may reasonablybe anticipated that the future prices received for the sale of production andthe operating costs and other costs relating to such production may alsoincrease or decrease from existing levels, such changes were, in accordancewith rules adopted by the SEC, omitted from consideration in making thisevaluation.

 

The estimates of reservespresented herein were based upon a detailed study of the properties in which Edgeowns an interest; however, we have not made any field examination of theproperties.  No consideration was givenin this report to potential environmental liabilities which may exist nor wereany costs included for potential liability to restore and clean up damages, ifany, caused by past operating practices. Edge has informed us that they have furnished us all of the accounts,records, geological and engineering data, and reports and other data requiredfor this investigation.  The ownershipinterests, prices, and other factual data furnished by Edge were acceptedwithout independent verification.  Theestimates presented in this report are based on data available through December2004.

 

Edgehas assured us of their intent and ability to proceed with the developmentactivities included in this report, and that they are not aware of any legal,regulatory or political obstacles that would significantly alter their plans.

 

Neither we nor any of ouremployees have any interest in the subject properties and neither theemployment to make this study nor the compensation is contingent on ourestimates of reserves and future income for the subject properties.

 

This report was preparedfor the exclusive use and sole benefit of Edge Petroleum Corporation.  The data, work papers, and maps used in thisreport are available for examination by authorized parties in our offices.  Please contact us if we can be of furtherservice.

 
|   | Very truly yours,             |
|--------|-------------------------------|
|   |                          |
|   | **RYDER SCOTT COMPANY, L.P.** |
|   |                          |
|   |                          |
|   | Michael F. Stell, P.E.        |
|   | Senior Vice President         |

 

MFS/sw

4

----

 

**PETROLEUMRESERVES DEFINITIONS**

 

**SECURITIESAND EXCHANGE COMMISSION**

 

**INTRODUCTION**

 

Reserves are thosequantities of petroleum which are anticipated to be commercially recovered fromknown accumulations from a given date forward. All reserve estimates involve some degree of uncertainty.  The uncertainty depends chiefly on the amountof reliable geologic and engineering data available at the time of the estimateand the interpretation of these data. The relative degree of uncertainty may be conveyed by placing reservesinto one of two principal classifications, either proved or unproved.  Unproved reserves are less certain to berecovered than proved reserves and may be further sub-classified as probableand possible reserves to denote progressively increasing uncertainty in theirrecoverability.  It should be noted thatSecurities and Exchange Commission Regulation S-K prohibits the disclosure ofestimated quantities of probable or possible reserves of oil and gas and anyestimated value thereof in any documents publicly filed with the Commission.

 

Reserves estimates willgenerally be revised as additional geologic or engineering data becomeavailable or as economic conditions change. Reserves do not include quantities of petroleum being held in inventory,and may be reduced for usage or processing losses if required for financialreporting.

 

Reserves may beattributed to either natural energy or improved recovery methods.  Improved recovery methods include all methodsfor supplementing natural energy or altering natural forces in the reservoir toincrease ultimate recovery.  Examples ofsuch methods are pressure maintenance, cycling, waterflooding, thermal methods,chemical flooding, and the use of miscible and immiscible displacementfluids.  Other improved recovery methodsmay be developed in the future as petroleum technology continues to evolve.

 

**PROVED RESERVES  (SEC DEFINITIONS)**

 

Securities and ExchangeCommission Regulation S-X Rule 4-10 paragraph (a) defines proved reserves asfollows:

 

***Provedoil and gas reserves****.  Proved oil and gas reserves are the estimatedquantities of crude oil, natural gas, and natural gas liquids which geologicaland engineering data demonstrate with reasonable certainty to be recoverable infuture years from known reservoirs under existing economic and operatingconditions, i.e., prices and costs as of the date the estimate is made.  Prices include consideration of changes inexisting prices provided only by contractual arrangements, but not on escalationsbased upon future conditions.*

 

*(i)Reservoirs are considered proved if economic producibility is supported byeither actual production or conclusive formation test.  The area of a reservoir considered provedincludes:*

 

*(A) thatportion delineated by drilling and defined by gas-oil and/or oil-watercontacts, if any; and*

 

*(B) theimmediately adjoining portions not yet drilled, but which can be reasonablyjudged as economically productive on the basis of available geological andengineering data.  In the absence ofinformation on fluid contacts, the lowest known structural occurrence ofhydrocarbons controls the lower proved limit of the reservoir.*

 

----

 

*(ii)Reserves which can be produced economically through application of improvedrecovery techniques (such as fluid injection) are included in the “proved”classification when successful testing by a pilot project, or the operation ofan installed program in the reservoir, provides support for the engineeringanalysis on which the project or program was based.*

 

*(iii)Estimates of proved reserves do not include the following:*

 

*(A) oilthat may become available from known reservoirs but is classified separately as“indicated additional reserves”;*

 

*(B) crudeoil, natural gas, and natural gas liquids, the recovery of which is subject toreasonable doubt because of uncertainty as to geology, reservoircharacteristics, or economic factors;*

 

*(C) crudeoil, natural gas, and natural gas liquids, that may occur in undrilledprospects; and*

