Common use of Basis of Presentation Clause in Contracts

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 9% to $186,502 from $205,570 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase in production. For the six months ended June 30, 1999, 9,297 barrels of oil, 3,592 barrels of natural gas liquids ("NGLs") and 24,947 mcf of gas were sold, or 17,047 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 barrels of oil, 2,988 barrels of NGLs and 23,991 mcf of gas were sold, or 16,740 BOEs. The average price received per barrel of oil decreased $1.29, or 9%, from $14.20 for the six months ended June 30, 1998 to $12.91 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, from $8.43 for the six months ended June 30, 1998 to $6.99 for the same period in 1999. The average price received per mcf of gas decreased 5% from $1.74 during the six months ended June 30, 1998 to $1.66 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 was received during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses increased to $238,811 for the six months ended June 30, 1999 as compared to $237,625 for the same period in 1998, an increase of $1,186. This increase was attributable to higher depletion costs and general and administrative expenses ("G&A"), offset by a decline in production costs. Production costs were $150,511 for the six months ended June 30, 1999 and $175,267 for the same period in 1998 resulting in a $24,756 decrease, or 14%. This decrease was due to declines in well maintenance costs and production taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased from $6,722 for the six months ended June 30, 1998 to $6,851 for the same period in 1999. Depletion was $81,449 for the six months ended June 30, 1999 compared to $55,636 for the same period in 1998. This represented an increase in depletion of $25,813, or 46%. This increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31, 1999 due to reserve revisions and lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of " ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17% to $101,099 from $86,663 for the three months ended June 30, 1999 and 1998, respectively. The increase in revenues resulted from increases in production 8 131 and higher average prices received. For the three months ended June 30, 1999, 4,285 barrels of oil, 1,840 barrels of NGLs and 12,774 mcf of gas were sold, or 8,254 BOEs. For the three months ended June 30, 1998, 4,429 barrels of oil, 957 barrels of NGLs and 8,265 mcf of gas were sold, or 6,764 BOEs. The average price received per barrel of oil increased 6%, from $13.39 for the three months ended June 30, 1998 to $14.21 for the same period in 1999. The average price received per barrel of NGLs increased 5% from $8.51 during the three months ended June 30, 1998 to $8.90 in 1999. The average price received per mcf of gas decreased 19% from $2.32 during the three months ended June 30, 1998 to $1.87 in 1999. A gain on disposition of assets of $199 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses decreased to $87,366 for the three months ended June 30, 1999 as compared to $131,831 for the same period in 1998, a decrease of $44,465, or 34%. This decrease was due to declines in production costs and depletion, offset by an increase in G&A. Production costs were $75,833 for the three months ended June 30, 1999 and $100,496 for the same period in 1998 resulting in a $24,663 decrease, or 25%. This decrease was primarily due to a decline in well maintenance costs. During this period, G&A increased, in aggregate, 58% from $2,240 for the three months ended June 30, 1998 to $3,538 for the same period in 1999. Depletion was $7,995 for the three months ended June 30, 1999 compared to $29,095 for the same period in 1998, a decrease of $21,100, or 73%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These However, these interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 917% to $186,502 179,090 from $205,570 215,630 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decline in production. For the six months ended June 30, 1999, 9,297 8,806 barrels of oil, 3,592 4,288 barrels of natural gas liquids ("NGLs") and 24,947 20,236 mcf of gas were sold, or 17,047 16,467 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 10,417 barrels of oil, 2,988 4,340 barrels of NGLs and 23,991 22,148 mcf of gas were sold, or 16,740 18,448 BOEs. The average price received per barrel of oil decreased $1.29, or 9%, 5% from $14.20 13.87 for the six months ended June 30, 1998 to $12.91 13.16 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, 6% from $8.43 for 7.79 during the six months ended June 30, 1998 to $6.99 7.36 for the same period in 1999. The average price received per mcf of gas decreased 57% from $1.74 1.68 during the six months ended June 30, 1998 to $1.66 1.56 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 1,281 was received recognized during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight six oil and gas wells during 1997. Costs and Expenses: Total costs and expenses increased to $238,811 for the six months ended June 30, 1999 as compared to $237,625 for the same period an overriding royalty interest in 1998, an increase of $1,186. This increase was attributable to higher depletion costs and general and administrative expenses ("G&A"), offset by a decline in production costs. Production costs were $150,511 for the six months ended June 30, 1999 and $175,267 for the same period in 1998 resulting in a $24,756 decrease, or 14%. This