Common use of Selected Financial Data Clause in Contracts

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- OPERATING RESULTS: Oil and gas sales.............. $ 583,396 $ 856,926 $1,132,944 $ 932,815 $ 982,923 ========== ========== ========== ========== ========== Impairment of oil and gas properties.................. $ 306,826 $ 531,929 $ -- $ 692,515 $ -- ========== ========== ========== ========== ========== Net income (loss).............. $ (444,718) $ (269,363) $ 488,019 $ (589,248) $ 119,039 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... $ (4,447) $ (2,693) $ 4,880 $ (5,893) $ 1,304 ========== ========== ========== ========== ========== Limited partners............ $ (440,271) $ (266,670) $ 483,139 $ (583,355) $ 117,735 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ $ (52.94) $ (32.06) $ 58.09 $ (70.14) $ 14.16 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ $ 28.57 $ 62.59 $ 68.92 $ 56.70 $ 63.80 ========== ========== ========== ========== ========== AT YEAR END: Total assets................... $1,392,439 $2,099,131 $2,890,740 $3,021,200 $4,042,199 ========== ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $583,396 from $856,926 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 barrels of oil, 12,847 barrels of natural gas liquids ("NGLs") and 62,751 mcf of gas were sold, or 52,390 barrel of oil equivalents ("BOEs"). In 1997, 30,029 barrels of oil, 6,032 barrels of NGLs and 92,294 mcf of gas were sold, or 51,443 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- OPERATING RESULTS: Oil and gas sales.............. $ 583,396 $ 856,926 764,787 $1,132,944 $ 932,815 $ 982,923 1,118,628 $1,382,265 $1,160,419 $1,266,515 ========== ========== ========== ========== ========== Impairment of oil and gas properties.................. $ 306,826 275,430 $ 531,929 328,594 $ -- 22,474 $ 692,515 115,434 $ -- ========== ========== ========== ========== ========== Net income (loss).............. $ (444,718373,956) $ (269,36355,191) $ 488,019 544,919 $ (589,248) 181,451 $ 119,039 229,524 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... $ (4,4473,740) $ (2,693552) $ 4,880 5,449 $ (5,893) 1,852 $ 1,304 2,345 ========== ========== ========== ========== ========== Limited partners............ $ (440,271370,216) $ (266,67054,639) $ 483,139 539,470 $ (583,355) 179,599 $ 117,735 227,179 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ $ (52.9431.12) $ (32.064.59) $ 58.09 45.35 $ (70.14) 15.10 $ 14.16 19.10 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ $ 28.57 23.66 $ 62.59 52.38 $ 68.92 56.21 $ 56.70 48.84 $ 63.80 53.88 ========== ========== ========== ========== ========== AT YEAR END: Total assets................... $1,392,439 2,057,408 $2,099,131 2,727,510 $2,890,740 3,402,932 $3,021,200 3,580,821 $4,042,199 3,947,513 ========== ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $583,396 764,787 from $856,926 1,118,628 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 41,140 barrels of oil, 12,847 17,403 barrels of natural gas liquids ("NGLs") and 62,751 73,460 mcf of gas were sold, or 52,390 70,786 barrel of oil equivalents ("BOEs"). In 1997, 30,029 42,270 barrels of oil, 6,032 6,929 barrels of NGLs and 92,294 100,068 mcf of gas were sold, or 51,443 65,877 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- OPERATING RESULTS: Oil and gas sales.............. $ 583,396 430,499 $ 856,926 $1,132,944 661,475 $ 932,815 837,849 $ 982,923 722,324 $ 804,039 ========== ========== ========== ========== ========== Impairment of oil and gas properties.................. $ 306,826 185,784 $ 531,929 79,288 $ -- $ 692,515 48,088 $ -- ========== ========== ========== ========== ========== Net income (loss).............. $ (444,718258,625) $ (269,363) 105,740 $ 488,019 359,349 $ (589,248) 163,626 $ 119,039 152,612 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... $ (4,4472,586) $ (2,693) 1,057 $ 4,880 3,593 $ (5,893) 1,668 $ 1,304 1,558 ========== ========== ========== ========== ========== Limited partners............ $ (440,271256,039) $ (266,670) 104,683 $ 483,139 355,756 $ (583,355) 161,958 $ 117,735 151,054 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ $ (52.9434.00) $ (32.06) 13.90 $ 58.09 47.24 $ (70.14) 21.51 $ 14.16 20.06 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ $ 28.57 17.30 $ 62.59 47.53 $ 68.92 51.98 $ 56.70 45.34 $ 63.80 51.71 ========== ========== ========== ========== ========== AT YEAR END: Total assets................... $1,392,439 1,011,034 $2,099,131 1,411,804 $2,890,740 1,661,127 $3,021,200 1,728,891 $4,042,199 1,886,057 ========== ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 3235% to $583,396 430,499 from $856,926 661,475 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 24,493 barrels of oil, 12,847 8,694 barrels of natural gas liquids ("NGLs") and 62,751 30,348 mcf of gas were sold, or 52,390 38,245 barrel of oil equivalents ("BOEs"). In 1997, 30,029 25,817 barrels of oil, 6,032 3,661 barrels of NGLs and 92,294 50,304 mcf of gas were sold, or 51,443 37,862 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- --------- ---------- ---------- ---------- ---------- OPERATING RESULTS: Oil and gas sales.............. ............. $ 583,396 392,883 $ 856,926 $1,132,944 608,207 $ 932,815 710,173 $ 982,923 613,929 $ 636,470 ========= ========== ========== ========== ========== Litigation settlement, net.... $ -- $ -- $ 43,618 $ -- $ -- ========= ========== ========== ========== ========== Impairment of oil and gas properties.................. ................. $ 306,826 294,610 $ 531,929 165,201 $ 2,277 $ 20,719 $ -- $ 692,515 $ -- ========== ========== ========== ========== ========== Net income (loss).............. $ ............. $(444,718563,993) $ (269,36360,847) $ 488,019 312,582 $ (589,248) 34,081 $ 119,039 =102,033 ========= ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... General partners........... $ (4,44749,472) $ (2,693) 31,736 $ 4,880 92,811 $ (5,893) 35,122 $ 1,304 =45,462 ========= ========== ========== ========== ========== Limited partners............ $ ........... $(440,271514,521) $ (266,67092,583) $ 483,139 219,771 $ (583,3551,041) $ 117,735 =56,571 ========= ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ ....... $ (52.94105.20) $ (32.0618.93) $ 58.09 44.93 $ (70.14.21) $ 14.16 =11.57 ========= ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ ....... $ 28.57 19.57 $ 62.59 47.31 $ 68.92 51.40(a) $ 56.70 40.96 $ 63.80 =31.92 ========= ========== ========== ========== ========== AT YEAR END: Total assets................... .................. $ 474,528 $1,392,439 1,158,135 $2,099,131 1,526,765 $2,890,740 1,585,711 $3,021,200 $4,042,199 =1,786,274 ========= ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $583,396 from $856,926 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 barrels of oil, 12,847 barrels of natural gas liquids ("NGLs") and 62,751 mcf of gas were sold, or 52,390 barrel of oil equivalents ("BOEs"). In 1997, 30,029 barrels of oil, 6,032 barrels of NGLs and 92,294 mcf of gas were sold, or 51,443 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).---------------

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- OPERATING RESULTS: Oil and gas sales.............. $ 583,396 443,496 $ 856,926 $1,132,944 753,775 $ 932,815 938,418 $ 982,923 754,343 $ 787,939 ========== ========== ========== ========== ========== Impairment of oil and gas properties.................. $ 306,826 -- $ 531,929 6,231 $ -- $ 692,515 369,426 $ -- ========== ========== ========== ========== ========== Net income (loss).............. $ (444,71813,621) $ 255,412 $ 424,569 $ (269,363225,390) $ 488,019 $ (589,248) $ 119,039 37,254 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... $ (4,447136) $ 2,554 $ 4,246 $ (2,6932,253) $ 4,880 $ (5,893) $ 1,304 373 ========== ========== ========== ========== ========== Limited partners............ $ (440,27113,485) $ 252,858 $ 420,323 $ (266,670223,137) $ 483,139 $ (583,355) $ 117,735 36,881 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ $ (52.941.20) $ 22.53 $ 37.46 $ (32.0619.88) $ 58.09 $ (70.14) $ 14.16 3.29 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ $ 28.57 24.99 $ 62.59 50.52 $ 68.92 45.09 $ 56.70 39.64 $ 63.80 37.38 ========== ========== ========== ========== ========== AT YEAR END: Total assets................... $1,392,439 1,884,917 $2,099,131 2,212,937 $2,890,740 2,491,855 $3,021,200 2,578,655 $4,042,199 3,253,374 ========== ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 3241% to $583,396 443,496 from $856,926 753,775 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 22,482 barrels of oil, 12,847 12,009 barrels of natural gas liquids ("NGLs") and 62,751 51,099 mcf of gas were sold, or 52,390 43,008 barrel of oil equivalents ("BOEs"). In 1997, 30,029 26,656 barrels of oil, 6,032 5,264 barrels of NGLs and 92,294 80,212 mcf of gas were sold, or 51,443 45,289 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- OPERATING RESULTS: Oil and gas sales.............. $ 583,396 $ 856,926 873,012 $1,132,944 $ 932,815 $ 982,923 1,273,373 $1,632,595 $1,416,748 $1,325,311 ========== ========== ========== ========== ========== Impairment of oil and gas properties.................. $ 306,826 295,542 $ 531,929 323,078 $ -- $ 692,515 104,290 $ -- ========== ========== ========== ========== ========== Net income (loss).............. $ (444,718177,905) $ (269,363) 222,730 $ 488,019 924,002 $ (589,248) 483,679 $ 119,039 466,370 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... $ (4,4471,779) $ (2,693) 2,227 $ 4,880 9,240 $ (5,893) 4,837 $ 1,304 4,664 ========== ========== ========== ========== ========== Limited partners............ $ (440,271176,126) $ (266,670) 220,503 $ 483,139 914,762 $ (583,355) 478,842 $ 117,735 461,706 ========== ========== ========== ========== ========== Limited partners' net Net income (loss) per limited partnership partners' interest........ .......... $ (52.9415.66) $ (32.06) 19.60 $ 58.09 81.32 $ (70.14) 42.57 $ 14.16 41.04 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership partners' interest........ .......... $ 28.57 36.76 $ 62.59 75.32 $ 68.92 84.40 $ 56.70 70.24 $ 63.80 46.96 ========== ========== ========== ========== ========== AT YEAR END: Total assets................... $1,392,439 1,820,336 $2,099,131 2,424,808 $2,890,740 3,051,464 $3,021,200 3,131,023 $4,042,199 3,404,388 ========== ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 3231% to $583,396 873,012 from $856,926 1,273,373 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 49,100 barrels of oil, 12,847 17,427 barrels of natural gas liquids ("NGLs") and 62,751 68,244 mcf of gas were sold, or 52,390 77,901 barrel of oil equivalents ("BOEs"). In 1997, 30,029 49,485 barrels of oil, 6,032 7,536 barrels of NGLs and 92,294 90,255 mcf of gas were sold, or 51,443 72,064 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural 3 139 gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- OPERATING RESULTS: Oil and gas sales.............. ................. $1,453,492 $2,232,898 $2,627,636 $2,338,478 $2,402,964 ========== ========== ========== ========== ========== Litigation settlement, net........ $ 583,396 -- $ 856,926 $1,132,944 -- $ 932,815 848,304 $ 982,923 -- $ -- ========== ========== ========== ========== ========== Impairment of oil and gas properties.................. ..................... $ 306,826 477,501 $ 531,929 732,890 $ -- 348,546 $ 692,515 922,203 $ -- ========== ========== ========== ========== ========== Net income (loss).............. ................. $ (444,718736,103) $ (269,36349,528) $1,803,894 $ (955,234) $ 488,019 $ (589,24810,326) $ 119,039 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... ....... $ (4,4477,361) $ (2,693495) $ 4,880 18,039 $ (5,8939,553) $ 1,304 (103) ========== ========== ========== ========== ========== Limited partners............ ............... $ (440,271728,742) $ (266,67049,033) $1,785,855 $ (945,681) $ 483,139 $ (583,35510,223) $ 117,735 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ ....................... $ (52.9425.29) $ (32.061.70) $ 58.09 61.99 $ (70.1432.82) $ 14.16 (.35) ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ ........... $ 28.57 19.54 $ 62.59 42.52 $ 68.92 89.89(a) $ 56.70 34.93 $ 63.80 34.70 ========== ========== ========== ========== ========== AT YEAR END: Total assets................... ...................... $1,392,439 3,466,459 $2,099,131 4,793,102 $2,890,740 6,171,831 $3,021,200 6,973,611 $4,042,199 8,966,767 ========== ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $583,396 from $856,926 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 barrels of oil, 12,847 barrels of natural gas liquids ("NGLs") and 62,751 mcf of gas were sold, or 52,390 barrel of oil equivalents ("BOEs"). In 1997, 30,029 barrels of oil, 6,032 barrels of NGLs and 92,294 mcf of gas were sold, or 51,443 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).---------------

