<PAGE>
In addition to operating a fleet of natural gas compressor packages for
rental purposes, Energy Industries designs, fabricates and sells natural gas
compressor packages to customer specifications. Energy Industries sells
compressor packages to natural gas producers, gatherers and transmission
companies which expect the long life of their associated reserves or pipeline to
justify the capital cost of acquiring, rather than renting, a natural gas
compressor package. Most of Energy Industries' natural gas compressor package
sales are for larger, high horsepower packages.
The natural gas compressor package sales and cost of sales for the two-
month period ended December 31, 1993, in thousands, except percentage amounts,
are shown below. Currently, fabrication backlog for the division is higher than
at any time in the past three years.
<TABLE>
<CAPTION>
<S> <C>
Fabrication and Sales $3,493
Cost of sales 2,757
------
Gross margin $ 736
======
Gross margin/percentage 21.1%
======
</TABLE>
NATURAL GAS GATHERING, PROCESSING AND MARKETING - Zapata's natural gas
gathering, processing and marketing operations are conducted through Cimarron
Gas Holding Company and its subsidiaries. Cimarron was acquired early in fiscal
1993 to serve as the vehicle for the Company's expansion into the natural gas
services market. As a division of Zapata, Cimarron's operations involve two
major categories of business activities: the gathering and processing of natural
gas and its constituent products and the marketing and trading of natural gas
liquids (NGL's).
Revenues and operating results for the first quarter of fiscal 1994 and
1993 are presented below by major category, in thousands. For the first quarter
of fiscal 1994, revenues were negatively impacted by lower prices for natural
gas liquids which resulted from the decline in crude oil prices. Operating
income, however, improved as a result of the expansion of the division's
gathering and processing operations during 1993.
<TABLE>
<CAPTION>
Revenues Operating Results
---------------- -----------------
1994 1993 1994 1993
------- ------- ------ ------
<S> <C> <C> <C> <C>
Gathering & Processing $ 6,080 $ 3,653 $ 672 $ 235
NGL Marketing 37,391 47,101 655 688
Selling & Administrative --- --- (766) (749)
------- ------- ----- -----
$43,471 $50,754 $ 561 $ 174
======= ======= ===== =====
</TABLE>
Gas gathering is the collection of natural gas from various individual
wells, combining it into a single gas stream and delivering it into a major
transmission line for transportation to market. A gathering system sometimes
includes an associated processing plant for the removal of gas liquids,
depending on the content of liquefiable hydrocarbons in the gas streams and the
capabilities of transmission lines.
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