 

*(D) crudeoil, natural gas, and natural gas liquids, that may be recovered from oilshales, coal, gilsonite and other such sources.*

 

***Proveddeveloped oil and gas reserves****.  Proved developed oil and gas reserves arereserves that can be expected to be recovered through existing wells withexisting equipment and operating methods. Additional oil and gas expected to be obtained through the applicationof fluid injection or other improved recovery techniques for supplementing thenatural forces and mechanisms of primary recovery should be included as “proveddeveloped reserves” only after testing by a pilot project or after theoperation of an installed program has confirmed through production responsethat increased recovery will be achieved.*

 

***Provedundeveloped reserves****.  Proved undeveloped oil and gasreserves are reserves that are expected to be recovered from new wells onundrilled acreage, or from existing wells where a relatively major expenditureis required for recompletion.  Reserveson undrilled acreage shall be limited to those drilling units offsettingproductive units that are reasonably certain of production when drilled.  Proved reserves for other undrilled units canbe claimed only where it can be demonstrated with certainty that there iscontinuity of production from the existing productive formation.  Under no circumstances should estimates forproved undeveloped reserves be attributable to any acreage for which anapplication of fluid injection or other improved recovery technique iscontemplated, unless such techniques have been proved effective by actual testsin the area and in the same reservoir.*

 

Certain Staff AccountingBulletins published subsequent to the promulgation of Regulation S-X have dealtwith matters relating to the application of financial accounting and disclosurerules for oil and gas producing activities. In particular, the following interpretations extracted from StaffAccounting Bulletins set forth the Commission staff’s view on specificquestions pertaining to proved oil and gas reserves.

 

*Economicproducibility of estimated proved reserves can be supported to the satisfactionof the Office of Engineering if geological and engineering data demonstratewith reasonable certainty that those reserves can be recovered in future yearsunder existing economic and operating conditions.  The relative importance of the many pieces ofgeological and engineering data which should be evaluated when classifyingreserves cannot be identified in advance. In certain instances, proved reserves may be assigned to reservoirs onthe basis of a combination of electrical and other type logs and core analyseswhich indicate the reservoirs are analogous to similar reservoirs in the samefield which are producing or have demonstrated the ability to produce on aformation test.  (extracted from SAB-35)*

2

----

 

*Indetermining whether “proved undeveloped reserves” encompass acreage on whichfluid injection (or other improved recovery technique) is contemplated, is itappropriate to distinguish between (i) fluid injection used for pressuremaintenance during the early life of a field and (ii) fluid injection used toeffect secondary recovery when a field is in the late stages of depletion?  ... The Office of Engineering believes that thedistinction identified in the above question may be appropriate in a fewlimited circumstances, such as in the case of certain fields in the NorthSea.  The staff will review estimates ofproved reserves attributable to fluid injection in the light of the strength ofthe evidence presented by the registrant in support of a contention thatenhanced recovery will be achieved. (extracted from SAB-35)*

 

*Companiesshould report reserves of natural gas liquids which are net to their leaseholdinterest, i.e., that portion recovered in a processing plant and allocated tothe leasehold interest.  It may beappropriate in the case of natural gas liquids not clearly attributable toleasehold interests ownership to follow instruction (b) of Item 2(b)(3) ofRegulation S-K and report such reserves separately and describe the nature ofthe ownership. (extracted from SAB-35)*

 

*The staffbelieves that since coalbed methane gas can be recovered from coal in itsnatural and original location, it should be included in proved reserves,provided that it complies in all other respects with the definition of provedoil and gas reserves as specified in Rule 4-10(a)(2) including the requirementthat methane production be economical at current prices, costs, (net of the taxcredit) and existing operating conditions. (extracted from SAB-85)*

* *

Statements in StaffAccounting Bulletins are not rules or interpretations of the Commission nor arethey published as bearing the Commission’s official approval; they representinterpretations and practices followed by the Division of Corporation Financeand the Office of the Chief Accountant in administering the disclosurerequirements of the Federal securities laws.

 

**SUB-CATEGORIZATION OF DEVELOPEDRESERVES  (SPE/WPC DEFINITIONS)**

 

In accordance withguidelines adopted by the Society of Petroleum Engineers (SPE) and the WorldPetroleum Congress (WPC), developed reserves may be sub-categorized asproducing or non-producing.

 

***Producing****. *Reservessub-categorized as producing are expected to be recovered from completionintervals which are open and producing at the time of the estimate.  Improved recovery reserves are considered producingonly after the improved recovery project is in operation.

 

***Non-Producing.**** *Reservessub-categorized as non-producing include shut-in and behind pipe reserves.  Shut-in reserves are expected to be recoveredfrom (1) completion intervals which are open at the time of  the estimate but  which have not  started producing,  (2)  wells which were shut-in awaiting pipeline connections or as a result of a marketinterruption, or (3) wells not capable of production for mechanicalreasons.  Behind pipe reserves areexpected to be recovered from zones in existing wells, which will requireadditional completion work or future recompletion prior to the start ofproduction.

 

3

----