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ----------- ---------- ---------- ---------- ---------- ---------- ----------- OPERATING RESULTS: Oil and gas sales.............. .... $ 583,396 2,074,056 $3,033,675 $3,748,608 $3,147,004 $ 856,926 $1,132,944 $ 932,815 $ 982,923 3,434,740 =========== ========== ========== ========== =========== Impairment of oil and gas properties.................. .... $ 306,826 744,642 $ 531,929 891,257 $ 61,080 $ 312,969 $ -- $ 692,515 $ -- =========== ========== ========== ========== =========== Net income (loss).............. $ .... $(444,7181,011,459) $ (269,363149,382) $1,479,052 $ 488,019 493,276 $ (589,248) $ 119,039 619,939 =========== ========== ========== ========== =========== Allocation of net income (loss): Managing general partner.... ......... $ (4,44710,115) $ (2,6931,494) $ 4,880 14,790 $ (5,893) 5,035 $ 1,304 6,335 =========== ========== ========== ========== =========== Limited partners............ $ ........ $(440,2711,001,344) $ (266,670147,888) $1,464,262 $ 483,139 488,241 $ (583,355) $ 117,735 613,604 =========== ========== ========== ========== =========== Limited partners' net income (loss) per limited partnership interest........ .......... $ (52.9431.04) $ (32.064.58) $ 58.09 45.38 $ (70.14) 15.13 $ 14.16 19.02 =========== ========== ========== ========== =========== Limited partners' cash distributions per limited partnership interest........ .......... $ 28.57 23.66 $ 62.59 52.38 $ 68.92 56.25 $ 56.70 48.87 $ 63.80 53.89 =========== ========== ========== ========== =========== AT YEAR END: Total assets................... ......... $ 5,585,045 $1,392,439 7,399,664 $2,099,131 9,230,704 $2,890,740 9,713,167 $3,021,200 $4,042,199 10,707,318 =========== ========== ========== ========== =========== ITEM 7. MANAGEMENT7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $583,396 2,074,056 from $856,926 3,033,675 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 111,585 barrels of oil, 12,847 47,190 barrels of natural gas liquids ("NGLs") and 62,751 199,215 mcf of gas were sold, or 52,390 191,978 barrel of oil equivalents ("BOEs"). In 1997, 30,029 114,621 barrels of oil, 6,032 18,786 barrels of NGLs and 92,294 271,374 mcf of gas were sold, or 51,443 178,636 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- OPERATING RESULTSOperating results: Oil and gas sales.............. $ 583,396 441,480 $ 856,926 $1,132,944 643,882 $ 932,815 777,677 $ 982,923 661,198 $ 733,354 ========== ========== ========== ========== ========== Impairment of oil and gas properties.................. $ 306,826 34,145 $ 531,929 321,019 $ -- $ 692,515 583,706 $ -- ========== ========== ========== ========== ========== Net income (loss).............. $ (444,71844,421) $ (269,363149,948) $ 488,019 261,210 $ (589,248696,986) $ 119,039 2,920 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... $ (4,447444) $ (2,6931,499) $ 4,880 2,612 $ (5,8936,960) $ 1,304 58 ========== ========== ========== ========== ========== Limited partners............ $ (440,27143,977) $ (266,670148,449) $ 483,139 258,598 $ (583,355690,026) $ 117,735 2,862 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ $ (52.946.46) $ (32.0621.80) $ 58.09 37.97 $ (70.14101.31) $ 14.16 .42 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ $ 28.57 28.44 $ 62.59 53.06 $ 68.92 53.75 $ 56.70 48.45 $ 63.80 57.38 ========== ========== ========== ========== ========== AT YEAR ENDAt year end: Total assets................... $1,392,439 1,385,777 $2,099,131 1,634,061 $2,890,740 2,146,498 $3,021,200 2,277,937 $4,042,199 3,289,433 ========== ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 3231% to $583,396 441,480 from $856,926 643,882 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 21,587 barrels of oil, 12,847 11,328 barrels of natural gas liquids ("NGLs") and 62,751 47,086 mcf of gas were sold, or 52,390 40,763 barrel of oil equivalents ("BOEs"). In 1997, 30,029 21,972 barrels of oil, 6,032 4,763 barrels of NGLs and 92,294 68,973 mcf of gas were sold, or 51,443 38,231 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural 3 139 gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).. The average price received per barrel of oil decreased $6.21, or 32% from $19.41 in 1997 to $13.20 in 1998. The average price received per barrel of NGLs decreased $4.14, or 37% from $11.16 in 1997 to $7.02 in 1998. The average price received per mcf of gas decreased 31% in 1998 to $1.64 compared to $2.38 in 1997. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received in 1998. Total costs and expenses decreased in 1998 to $492,078 as compared to $801,240 in 1997, a decrease of $309,162, or 39%. This decrease was primarily due to declines in the impairment of oil and gas properties, production costs and general and administrative expenses ("G&A"), offset by a slight increase in depletion. Production costs were $282,430 in 1998 and $305,774 in 1997, resulting in a $23,344 decline, or 8%. The decline includes a reduction in production taxes due to the decline in oil and gas revenues and less well maintenance costs. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A decreased, in aggregate, 41% from $23,842 in 1997 to $14,124 in 1998. The Partnership paid the managing general partner $11,560 in 1998 and $20,526 in 1997 for G&A incurred on behalf of the Partnership. G&A is allocated, in part, to the Partnership by the managing general partner. Such allocated expenses are determined by the managing general partner based upon its judgement of the level of activity of the Partnership relative to the managing general partner's activities and other entities it manages. The method of allocation has been consistent over the past several years with certain modifications incorporated to reflect changes in Pioneer USA's overall business activities. In accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS 121"), the managing general partner reviews the Partnership's oil and gas properties for impairment whenever events or circumstances indicate a decline in the recoverability of the carrying value of the Partnership's assets may have occurred. Declining commodity prices prompted impairment reviews in 1998 and 1997. As a result of the review and evaluation of its long-lived assets for impairment, the Partnership recognized non-cash charges of $34,145 and $321,019 related to its oil and gas properties during 1998 and 1997, respectively. Depletion was $161,379 in 1998 compared to $150,605 in 1997. This represented an increase of $10,774, or 7%. This increase was primarily the result of a decline in proved reserves during 1998 due to the lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1997 and a reduction in oil production of 385 barrels for the period ended December 31, 1998 compared to the same period in 1997. 1997 compared to 1996 The Partnership's 1997 oil and gas revenues decreased 17% to $643,882 from $777,677 in 1996. The decrease in revenues resulted from declines in production and lower average prices received. In 1997, 21,972 barrels of oil, 4,763 barrels of NGLs and 68,973 mcf of gas were sold, or 38,231 BOEs. In 1996, 25,428 barrels of oil and 88,919 mcf of gas were sold, or 40,248 BOEs. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. As is described above in "Results of 4 140 Operations -- 1998 compared to 1997", the Partnership changed its method of accounting for processed natural gas to a dry gas basis in the fourth quarter of 1997. As a result of this change, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, 1997 and 1996 separate product volumes are not comparable. The declines in production volumes were primarily attributable to the decline characteristics of the Partnership's oil and gas properties. The average price received per barrel of oil decreased 10% from $21.62 in 1996 to $19.41 in 1997. The average price received per barrel of NGLs during 1997 was $11.16. The average price received per mcf of gas decreased 7% in 1997 to $2.38 compared to $2.56 in 1996. Total costs and expenses increased in 1997 to $801,240 as compared to $523,562 in 1996, an increase of $277,678, or 53%. This increase was primarily due to the impairment of oil and gas properties and an increase in production costs, offset by declines in loss on disposition of assets, depletion and G&A. Production costs were $305,774 in 1997 