decrease was due to declines in one well maintenance costs and production taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased from $6,722 for the six months ended June 30, 1998 to $6,851 for the same period in 1999. Depletion was $81,449 for the six months ended June 30, 1999 compared to $55,636 for the same period in 1998. This represented an increase in depletion of $25,813, or 46%. This increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31, 1999 due to reserve revisions and lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of " ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17% to $101,099 from $86,663 for the three months ended June 30, 1999 and 1998, respectively. The increase in revenues resulted from increases in production 8 131 and higher average prices received. For the three months ended June 30, 1999, 4,285 barrels of oil, 1,840 barrels of NGLs and 12,774 mcf of gas were sold, or 8,254 BOEs. For the three months ended June 30, 1998, 4,429 barrels of oil, 957 barrels of NGLs and 8,265 mcf of gas were sold, or 6,764 BOEs. The average price received per barrel of oil increased 6%, from $13.39 for the three months ended June 30, 1998 to $14.21 for the same period in 1999. The average price received per barrel of NGLs increased 5% from $8.51 during the three months ended June 30, 1998 to $8.90 in 1999. The average price received per mcf of gas decreased 19% from $2.32 during the three months ended June 30, 1998 to $1.87 in 1999. A gain on disposition of assets of $199 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses decreased to $87,366 179,771 for the three six months ended June 30, 1999 as compared to $131,831 221,067 for the same period in 1998, a decrease of $44,46541,296, or 3419%. This decrease was due to declines in depletion, production costs and depletion, offset by an increase in G&A. general and administrative expenses ("G&A"). Production costs were $75,833 137,257 for the three six months ended June 30, 1999 and $100,496 139,621 for the same period in 1998 resulting in a $24,663 2,364 decrease, or 25%. This The decrease was primarily due to a decline declines in production taxes and ad valorem taxes, offset by an increase in well maintenance costs. During this period, G&A increased, costs incurred in aggregate, 58% from $2,240 for the three months ended June 30, 1998 an effort to $3,538 for the same period in 1999. Depletion was $7,995 for the three months ended June 30, 1999 compared to $29,095 for the same period in 1998, a decrease of $21,100, or 73%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998stimulate well production.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 917% to $186,502 435,655 from $205,570 525,141 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decrease in production. For the six months ended June 30, 1999, 9,297 21,588 barrels of oil, 3,592 10,021 barrels of natural gas liquids ("NGLs") and 24,947 49,899 mcf of gas were sold, or 17,047 39,926 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 26,017 barrels of oil, 2,988 10,006 barrels of NGLs and 23,991 56,185 mcf of gas were sold, or 16,740 45,387 BOEs. The average price received per barrel of oil decreased $1.29, or 9%, 3% from $14.20 13.90 for the six months ended June 30, 1998 to $12.91 13.55 for the same period in ended June 30, 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, 3% from $8.43 for 7.20 during the six months ended June 30, 1998 to $6.99 6.98 for the same period in 1999. The average price received per mcf of gas decreased 510% from $1.74 1.63 during the six months ended June 30, 1998 to $1.66 1.47 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 1,096 was received during the six months ended June 30, 1998 from post closing adjustments received 1999 from the sale disposal of eight oil and gas wells during 1997equipment on fully depleted wells. Costs and Expenses: Total costs and expenses increased decreased to $238,811 408,427 for the six months ended June 30, 1999 as compared to $237,625 427,306 for the same period in 1998, a decrease of $18,879, or 4%. This decrease was due to declines in production costs and depletion, offset by an increase of $1,186. This increase was attributable to higher depletion costs and in general and administrative expenses ("G&A"), offset by a decline in production costs. Production costs were $150,511 245,642 for the six months ended June 30, 1999 and $175,267 270,636 for the same period in 1998 resulting in a $24,756 24,994 decrease, or 149%. This decrease was due to resulted from declines in well maintenance costs costs, production taxes and production taxesworkover costs. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased increased, in aggregate, 62% from $6,722 17,857 for the six months ended June 30, 1998 to $6,851 28,880 for the same period in 1999. Depletion was $81,449 133,905 for the six months ended June 30, 1999 compared to $55,636 138,813 for the same period in 1998. This represented an increase in depletion , a decrease of $25,8134,908, or 464%. This increase decrease was due to a reduction in oil production of 4,429 barrels for the result of a combination of factors that included a decline in proved reserves during the period six months ended March 31June 30, 1999 due compared to reserve revisions the same period in 1998 and lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17% decreased slightly to $101,099 252,835 from $86,663 257,804 for the three months ended June 30, 1999 and 1998, respectively. The