<PAGE>
 
  Cimarron maintains a fleet of leased and owned rail cars which transport feed
stock (butane, isobutane, gasoline, MTBE and various aromatic mixtures) to
refineries and petrochemical plants.  Cimarron supplies wholesale propane in
truckload quantities to propane retailers and wholesalers.

  Competition.  Cimarron's Smith County gathering system and processing plant,
which are operated by Cimarron's joint venture partner, face competition for new
well additions and additional gas processing from one nearby competing system.
The gathering system and processing plant in Oklahoma (discussed below), which
are operated by Cimarron, face competition for new well additions and additional
gas processing from several nearby competing systems.

  Cimarron's marketing activities face significant competition.  Cimarron's
competitors in its marketing efforts include other oil and gas production
companies, major interstate pipelines and their marketing affiliates, and
national and local gas gatherers, brokers, marketers and distributors of varying
sizes, financial resources and experience.  Certain competitors, such as major
oil and gas production companies, have financial and other resources
substantially in excess of those available to Cimarron.  Cimarron's marketing
activities are also affected by the actions of governmental regulatory
authorities such as the Federal Energy Regulatory Commission ("FERC").  Cimarron
is not, however, directly subject to regulation by the FERC.  It is impossible
to predict how future regulatory actions will impact Cimarron's marketing
activities.

                                      19