<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 15. OIL AND GAS OPERATIONS (UNAUDITED)--(CONTINUED)
RESULTS OF OPERATIONS FOR OIL AND GAS PRODUCING ACTIVITIES
<TABLE>
<CAPTION>
UNITED
STATES BOLIVIA TOTAL
-------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
1994
Revenues........................................... $ 8,432 $ 4,117 $ 12,549
Production costs................................... 5,750 518 6,268
Depreciation, depletion and amortization........... 33,715 55 33,770
-------- ------- --------
Income before income taxes*........................ (31,033) 3,544 (27,489)
Income taxes....................................... (10,551) 1,205 (9,346)
-------- ------- --------
Net income *....................................... $(20,482) $ 2,339 $(18,143)
======== ======= ========
1993
Revenues........................................... $ 17,011 $ 3,178 $ 20,189
Production costs................................... 5,642 107 5,749
Depreciation, depletion and amortization........... 7,688 7,688
-------- ------- --------
Income before income taxes*........................ 3,681 3,071 6,752
Income taxes....................................... 1,252 1,044 2,296
-------- ------- --------
Net income *....................................... $ 2,429 $ 2,027 $ 4,456
======== ======= ========
1992
Revenues........................................... $ 19,984 $10,110 $ 30,094
Production costs................................... 7,877 56 7,933
Depreciation, depletion and amortization........... 10,303 10,303
-------- ------- --------
Income before income taxes*........................ 1,804 10,054 11,858
Income taxes....................................... 613 3,419 4,032
-------- ------- --------
Net income *....................................... $ 1,191 $ 6,635 $ 7,826
======== ======= ========
</TABLE>
- --------
* Before deducting selling, general, administrative and interest expenses.
Oil and gas reserves
During fiscal 1994, the Company recorded a $29.2 million pretax writedown of
its oil and gas properties in the Gulf of Mexico. The writedown was the result
of several factors: lower natural gas prices, additional capitalized costs
incurred recently in connection with several workover wells at the Company's
Wisdom gas field and an increase in estimated future costs.
Zapata's domestic natural gas production for fiscal 1994 was approximately
one half of the fiscal 1993 period's level of production which was 31% lower
than the fiscal 1992 level of production. The decline in production was due to
production difficulties encountered during 1993 at the Wisdom gas field, the
Company's most significant oil and gas property.
In late April 1993, one of the oil and gas division's wells in the Wisdom gas
field was shut-in when the well began producing sand. Prior to the failure,
this well was capable of producing 6.5 MMcf per day. After some minor repairs,
the well was returned to production at a significantly reduced level. Efforts
to restore production from this well have been deferred.
36