increase decrease in revenues resulted from increases a decrease in production 8 131 and production, offset by higher average prices received. For the three months ended June 30, 1999, 4,285 8 131 10,689 barrels of oil, 1,840 5,598 barrels of NGLs and 12,774 25,314 mcf of gas were sold, or 8,254 20,506 BOEs. For the three months ended June 30, 1998, 4,429 13,255 barrels of oil, 957 5,319 barrels of NGLs and 8,265 29,304 mcf of gas were sold, or 6,764 23,458 BOEs. The average price received per barrel of oil increased 6$2.49, or 19%, from $13.39 for 12.98 during the three months ended June 30, 1998 to $14.21 15.47 in 1999. The average price received per barrel of NGLs increased $1.02, or 14%, from $7.17 during the three months ended June 30, 1998 to $8.19 for the same period in 1999. The average price received per barrel mcf of NGLs gas increased 5% slightly from $8.51 during 1.63 for the three months ended June 30, 1998 to $8.90 in 1999. The average price received per mcf of gas decreased 19% from $2.32 during 1.65 for the three months ended June 30, 1998 to $1.87 same period in 1999. A gain on disposition of assets of $199 1,096 was received during the three months ended June 30, 1998 from post closing adjustments received 1999 from the sale disposal of eight oil and gas wells during 1997equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $87,366 189,838 for the three months ended June 30, 1999 as compared to $131,831 222,966 for the same period in 1998, a decrease of $44,46533,128, or 3415%. This decrease decline was due to declines a decrease in depletion and production costs and depletioncosts, offset by an increase in G&A. Production costs were $75,833 123,097 for the three months ended June 30, 1999 and $100,496 141,346 for the same period in 1998 resulting in a an $24,663 18,249 decrease, or 2513%. This decrease was primarily due to a decline declines in well maintenance costs and workover costs. During this period, G&A increased, in aggregate, 58% increased from $2,240 8,794 for the three months ended June 30, 1998 to $3,538 21,337 for the same period in 1999. Depletion was $7,995 45,404 for the three months ended June 30, 1999 compared to $29,095 72,826 for the same period in 1998, a decrease of $21,10027,422, or 7338%. This decrease was primarily attributable to a reduction in oil production of 2,566 barrels for the three months ended June 30, 1999 compared to the same period in 1998, an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 barrels for the three months ended June 30, 1999 compared to the same period in 1998 prices and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 914% to $186,502 271,361 from $205,570 315,946 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decrease in production. For the six months ended June 30, 1999, 9,297 13,613 barrels of oil, 3,592 6,704 barrels of natural gas liquids ("NGLs") and 24,947 27,934 mcf of gas were sold, or 17,047 24,973 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 15,952 barrels of oil, 2,988 5,861 barrels of NGLs and 23,991 26,363 mcf of gas were sold, or 16,740 26,207 BOEs. The average price received per barrel of oil decreased $1.291.17, or 98%, from $14.20 14.32 for the six months ended June 30, 1998 to $12.91 13.15 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 173%, from $8.43 for 7.77 during the six months ended June 30, 1998 to $6.99 7.55 for the same period in 1999. The average price received per mcf of gas decreased 56% from $1.74 1.59 during the six months ended June 30, 1998 to $1.66 1.49 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 156 was received during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight oil equipment on one saltwater disposal well plugged and gas wells during 1997abandoned in a prior year. Costs and Expenses: Total costs and expenses increased decreased to $238,811 243,270 for the six months ended June 30, 1999 as compared to $237,625 305,366 for the same period in 1998, an increase a decrease of $1,18662,096, or 20%. This increase decrease was attributable due to higher declines in production costs, depletion costs and general and administrative expenses ("G&A"), offset by a decline in production costs. Production costs were $150,511 168,666 for the six months ended June 30, 1999 and $175,267 208,136 for the same period in 1998 resulting in a $24,756 39,470 decrease, or 1419%. This decrease was due to declines in well maintenance costs costs, workover expenses, production taxes and production ad valorem taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased decreased, in aggregate, 13% from $6,722 9,332 for the six months ended June 30, 1998 to $6,851 8,141 for the same period in 1999. Depletion was $81,449 66,463 for the six months ended June 30, 1999 compared to $55,636 87,898 for the same period in 1998. This represented an increase in depletion , a decrease of $25,81321,435, or 4624%. This decrease was primarily due to a reduction in oil production of 2,339 barrels for the six months ended June 30, 1999 compared to the same period in 1998, an increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31June 30, 1999 due to reserve revisions the higher commodity prices and lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17% to $101,099 from $86,663 for the three months ended June 30, 1999 and 1998, respectively. The increase in revenues resulted from increases in production 8 131 and higher average prices received. For the three months ended June 30, 1999, 4,285 barrels of