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TEM 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
        
BUSINESS
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     In April 1995, Zapata announced that the Company was considering the sale
of its two natural gas services businesses: the natural gas compression
operation and the natural gas gathering and processing operation.  The decision
to consider exiting the energy industry was based on the belief that businesses
outside the energy industry may provide better opportunities for the Company to
pursue.  The decision to consider redirecting operations away from the energy
industry does not imply a decision to liquidate Zapata.  The Company is
evaluating opportunities to reinvest the stockholders' capital.

     In August 1995, Zapata announced that it had acquired 31% of the
outstanding common stock of Envirodyne Industries, Inc. ("Envirodyne"), a
manufacturer of food packaging and food service supplies for $18.8 million.
This acquisition is the first major step in the transformation of Zapata away
from the energy business and into food-related businesses.  Zapata is evaluating
acquiring additional shares or proposing a merger with, or acquisition of,
Envirodyne in the future. Zapata is also looking at other opportunities in food-
related areas.

     In June 1995, Zapata announced that it had entered into an agreement to
sell the assets of its natural gas compression division for $130 million.  The
sale is subject to stockholder approval and certain governmental approvals.  Due
to the preliminary nature of the decision process regarding the possible sale of
the natural gas gathering and processing operation, the financial statement
impact of the ultimate disposition of this business cannot be determined at this
time.

     Zapata has decided to retain the marine protein operations which had
previously been reported as a discontinued operation.  In April 1995, the
Company announced the cancellation of the sale of the marine protein division.
Zapata had previously announced that an agreement to sell its marine protein
operations had been reached.  However, the acquisition group failed to close the
transaction. The Company has concluded that the value of the marine protein
operations could be more effectively realized by retaining these operations as
part of Zapata's ongoing operations, rather than pursuing another sale
transaction.  As a result, marine protein's net assets and results of operations
for all periods have been reclassified from discontinued operations to
continuing operations.

     In August 1995, Zapata completed the sale of its remaining U.S. offshore
oil and gas properties.  The Company received cash, a production payment
entitling Zapata to a share of future revenues derived from the properties and
other contract considerations.  The Company currently plans to retain its
Bolivian oil and gas operations.

LIQUIDITY AND CAPITAL RESOURCES
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     In April 1995, Zapata used the proceeds of $12.7 million from the sale of
its remaining 673,077 shares of Tidewater Inc. ("Tidewater") common stock to
reduce the Company's $17.5 million in notes due to Norex America, Inc.
Remaining mandatory principal payments for the next twelve months total $8.4
million.  In July 1995, a subsidiary of the Company, Zapata Protein, Inc.,
arranged a $15.0 million bank credit facility.

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