and $298,749 in 1996, resulting in a $7,025 increase. The increase was due to additional well maintenance costs, offset by a decrease in production taxes. During this period, G&A decreased, in aggregate, 9% from $26,252 in 1996 to $23,842 in 1997. The Partnership paid the managing general partner $20,526 in 1997 and $22,989 in 1996 for G&A incurred on behalf of the Partnership. The Partnership recognized a non-cash SFAS 121 impairment provision of $321,019 related to its oil and gas properties during the fourth quarter of 1997. Depletion was $150,605 in 1997 compared to $169,844 in 1996. This represented a decrease of $19,239, or 11%. This decrease was primarily attributable to a decline in oil production of 3,456 barrels from 1996. A loss on disposition of assets of $28,717 was recognized during 1996 resulting from the sale of one gas well and the write-off of remaining capitalized well costs of $35,532 less proceeds received of $6,815. IMPACT OF INFLATION AND CHANGING PRICES ON SALES AND NET INCOME

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- OPERATING RESULTS: Oil and gas sales.............. $ 583,396 578,573 $ 856,926 810,500 $1,132,944 1,052,408 $ 932,815 889,592 $ 982,923 946,401 ========== ========== ========== ========== ========== Impairment of oil and gas properties.................. $ 306,826 383,951 $ 531,929 547,793 $ -- $ 692,515 479,522 $ -- ========== ========== ========== ========== ========== Net income (loss).............. $ (444,718488,631) $ (269,363344,997) $ 488,019 397,674 $ (589,248391,752) $ 119,039 5,033 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... $ (4,4474,887) $ (2,6933,450) $ 4,880 3,977 $ (5,8933,918) $ 1,304 50 ========== ========== ========== ========== ========== Limited partners............ $ (440,271483,744) $ (266,670341,547) $ 483,139 393,697 $ (583,355387,834) $ 117,735 4,983 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ $ (52.9454.03) $ (32.0638.14) $ 58.09 43.97 $ (70.1443.31) $ 14.16 .56 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ $ 28.57 24.02 $ 62.59 50.67 $ 68.92 54.14 $ 56.70 49.35 $ 63.80 52.50 ========== ========== ========== ========== ========== AT YEAR END: Total assets................... $1,392,439 1,334,302 $2,099,131 2,051,284 $2,890,740 2,848,468 $3,021,200 2,970,489 $4,042,199 3,781,914 ========== ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 3229% to $583,396 578,573 from $856,926 810,500 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 31,155 barrels of oil, 12,847 12,210 barrels of natural gas liquids ("NGLs") and 62,751 52,254 mcf of gas were sold, or 52,390 52,074 barrel of oil equivalents ("BOEs"). In 1997, 30,029 31,020 barrels of oil, 6,032 barrels of 4,628 NGLs and 92,294 70,802 mcf of gas were sold, or 51,443 47,448 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- OPERATING RESULTSOperating results: Oil and gas sales.............. ................. $ 583,396 $ 856,926 910,252 $1,132,944 $ 932,815 $ 982,923 1,402,306 $1,768,325 $1,433,517 $1,441,190 ========== ========== ========== ========== ========== Impairment of oil and gas properties.................. ..................... $ 306,826 $ 531,929 430,351 $1,194,023 $ -- $ 692,515 147,353 $ 491,050 ========== ========== ========== ========== ========== Litigation settlement, net........ $ -- $ -- $ 852,211 $ -- $ -- ========== ========== ========== ========== ========== Net income (loss).............. ................. $ (444,718784,583) $ (269,363811,642) $1,483,261 $ (12,017) $ 488,019 $ (589,248474,032) $ 119,039 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... General partners............... $ (4,44752,520) $ (2,6931,662) $ 4,880 389,185 $ (5,893) 104,436 $ 1,304 34,602 ========== ========== ========== ========== ========== Limited partners............ ............... $ (440,271732,063) $ (266,670809,980) $1,094,076 $ (116,453) $ 483,139 $ (583,355508,634) $ 117,735 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ ....................... $ (52.9437.53) $ (32.0641.53) $ 58.09 56.09 $ (70.145.97) $ 14.16 (26.08) ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ ........... $ 28.57 20.73 $ 62.59 24.50 $ 68.92 72.73(a) $ 56.70 21.54 $ 63.80 20.21 ========== ========== ========== ========== ========== AT YEAR ENDAt year end: Total assets................... ...................... $1,392,439 1,691,709 $2,099,131 3,015,116 $2,890,740 4,459,272 $3,021,200 4,865,672 $4,042,199 5,385,572 ========== ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $583,396 from $856,926 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 barrels of oil, 12,847 barrels of natural gas liquids ("NGLs") and 62,751 mcf of gas were sold, or 52,390 barrel of oil equivalents ("BOEs"). In 1997, 30,029 barrels of oil, 6,032 barrels of NGLs and 92,294 mcf of gas were sold, or 51,443 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).---------------