oil, 1,840 barrels of NGLs and 12,774 mcf of gas were sold, or 8,254 BOEs. For the three months ended June 30, 1998, 4,429 barrels of oil, 957 barrels of NGLs and 8,265 mcf of gas were sold, or 6,764 BOEs. The average price received per barrel of oil increased 6%, from $13.39 for the three months ended June 30, 1998 to $14.21 for the same period in 1999. The average price received per barrel of NGLs increased 5% from $8.51 during the three months ended June 30, 1998 to $8.90 in 1999. The average price received per mcf of gas decreased 19% from $2.32 during the three months ended June 30, 1998 to $1.87 in 1999. A gain on disposition of assets of $199 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses decreased to $87,366 for the three months ended June 30, 1999 as compared to $131,831 for the same period in 1998, a decrease of $44,465, or 34%. This decrease was due to declines in production costs and depletion, offset by an increase in G&A. Production costs were $75,833 for the three months ended June 30, 1999 and $100,496 for the same period in 1998 resulting in a $24,663 decrease, or 25%. This decrease was primarily due to a decline in well maintenance costs. During this period, G&A increased, in aggregate, 58% from $2,240 for the three months ended June 30, 1998 to $3,538 for the same period in 1999. Depletion was $7,995 for the three months ended June 30, 1999 compared to $29,095 for the same period in 1998, a decrease of $21,100, or 73%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 94% to $186,502 573,345 from $205,570 594,203 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase in production. For the six months ended June 30, 1999, 9,297 25,057 barrels of oil, 3,592 18,393 barrels of natural gas liquids ("NGLs") and 24,947 80,888 mcf of gas were sold, or 17,047 56,931 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 28,194 barrels of oil, 2,988 15,777 barrels of NGLs and 23,991 67,759 mcf of gas were sold, or 16,740 55,264 BOEs. The average price received per barrel of oil decreased $1.29, or 9%, 5% from $14.20 14.22 for the six months ended June 30, 1998 to $12.91 13.44 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, increased 8% from $8.43 for 6.55 during the six months ended June 30, 1998 to $6.99 7.07 for the same period in 1999. The average price received per mcf of gas decreased 5% from $1.74 1.33 during the six months ended June 30, 1998 to $1.66 1.32 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 2,100 was received during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997equipment on one fully depleted well. Costs and Expenses: Total costs and expenses increased decreased to $238,811 531,921 for the six months ended June 30, 1999 as compared to $237,625 627,698 for the same period in 1998, a decrease of $95,777, or 15%. This decrease was due to declines in depletion and production costs, offset by an increase of $1,186. This increase was attributable to higher depletion costs and in general and administrative expenses ("G&A"), offset by a decline in production costs. Production costs were $150,511 401,324 for the six months ended June 30, 1999 and $175,267 445,105 for the same period in 1998 resulting in a $24,756 43,781 decrease, or 1410%. This The decrease was due to declines in well maintenance costs costs, production taxes and production ad valorem taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased slightly from $6,722 19,165 for the six months ended June 30, 1998 to $6,851 19,644 for the same period in 1999. Depletion was $81,449 110,953 for the six months ended June 30, 1999 compared to $55,636 163,428 for the same period in 1998. This represented an increase in depletion , a decrease of $25,81352,475, or 4632%. This decrease was primarily attributable to an increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31June 30, 1999 due to reserve revisions and lower as a result of higher commodity prices, offset by a reduction in oil production of 3,137 barrels for the six months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17% to $101,099 from $86,663 for the three months ended June 30, 1999 and 1998, respectively. The increase in revenues resulted from increases in production 8 131 and higher average prices received. For the three months ended June 30, 1999, 4,285 barrels of oil, 1,840 barrels of NGLs and 12,774 mcf of gas were sold, or 8,254 BOEs. For the three months ended June 30, 1998, 4,429 barrels of oil, 957 barrels of NGLs and 8,265 mcf of gas were sold, or 6,764 BOEs. The average price received per barrel of oil increased 6%, from $13.39 for the three months ended June 30, 1998 to $14.21 for the same period in 1999. The average price received per barrel of NGLs increased 5% from $8.51 during the three months ended June 30, 1998 to $8.90 in 1999. The average price received per mcf of gas decreased 19% from $2.32 during the three months ended June 30, 1998 to $1.87 in 1999. A gain on disposition of assets of $199 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses decreased to $87,366 for the three months ended June 30, 1999 as compared to $131,831 for the same period in 1998, a decrease of $44,465, or 34%. This decrease was due to declines in production costs and depletion, offset by an increase in G&A. Production costs were $75,833 for the three months ended June 30, 1999 and $100,496 for the same period in 1998 resulting in a $24,663 decrease, or 25%. This decrease was primarily due to a decline in well maintenance costs. During this