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                               ZAPATA CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
NOTE 4. DISCONTINUED NATURAL GAS COMPRESSION OPERATIONS
 
 Acquisition
 
  In November 1993, Zapata purchased the natural gas compression business of
Energy Industries, Inc. and certain other affiliated companies ("Energy
Industries"), as well as certain real estate used by the business. Total
consideration paid for the purchase of Energy Industries and certain real
estate, and for a related noncompetition agreement (collectively, the "Energy
Industries Acquisition"), was $90.2 million, consisting of $74.5 million in
cash and 2.7 million shares of Common Stock based on an assigned value of $5.80
per share which approximated the average trading price prior to the closing of
the acquisition. Additionally, the Company incurred approximately $2.0 million
in fees associated with the Energy Industries Acquisition. Zapata accounted for
the acquisition using the purchase method of accounting and recorded $19.3
million of goodwill in connection therewith. The goodwill was being amortized
over 40 years.
 
  The following assets and liabilities were acquired in connection with the
Energy Industries Acquisition effective November 1, 1993 (in millions):
 

<TABLE>
      <S>                                                                 <C>
      Cash............................................................... $ 3.5
      Receivables........................................................   9.3
      Inventory..........................................................  16.2
                                                                          -----
                                                                           29.0
      Goodwill & other assets............................................  19.7
      Property & equipment, net..........................................  49.6
                                                                          -----
                                                                          $98.3
                                                                          =====
      Current liabilities................................................ $ 5.8
      Long-term debt.....................................................    .2
                                                                          -----
                                                                          $ 6.0
                                                                          =====
</TABLE>

 
 Disposition
 
  In late 1994 and early 1995, the Company began to develop a strategic plan
which involves repositioning the Company in the food packaging, food and food
service equipment and supply (collectively, "food services") businesses and
exiting the energy business. The strategic plan that was developed called for
the divestiture of most of the Company's remaining energy operations, including
Energy Industries, and the acquisition of, or joint ventures with, selected
companies in the food services industry.
 
  In September 1995, Zapata entered into an agreement (the "Purchase
Agreement") to sell the assets of Energy Industries (the "Energy Industries
Sale") to Weatherford Enterra, Inc. and its wholly owned subsidiary, Enterra
Compression Company (collectively, "Weatherford Enterra"). Pursuant to the
Purchase Agreement, Weatherford Enterra purchased from the Company all of the
assets of Energy Industries for approximately $131 million in cash, and assumed
certain liabilities of Energy Industries, subject to final post closing
adjustments. The Energy Industries Sale closed in December 1995 after receiving
stockholder approval. The Energy Industries Sale resulted in an after-tax gain
of approximately $14.0 million, which will be reflected in the Company's fiscal
1996 financial results.
 
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