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TEM 2.                  MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES
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     At December 31, 1994, Zapata's financial condition remains strong.  Long-
term debt of $59.2 million compares favorably to working capital of $88.1
million and stockholders' equity of $150.8 million.  Mandatory principal
payments for the next twelve months total $2.5 million.  Zapata currently owns
673,077 shares of common stock of Tidewater Inc., all of which are reserved for
possible exchange, at the election of the holder, for $17.5 million of the
Company's 8.5% unsecured exchangeable notes due in 1996.

     As of December 31, 1994, Zapata redeemed the remaining 22,498 shares of its
outstanding $6 Cumulative Preferred Stock (Preferred Stock)  at $100 per share.
In the first quarter of fiscal 1995, the Company announced that payment of
dividends on its Common Stock and $2 Noncumulative Convertible Preference Stock
would be discontinued until further notice.

     Net cash used by operating activities for the first quarters of fiscal 1995
and 1994 each totalled $4.8 million.  However, cash provided by investing
activities of $1.2 million during the first quarter of fiscal 1995 was
significantly lower than the $79.9 million provided in the corresponding fiscal
1994 period as a result of the sale of 3.75 million shares of Zapata's Tidewater
common stock in November 1993.  Reflecting a senior debt prepayment in December
1993, net cash used by financing activities of $4.5 million in the first quarter
of fiscal 1995 was substantially lower than the $68.4 million used in the prior-
year period.

RESULTS OF OPERATIONS
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     Zapata reported net income of $393,000 for the first quarter of fiscal 1995
as compared to net income of $17.3 million for the same period in fiscal 1994.
The decrease was primarily attributable to a $33.8 million pretax gain from the
sale of 3.75 million shares of Zapata's Tidewater common stock in the fiscal
1994  period.  This gain was partially offset by a $6.8 million expense
associated with the partial prepayment of the Company's senior indebtedness
during the first quarter of fiscal 1994.  Interest expense was lower in the
first quarter of fiscal 1995 as compared to the corresponding 1994 period due
primarily to the 1994 senior debt prepayment.  The fiscal 1994 results include
net income of $313,000 from the Company's discontinued marine protein
operations.

     The Company's operating income of $1.3 million for the first quarter of
fiscal 1995 compared favorably to operating income of $338,000 for the
corresponding fiscal 1994 period.  The improvement was primarily attributable to
Zapata's natural gas compression division that was acquired in November 1993.
The benefits of reduced general and administrative expenses associated with the
Company's corporate headquarters and the absence of domestic oil and gas
operations workover expenses in the first quarter of fiscal 1995 were offset by
an operating loss from the Company's natural gas gathering, processing and
marketing operations.  Revenues for the first quarter of fiscal 1995 totalled
$46.0 million as compared to $59.5 million for the first quarter of fiscal 1994.

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