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LIQUIDITY AND CAPITAL RESOURCES

          At December 31, 1995, Zapata's long-term debt of $34.2 million
compared favorably to working capital of $126.0 million.  Reflecting the Energy
Industries Sale in December 1995, the Company's cash component increased $99.6
million during the current quarter.

          Cash provided from operating activities totalled $6.7 million in the
first quarter of fiscal 1996 as compared to a $5.5 million use of cash during
the first quarter of fiscal 1995.  The improvement in the fiscal 1996 period was
primarily attributable to an increased contribution from the Company's marine
protein operations.  Investing activities provided $104.0 million during the
fiscal 1996 period and $1.6 million in the fiscal 1995 period.  The fiscal 1996
period included the net proceeds generated from the Energy Industries Sale while
the fiscal 1995 period included proceeds from the sale of the corporate aircraft
and proceeds from a note that was fully collected in fiscal 1995.  Financing
activities consumed $11.1 million and $4.0 million in the first quarters of
fiscal 1996 and 1995, respectively.  The increased use of cash in the fiscal
1996 period includes a $3.2 million prepayment of indebtedness owing to the
Malcolm I. Glazer Trust incurred in connection with the Company's purchase of
stock of Envirodyne Industries, Inc. and a $7.0 million reduction of a revolving
credit facility for the marine protein division.  The fiscal 1995 period
includes payments totalling $3.9 million for redemption of the Company's
preferred stock, an oddlot common stock buy-back and dividend payments.

RESULTS OF OPERATIONS

          Zapata's net income of $14.3 million for the first quarter of fiscal
1996 improved significantly from the prior year's first quarter net income of
$748,000.  The fiscal 1996 results include a $13.2 million after-tax gain from
the sale of the Company's natural gas compression operations, which closed on
December 15, 1995.  Additionally, Zapata's net income includes a net loss of
$42,000 in the fiscal 1996 period and net income of $473,000 in the fiscal 1995
period from the Company's discontinued natural gas compression operations and
natural gas gathering, processing and marketing operations.

          The Company's net income from continuing operations of $1.1 million
for the three-month period ending December 31, 1995 compared favorably to net
income of $275,000 for the same period in the prior year.  Reflecting improved
operating results from the Company's marine protein operations, revenues of
$23.9 million and operating income of $2.4 million for the first quarter of
fiscal 1996 compared favorably to revenues of $22.4 million and operating income
of $311,000 in the corresponding quarter in fiscal 1995.

MARINE PROTEIN

          The marine protein division's operating results improved significantly
in the first quarter of fiscal 1996 as compared to the first quarter of fiscal
1995.  Revenues of $23.5 million and operating income of $3.1 million for the
three-month period ending December 31, 1995 compared favorably to revenues of
$19.6 million and operating income of $734,000 for the corresponding period in
fiscal 1995.  Sales volumes of fish oil were approximately 46% higher in the
current quarter as compared to sales in the prior-year quarter, while fish meal
sales volumes were down 30% in the current period as compared to the prior-year
period.  The average price of fish oil increased to $453 per ton in the first
quarter of fiscal 1996 from $265 per ton in the fiscal 1995 first quarter; fish
meal prices averaged $387 per ton in the fiscal 1996 period and $338 in the

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