period, G&A increased, in aggregate, 58% from $2,240 for the three months ended June 30, 1998 to $3,538 for the same period in 1999. Depletion was $7,995 for the three months ended June 30, 1999 compared to $29,095 for the same period in 1998, a decrease of $21,100, or 73%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 97% to $186,502 621,001 from $205,570 669,914 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an a slight increase in production. For the six months ended June 30, 1999, 9,297 27,730 barrels of oil, 3,592 17,155 barrels of natural gas liquids ("NGLs") and 24,947 79,292 mcf of gas were sold, or 17,047 58,100 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 31,285 barrels of oil, 2,988 14,787 barrels of NGLs and 23,991 71,913 mcf of gas were sold, or 16,740 58,058 BOEs. The average price received per barrel of oil decreased $1.29, or 9%, 6% from $14.20 14.25 for the six months ended June 30, 1998 to $12.91 13.33 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, increased 6% from $8.43 for 7.46 during the six months ended June 30, 1998 to $6.99 7.94 for the same period in 1999. The average price received per mcf of gas decreased 58% from $1.74 1.58 during the six months ended June 30, 1998 to $1.66 1.45 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 157 was received recognized during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight two oil and gas wells and an overriding royalty interest in one well during 1997. Costs and Expenses: Total costs and expenses increased decreased to $238,811 558,526 for the six months ended June 30, 1999 as compared to $237,625 707,110 for the same period in 1998, an increase a decrease of $1,186148,584, or 21%. This increase was attributable to higher decrease resulted from declines in production costs, depletion costs and general and administrative expenses ("G&A"), offset by a decline in production costs. Production costs were $150,511 416,974 for the six months ended June 30, 1999 and $175,267 529,323 for the same period in 1998 resulting in a $24,756 112,349 decrease, or 1421%. This The decrease was due to declines in well maintenance costs and costs, production taxes, ad valorem taxes and workover expenses. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased decreased slightly from $6,722 21,809 for the six months ended June 30, 1998 to $6,851 21,326 for the same period in 1999. Depletion was $81,449 120,226 for the six months ended June 30, 1999 compared to $55,636 155,978 for the same period in 1998. This represented an increase a decrease in depletion of $25,81335,752, or 4623%. This decrease was primarily attributable to an increase was the result of a combination of factors that included a decline in proved reserves during for the period ended March 31June 30, 1999 due to reserve revisions and lower higher commodity prices, offset by a reduction in oil production of 3,555 barrels for the six months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. 8 131 Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17% to $101,099 379,880 from $86,663 324,521 for the three months ended June 30, 1999 and 1998, respectively. The increase in revenues resulted from increases in production 8 131 and higher average prices receivedreceived and an increase in production. For the three months ended June 30, 1999, 4,285 13,447 barrels of oil, 1,840 10,998 barrels of NGLs and 12,774 46,749 mcf of gas were sold, or 8,254 32,237 BOEs. For the three months ended June 30, 1998, 4,429 15,389 barrels of oil, 957 7,714 barrels of NGLs and 8,265 36,519 mcf of gas were sold, or 6,764 29,190 BOEs. The average price received per barrel of oil increased 6$1.45, or 11%, from $13.39 13.60 for the three months ended June 30, 1998 to $14.21 15.05 for the three months ended June 30, 1999. The average price received per barrel of NGLs increased $1.75, or 23%, from $7.59 during the three months ended June 30, 1998 to $9.34 for the same period in 1999. The average price received per barrel mcf of NGLs gas increased 53% from $8.51 1.55 during the three months ended June 30, 1998 to $8.90 in 1999. The average price received per mcf of gas decreased 19% from $2.32 during 1.60 for the three months ended June 30, 1998 to $1.87 same period in 1999. A gain on disposition of assets of $199 157 was received recognized during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight two oil and gas wells and an overriding royalty interest in one well during 1997. Costs and Expenses: Total costs and expenses decreased to $87,366 261,584 for the three months ended June 30, 1999 as compared to $131,831 348,081 for the same period in 1998, a decrease of $44,46586,497, or 3425%. This decrease was due to declines in resulted from lower production costs and depletion, offset by an increase in G&A. Production costs were $75,833 210,785 for the three months ended June 30, 1999 and $100,496 262,138 for the same period in 1998 resulting in a $24,663 51,353 decrease, or 2520%. This The decrease was primarily due to a decline in well maintenance costs. During this period, G&A increased, in aggregate, 5811% from $2,240 10,964 for the three months ended June 30, 1998 to $3,538 12,187 for the same period in 1999. Depletion was $7,995 38,612 for the three months ended June 30, 1999 compared to $29,095 74,979 for the same period in 1998, a decrease of $21,10036,367, or 7349%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 1,942 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 913% to $186,502 198,577 