Common use of FINANCIAL INTERESTS OF OFFICERS AND DIRECTORS IN PARTNERSHIPS Clause in Contracts

FINANCIAL INTERESTS OF OFFICERS AND DIRECTORS IN PARTNERSHIPS. The officers and directors of Pioneer USA and Pioneer have no financial or equity interests in the partnerships described in this document. See "Ownership of Partnership Interests" on page 44. Scotx X. Xxxxxxxxx, Xxairman of the Board, President and Chief Executive Officer of Pioneer and President of Pioneer USA, and Mark X. Xxxxxxx, Xxecutive Vice President, General Counsel and Secretary of each of Pioneer and Pioneer USA, own partnership interests in some of the 13 privately-held employee partnerships that Pioneer is offering to acquire at the same time it acquires the partnerships described in this document. INDIVIDUAL PARTNERSHIP'S PERSPECTIVE NOT CONSIDERED IN MERGERS Pioneer USA serves as the managing or sole general partner for all of the partnerships and did not view the mergers solely from the perspective of a single partnership. Each partnership is governed by its own partnership agreement, the terms of which may or may not be similar to the terms of the partnership agreements of the other partnerships. Consequently, in determining the terms and conditions of the mergers, Pioneer USA may have advocated positions which would be in the best interest of one of the partnerships at the expense of another. If each of the partnerships had separate general partners, these general partners would have had totally independent perspectives, not affected by a consideration of the interests of any of the other partnerships, which may have led them to advocate positions during the structuring of the mergers different than those taken by Pioneer USA. THE PARTNERSHIPS PAY OPERATOR FEES TO PIONEER USA Pioneer USA operates most of the partnerships' wellx. Xxch partnership has entered into one or more standard industry operating agreements with Pioneer USA. Those operating agreements establish the base fee paid by the partnership to Pioneer USA for its lease operating services. That base fee increases annually based on a rate established by the Counsel of Petroleum Accountants Society, or COPAX, xxr the oil and gas industry. OWNERSHIP OF PARTNERSHIP INTERESTS Pioneer does not directly own any partnership interests in the partnerships. Pioneer beneficially owns all of Pioneer USA's partnership interests in the partnerships. Table 6 of Appendix A to this document contains the voting percentage as of August 1, 1999, of the outstanding partnership interests for each partnership that are beneficially owned by Pioneer USA as a limited partner. As of August 1, 1999, no person or entity known by Pioneer USA beneficially owns more than 5% of the outstanding partnership interests in any partnership, except in Parkxx & Xarsxxx 00-I, Ltd. There, Pioneer USA repurchased partnership interests equal to $1,188,500, representing a 10.07% beneficial ownership of the partnership interests in that partnership. Pioneer USA has sole investment and voting power with respect to partnership interests it beneficially owns. Except as set forth above, none of Pioneer, Pioneer USA, or, to the knowledge of Pioneer USA, any of their directors or executive officers, or any associate or subsidiary of Pioneer, Pioneer USA or any such director or officer: - beneficially owns any partnership interests of the partnerships; or - has effected any transactions in any partnership interests of the partnerships during the past 60 days.