<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
-------------------- -------------------
1995 1994 1995 1994
---------- -------- -------- ---------
<S> <C> <C> <C> <C>
Revenues
- ----------
Gathering & Processing $ 4,420 $ 7,255 $14,010 $ 18,458
NGL Marketing 8,089 34,702 43,819 101,998
------- ------- ------- --------
$12,509 $41,957 $57,829 $120,456
======= ======= ======= ========
Operating Results
- --------------------------
Gathering & Processing $ 203 $ (164) $ 357 $ 148
NGL Marketing 35 147 63 696
Selling & Administrative (277) (456) (902) (1,540)
------- ------- ------- --------
$ (39) $ (473) $ (482) $ (696)
======= ======= ======= ========
</TABLE>
For the third quarter of fiscal 1995, gathering and processing revenues
were lower than the prior year as a result of the negative impact of lower
natural gas prices, while operating results improved, reflecting increased
processing margins. However, marketing revenues and operating income have
declined in fiscal 1995 as compared to 1994, due to the Company's decision to
reduce its natural gas trading activities.
A comparison of average daily volumes of gas, measured in millions of
cubic feet, gathered and processed during the three-month and nine-month periods
ended June 30, 1995 and 1994 is shown below.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
------------------- -----------------
Average Daily Volumes 1995 1994 1995 1994
- ----------------------- ---------- ------- ------ ---------
(MMCF)
<S> <C> <C> <C> <C>
Gathering 57.0 47.7 53.5 44.9
Processing 26.5 25.0 26.6 21.9
</TABLE>
In April 1995, Zapata announced that the Company was considering the sale
of its natural gas gathering and processing operation. 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.
OIL AND GAS - Revenues of $2.5 million and operating income of $310,000 for the
- -----------
third quarter of fiscal 1995 compared favorably to the corresponding fiscal 1994
period's revenues of $3.0 million and operating loss of $18.7 million. The
fiscal 1994 period loss included an $18.8 million property valuation provision.
Although the Company's U.S. natural gas prices improved during the third quarter
of fiscal 1995, current quarter prices were lower than the prior-year quarter
prices. Zapata's domestic natural gas production for the third quarter of
fiscal 1995 approximated the level of production in the corresponding fiscal
1994 period. The Company's Bolivian operations contributed $399,000 to
operating income in the third quarter of fiscal 1995 as compared to $483,000 in
the third quarter of fiscal 1994.
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