<PAGE>
The following table sets forth certain information with respect to the
developed and undeveloped acreage of the Company as of September 30, 1994:
<TABLE>
<CAPTION>
DEVELOPED(1) UNDEVELOPED(2) TOTAL
--------------- ----------------- -----------------
ACREAGE GROSS(3) NET(4) GROSS(3) NET(4) GROSS(3) NET(4)
------- -------- ------ --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
United States
Offshore........... 7,012 3,661 32,803 13,739 39,815 17,400
Foreign
Bolivia............ 5,440 1,360 1,262,240 337,724 1,267,680 339,084
------ ----- --------- ------- --------- -------
Total............ 12,452 5,021 1,295,043 351,463 1,307,495 356,484
====== ===== ========= ======= ========= =======
</TABLE>
- --------
(1) Developed acreage is acreage spaced or assignable to productive wells.
(2) Undeveloped acreage is acreage on which wells have not been drilled or
completed to a point that would permit the production of commercial
quantities of oil and gas, regardless of whether such acreage contains
proved reserves. All of the Company's undeveloped acreage is held under
leases which are currently held by production except for undeveloped
Bolivian acreage.
(3) A "gross acre" is an acre in which a working interest is owned. The number
of gross acres represents the sum of acres in which a working interest is
owned.
(4) A "net acre" is deemed to exist when the sum of the fractional working
interests in gross acres equals one. The number of net acres is the sum of
the fractional working interests in gross acres expressed in whole numbers
or fractions thereof.
Drilling Activity. Other than the $9.3 million and $12.2 million workover and
recompletion programs during 1994 and 1992, respectively, with respect to the
Company's Wisdom gas field, the Company did not participate in any domestic
exploratory or development drilling during the years ended September 30, 1994,
1993 and 1992. However, since September 30, 1993, the Company has participated
in drilling two exploratory wells in its Bolivian operation which has achieved
total depth. The first well, the Los Suris #2, was successful. The second well,
the San Antonio #1, has been temporarily abandoned.
Marketing. The revenues generated by the Company's exploration and production
operations are highly dependent upon the prices of, and demand for, natural
gas, and, to a lesser extent, oil. For the last several years, prices of oil
and gas have reflected a worldwide surplus of supply over demand. From time to
time, the Company has curtailed its gas production in response to the low price
of gas.
Market conditions for oil and gas are the result of a number of factors
outside the control of the Company, including changing economic conditions,
seasonal weather conditions, loss of markets to alternative fuels, increased
foreign production, government regulation and the failure or success of members
of OPEC to agree to and maintain price and production controls. Historically,
demand for, and prices of, natural gas are seasonal, generally peaking in the
winter when heating requirements are highest.
Substantially all of the Company's natural gas production in the United
States is sold on the spot market, principally to independent natural gas
marketers. During each of the last three fiscal years, no purchaser of the
Company's oil and gas production accounted for more than 10% of the Company's
total consolidated revenues (including revenues attributable to the Company's
discontinued marine protein operations). The Company believes that the loss of
any individual purchaser would not have a material adverse effect on the
Company.
Competition. The Company faces significant competition in its oil and gas
operations. The Company's competitors in its producing efforts include major
oil and gas production companies and numerous independent oil and gas
companies, individuals and drilling and income programs. The Company's
competitors in its marketing efforts include other oil and gas production
companies, major interstate pipelines
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