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- OPERATING RESULTS: Oil and gas sales.............. $ 583,396 $ 856,926 692,090 $1,132,944 $ 932,815 $ 982,923 1,063,396 $1,346,937 $1,161,251 $1,292,563 ========== ========== ========== ========== ========== Impairment of oil and gas properties.................. $ 306,826 298,622 $ 531,929 127,213 $ -- $ 692,515 76,908 $ -- ========== ========== ========== ========== ========== Net income (loss).............. $ (444,718416,064) $ (269,363) 168,261 $ 488,019 577,803 $ (589,248) 263,533 $ 119,039 245,360 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... $ (4,4474,161) $ (2,693) 1,683 $ 4,880 5,778 $ (5,893) 2,686 $ 1,304 2,505 ========== ========== ========== ========== ========== Limited partners............ $ (440,271411,903) $ (266,670) 166,578 $ 483,139 572,025 $ (583,355) 260,847 $ 117,735 242,855 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ $ (52.9434.02) $ (32.06) 13.76 $ 58.09 47.25 $ (70.14) 21.55 $ 14.16 20.06 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ $ 28.57 17.30 $ 62.59 47.53 $ 68.92 51.98 $ 56.70 45.35 $ 63.80 51.72 ========== ========== ========== ========== ========== AT YEAR END: Total assets................... $1,392,439 1,617,114 $2,099,131 2,261,689 $2,890,740 2,664,141 $3,021,200 2,771,529 $4,042,199 3,023,786 ========== ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 3235% to $583,396 692,090 from $856,926 1,063,396 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 39,380 barrels of oil, 12,847 13,978 barrels of natural gas liquids ("NGLs") and 62,751 48,787 mcf of gas were sold, or 52,390 61,489 barrel of oil equivalents ("BOEs"). In 1997, 30,029 41,504 barrels of oil, 6,032 5,885 barrels of NGLs and 92,294 80,867 mcf of gas were sold, or 51,443 60,867 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- ----------- OPERATING RESULTS: Oil and gas sales.............. ..... $ 583,396 955,645 $1,411,247 $1,629,975 $1,387,494 $ 856,926 $1,132,944 $ 932,815 $ 982,923 1,568,783 ========== ========== ========== ========== =========== Impairment of oil and gas properties.................. ..... $ 306,826 306,043 $ 531,929 485,158 $ -- $1,008,771 $ 692,515 $ -- 1,055,409 ========== ========== ========== ========== =========== Net income (loss).............. ..... $ (444,718280,631) $ (269,3637,029) $ 488,019 654,054 $ (589,248755,419) $ 119,039 $(1,032,621) ========== ========== ========== ========== =========== Allocation of net income (loss): Managing general partner.... .......... $ (4,4472,806) $ (2,69370) $ 4,880 6,540 $ (5,8937,554) $ 1,304 (10,326) ========== ========== ========== ========== =========== Limited partners............ ... $ (440,271277,825) $ (266,6706,959) $ 483,139 647,514 $ (583,355747,865) $ 117,735 $(1,022,295) ========== ========== ========== ========== =========== Limited partners' net Net income (loss) per limited partnership partners' interest........ ........... $ (52.9423.91) $ (32.06.60) $ 58.09 55.72 $ (70.1464.36) $ 14.16 (87.98) ========== ========== ========== ========== =========== Limited partners' cash distributions per limited partnership partners' interest........ ........... $ 28.57 36.77 $ 62.59 75.11 $ 68.92 70.97 $ 56.70 64.70 $ 63.80 77.81 ========== ========== ========== ========== =========== AT YEAR END: Total assets................... ...... $1,392,439 2,667,803 $2,099,131 3,402,546 $2,890,740 4,289,878 $3,021,200 $4,042,199 4,511,078 $ 5,976,067 ========== ========== ========== ========== =========== ITEM 7. MANAGEMENT7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $583,396 955,645 from $856,926 1,411,247 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 49,403 barrels of oil, 12,847 21,220 barrels of natural gas liquids ("NGLs") and 62,751 108,617 mcf of gas were sold, or 52,390 88,726 barrel of oil equivalents ("BOEs"). In 1997, 30,029 51,993 barrels of oil, 6,032 8,865 barrels of NGLs and 92,294 135,829 mcf of gas were sold, or 51,443 83,496 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 ---------- ---------- ---------- ---------- ---------- OPERATING RESULTS: Oil and gas sales.............. $ 583,396 $ 856,926 774,533 $1,132,944 $ 932,815 $ 982,923 1,157,862 $1,411,568 $1,195,876 $1,183,360 ========== ========== ========== ========== ========== Impairment of oil and gas properties.................. $ 306,826 405,308 $ 531,929 699,976 $ -- $ 692,515 591,925 $ -- ========== ========== ========== ========== ========== Net income (loss).............. $ (444,718514,812) $ (269,363331,171) $ 488,019 600,634 $ (589,248334,438) $ 119,039 178,831 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... $ (4,4475,148) $ (2,6933,312) $ 4,880 6,006 $ (5,8933,344) $ 1,304 1,788 ========== ========== ========== ========== ========== Limited partners............ $ (440,271509,664) $ (266,670327,859) $ 483,139 594,628 $ (583,355331,094) $ 117,735 177,043 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ $ (52.9439.40) $ (32.0625.35) $ 58.09 45.97 $ (70.1425.60) $ 14.16 13.69 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ $ 28.57 27.90 $ 62.59 50.68 $ 68.92 57.12 $ 56.70 44.53 $ 63.80 43.56 ========== ========== ========== ========== ========== AT YEAR END: Total assets................... $1,392,439 2,059,502 $2,099,131 2,953,618 $2,890,740 3,940,216 $3,021,200 4,121,722 $4,042,199 5,006,561 ========== ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 3233% to $583,396 774,533 from $856,926 1,157,862 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 37,135 barrels of oil, 12,847 20,500 barrels of natural gas liquids ("NGLs") and 62,751 86,501 mcf of gas were sold, or 52,390 72,052 barrel of oil equivalents ("BOEs"). In 1997, 30,029 38,859 barrels of oil, 6,032 9,410 barrels of NGLs and 92,294 134,311 mcf of gas were sold, or 51,443 70,654 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- ---------- OPERATING RESULTSOperating results: Oil and gas sales.............. ................. $ 583,396 371,098 $ 856,926 $1,132,944 548,786 $ 932,815 631,838 $ 982,923 =570,205 $ 598,850 ========= ========== ========== ========== ========== Impairment of oil and gas properties.................. ..................... $ 306,826 22,031 $ 531,929 270,187 $ -- $ 692,515 -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ $ -- =$ -- $ 32,694 $ -- $ -- ========= ========== ========== ========== ========== Net income (loss).............. $ ................. $(444,718274,769) $ (269,363158,804) $ 488,019 221,854 $ 60,241 $ (589,248435,081) $ 119,039 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner.... ....... $ (4,4472,747) $ (2,6931,588) $ 4,880 2,219 $ 603 $ (5,8934,351) $ 1,304 ========== ========== ========== ========== ========== Limited partners............ $ ............... $(440,271272,022) $ (266,670157,216) $ 483,139 219,635 $ 59,638 $ (583,355430,730) $ 117,735 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest........ ....................... $ (52.9428.30) $ (32.0616.35) $ 58.09 22.85 $ 6.20 $ (70.1444.81) $ 14.16 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........ ........... $ 28.57 9.62 $ 62.59 25.26 $ 68.92 26.55(a) $ 56.70 19.89 $ 63.80 =18.57 ========= ========== ========== ========== ========== AT YEAR ENDAt year end: Total assets................... ...................... $ 684,133 $1,392,439 1,059,494 $2,099,131 1,460,408 $2,890,740 1,524,789 $3,021,200 $4,042,199 =1,658,967 ========= ========== ========== ========== ========== ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $583,396 from $856,926 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 barrels of oil, 12,847 barrels of natural gas liquids ("NGLs") and 62,751 mcf of gas were sold, or 52,390 barrel of oil equivalents ("BOEs"). In 1997, 30,029 barrels of oil, 6,032 barrels of NGLs and 92,294 mcf of gas were sold, or 51,443 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).---------------