from $205,570 228,491 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decrease in production. For the six months ended June 30, 1999, 9,297 11,520 barrels of oil, 3,592 4,114 barrels of natural gas liquids ("NGLs") and 24,947 13,600 mcf of gas were sold, or 17,047 17,901 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 12,574 barrels of oil, 2,988 3,737 barrels of NGLs and 23,991 14,569 mcf of gas were sold, or 16,740 18,739 BOEs. The average price received per barrel of oil decreased $1.291.02, or 97%, from $14.20 14.14 for the six months ended June 30, 1998 to $12.91 13.12 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, 12% from $8.43 for 7.51 during the six months ended June 30, 1998 to $6.99 6.63 for the same period in 1999. The average price received per mcf of gas decreased 5% from $1.74 1.56 during the six months ended June 30, 1998 to $1.66 1.48 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 was received during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses increased decreased to $238,811 218,134 for the six months ended June 30, 1999 as compared to $237,625 231,373 for the same period in 1998, an increase a decrease of $1,18613,239, or 6%. This increase decrease was attributable due to higher depletion declines in production costs and general and administrative expenses expenses, ("G&A"), offset by a decline an increase in production costsdepletion. Production costs were $150,511 154,559 for the six months ended June 30, 1999 and $175,267 168,981 for the same period in 1998 1998, resulting in a $24,756 14,422 decrease, or 149%. This The decrease was due to declines in lower well maintenance costs and declines in production taxes and ad valorem taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased decreased, in aggregate, 7% from $6,722 7,593 for the six months ended June 30, 1998 to $6,851 7,085 for the same period in 1999. Depletion was $81,449 56,490 for the six months ended June 30, 1999 compared to $55,636 54,799 for the same period in 1998. This represented , an increase in depletion of $25,8131,691, or 463%. This increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31, 1999 due to reserve revisions and lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 1,054 barrels for the period six months ended June 30, 1999 compared to the same period in 1998. Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17% to $101,099 from $86,663 for the three months ended June 30, 1999 and 1998, respectively. The increase in revenues resulted from increases in production 8 131 and higher average prices received. For the three months ended June 30, 1999, 4,285 barrels of oil, 1,840 barrels of NGLs and 12,774 mcf of gas were sold, or 8,254 BOEs. For the three months ended June 30, 1998, 4,429 barrels of oil, 957 barrels of NGLs and 8,265 mcf of gas were sold, or 6,764 BOEs. The average price received per barrel of oil increased 6%, from $13.39 for the three months ended June 30, 1998 to $14.21 for the same period in 1999. The average price received per barrel of NGLs increased 5% from $8.51 during the three months ended June 30, 1998 to $8.90 in 1999. The average price received per mcf of gas decreased 19% from $2.32 during the three months ended June 30, 1998 to $1.87 in 1999. A gain on disposition of assets of $199 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses decreased to $87,366 for the three months ended June 30, 1999 as compared to $131,831 for the same period in 1998, a decrease of $44,465, or 34%. This decrease was due to declines in production costs and depletion, offset by an increase in G&A. Production costs were $75,833 for the three months ended June 30, 1999 and $100,496 for the same period in 1998 resulting in a $24,663 decrease, or 25%. This decrease was primarily due to a decline in well maintenance costs. During this period, G&A increased, in aggregate, 58% from $2,240 for the three months ended June 30, 1998 to $3,538 for the same period in 1999. Depletion was $7,995 for the three months ended June 30, 1999 compared to $29,095 for the same period in 1998, a decrease of $21,100, or 73%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 919% to $186,502 195,089 from $205,570 240,589 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decrease in production. For the six months ended June 30, 1999, 9,297 9,267 barrels of oil, 3,592 5,512 barrels of natural gas liquids ("NGLs") and 24,947 21,392 mcf of gas were sold, or 17,047 18,344 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 11,127 barrels of oil, 2,988 5,392 barrels of NGLs and 23,991 24,197 mcf of gas were sold, or 16,740 20,552 BOEs. The average price received per barrel of oil decreased $1.29, or 9%, 6% from $14.20 14.16 for the six months ended June 30, 1998 to $12.91 13.27 for the same period in ended June 30, 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, 10% from $8.43 for 7.92 during the six months ended June 30, 1998 to $6.99 7.10 for the same period in 1999. The average price received per mcf of gas decreased 58% from $1.74 1.67 during the six months ended June 30, 1998 to $1.66 1.54 for the same period in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 was received during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses increased decreased to $238,811 205,720 for the six months ended June 30, 1999 as compared to $237,625 227,750 for the same period in 1998, an increase a decrease of $1,18622,030, or 10%. This increase decrease was attributable due to higher depletion costs and declines in production costs, general and administrative expenses ("G&A"), offset by a decline in production costs) and depletion. Production costs were $150,511 132,744 for the six months ended June 30, 1999 and $175,267 148,593 for the same period in 1998 resulting in a $24,756 15,849 decrease, or 1411%. This The decrease was primarily due to declines in less well maintenance costs and declines in production taxes and ad valorem taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased decreased, in aggregate, 37%, from $6,722 11,447 for the six months ended June 30, 1998 to $6,851 7,264 for the same period in 1999. Depletion was $81,449 65,712 for the six months ended June 30, 1999 compared to $55,636 67,710 for the same period in 1998. This represented an increase in depletion , a decrease of $25,8131,998, or 463%. This increase decrease was primarily the result of a combination reduction in oil production of factors that included a decline 1,860 barrels for the six months ended June 30, 1999 compared to the same period in 1998, an increase in proved reserves during the period ended March 31June 30, 1999 due to reserve revisions higher commodity prices and lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17% decreased slightly to $101,099 111,127 from $86,663 113,383 for the three months ended June 30, 1999 and 1998, respectively. The increase decrease in revenues resulted from increases decreases in production 8 131 and lower average prices received from barrels of NGLs and mcf of gas, offset by a higher average prices receivedprice received per barrel of oil. For the three months ended June 30, 1999, 4,285 4,486 barrels of oil, 1,840 3,061 barrels of NGLs and 12,774 10,259 mcf of gas were sold, or 8,254 9,257 BOEs. For the three months ended June 30, 1998, 4,429 5,358 barrels of oil, 957 2,355 barrels of NGLs and 8,265 9,423 mcf of gas were sold, or 6,764 9,284 BOEs. 8 131 The average price received per barrel of oil increased 6$1.54, or 11%, from $13.39 13.45 for the three months ended June 30, 1998 to $14.21 14.99 for the same period in 1999. The average price received per barrel of NGLs increased 5decreased 10% from $8.51 9.60 during the three months ended June 30, 1998 to $8.90 8.62 for the same period in 1999. The average price received per mcf of gas decreased 1914% from $2.32 1.98 during the three months ended June 30, 1998 to $1.87 1.71 for the same period in 1999. A gain on disposition of assets of $199 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses decreased to $87,366 96,793 for the three months ended June 30, 1999 as compared to $131,831 117,506 for the same period in 1998, a decrease of $44,46520,713, or 3418%. This decrease was due to declines in depletion, production costs and depletion, offset by an increase in G&A. Production costs were $75,833 71,921 for the three months ended June 30, 1999 and $100,496 75,490 for the same period in 1998 resulting in a $24,663 3,569 decrease, or 255%. This The decrease was primarily due to a decline in less well maintenance costscosts and declines in production taxes and ad valorem taxes. During this period, G&A increaseddecreased, in aggregate, 58% 47%, from $2,240 7,201 for the three months ended June 30, 1998 to $3,538 3,806 for the same period in 1999. Depletion was $7,995 21,066 for the three months ended June 30, 1999 compared to $29,095 34,815 for the same period in 1998, a decrease of $21,10013,749, or 7339%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction decrease in oil production of 144 872 barrels for the three months ended June 30, 1999 as compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 913% to $186,502 319,242 from $205,570 367,337 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decrease in production. For the six months ended June 30, 1999, 9,297 18,522 barrels of oil, 3,592 6,611 barrels of natural gas liquids ("NGLs") and 24,947 21,869 mcf of gas were sold, or 17,047 28,778 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 20,218 barrels of oil, 2,988 6,010 barrels of NGLs and 23,991 23,433 mcf of gas were sold, or 16,740 30,134 BOEs. The average price received per barrel of oil decreased $1.291.01, or 97%, from $14.20 14.13 for the six months ended June 30, 1998 to $12.91 13.12 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, 12% from $8.43 for 7.51 during the six months ended June 30, 1998 to $6.99 6.63 for the same period in 1999. The average price received per mcf of gas decreased 5% from $1.74 1.56 during the six months ended June 30, 1998 to $1.66 1.48 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 was received during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses increased decreased to $238,811 350,648 for the six months ended June 30, 1999 as compared to $237,625 371,899 for the same period in 1998, an increase a decrease of $1,18621,251, or 6%. This increase decrease was attributable due to higher depletion declines in production costs and general and administrative expenses ("G&A"), offset by a decline an increase in production costsdepletion. Production costs were $150,511 248,624 for the six months ended June 30, 1999 and $175,267 271,671 for the same period in 1998 1998, resulting in a $24,756 23,047 decrease, or 148%. This decrease was due to declines in lower well maintenance costs and declines in production taxes and ad valorem taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased decreased, in aggregate, 7% from $6,722 12,145 for the six months ended June 30, 1998 to $6,851 11,247 for the same period in 1999. Depletion was $81,449 90,777 for the six months ended June 30, 1999 compared to $55,636 88,083 for the same period in 1998. This represented , an increase in depletion of $25,8132,694, or 463%. This increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31, 1999 due to reserve revisions and lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 1,696 barrels for the period six months ended June 30, 1999 compared to the same period in 1998. Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17% decreased to $101,099 172,712 from $86,663 174,479 for the three months ended June 30, 1999 and 1998, respectively. The increase decrease in revenues resulted from increases a decrease in production 8 131 and production, offset by higher average prices received. For the three months ended June 30, 1999, 4,285 8,848 barrels of oil, 1,840 3,546 barrels of NGLs and 12,774 10,109 mcf of gas were sold, or 8,254 14,079 BOEs. For the three 8 131 months ended June 30, 1998, 4,429 9,861 barrels of oil, 957 3,082 barrels of NGLs and 8,265 10,841 mcf of gas were sold, or 6,764 14,750 BOEs. The average price received per barrel of oil increased 6$1.06, or 8%, from $13.39 13.44 for the three months ended June 30, 1998 to $14.21 14.50 for the same period in 1999. The average price received per barrel of NGLs increased 5% slightly from $8.51 7.95 during the three months ended June 30, 1998 to $8.90 7.99 for the same period in 1999. The average price received per mcf of gas decreased 19% slightly from $2.32 1.61 during the three months ended June 30, 1998 to $1.87 1.59 in 1999. A gain on disposition of assets of $199 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses decreased to $87,366 170,041 for the three months ended June 30, 1999 as compared to $131,831 190,452 for the same period in 1998, a decrease of $44,46520,411, or 3411%. This decrease was due to declines in depletion, production costs and depletion, offset by an increase in G&A. Production costs were $75,833 137,477 for the three months ended June 30, 1999 and $100,496 141,492 for the same period in 1998 1998, resulting in a $24,663 4,015 decrease, or 253%. This The decrease was primarily due to a decline in lower well maintenance costs, ad valorem taxes and production taxes. During this period, G&A increased, in aggregate, 58% decreased slightly from $2,240 5,738 for the three months ended June 30, 1998 to $3,538 5,701 for the same period in 1999. Depletion was $7,995 26,863 for the three months ended June 30, 1999 compared to $29,095 43,222 for the same period in 1998, . This represented a decrease in depletion of $21,10016,359, or 7338%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 1,013 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These However, these interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 912% to $186,502 439,976 from $205,570 498,027 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decrease in production. For the six months ended June 30, 19991998, 9,297 21,076 barrels of oil, 3,592 12,312 barrels of natural gas liquids ("NGLs") and 24,947 52,185 mcf of gas were sold, or 17,047 42,086 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 24,420 barrels of oil, 2,988 9,853 barrels of NGLs and 23,991 48,253 mcf of gas were sold, or 16,740 42,315 BOEs. The average price received per barrel of oil decreased $1.291.40, or 910%, from $14.20 14.31 for the six months ended June 30, 1998 to $12.91 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, increased slightly from $8.43 for 7.13 during the six months ended June 30, 1998 to $6.99 7.21 for the same period in 1999. The average price received per mcf of gas decreased 56% from $1.74 1.62 during the six months ended June 30, 1998 to $1.66 1.52 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 3,702 was received recognized during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight 16 oil and gas wells during 1997. Costs and Expenses: Total costs and expenses increased decreased to $238,811 479,364 for the six months ended June 30, 1999 as compared to $237,625 536,523 for the same period in 1998, an increase a decrease of $1,18657,159, or 11%. This increase decrease was attributable due to higher depletion declines in depletion, production costs and general and administrative expenses ("G&A"), offset by a decline in production costs. Production costs were $150,511 369,495 for the six months ended June 30, 1999 and $175,267 380,882 for the same period in 1998 resulting in a an $24,756 11,387 decrease, or 143%. This The decrease was due to declines in well maintenance costs production taxes and production ad valorem taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased decreased, in aggregate, 7% from $6,722 16,961 for the six months ended June 30, 1998 to $6,851 15,845 for the same period in 1999. Depletion was $81,449 94,024 for the six months ended June 30, 1999 compared to $55,636 138,680 for the same period in 1998. This represented an increase in depletion 1999, a decrease of $25,81344,656, or 4632%. This decrease was primarily attributable to an increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31June 30, 1999 due to reserve revisions and lower higher commodity prices, offset by a reduction in oil production of 3,344 barrels for the six months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17% to $101,099 from $86,663 for the three months ended June 30, 1999 and 1998, respectively. The increase in revenues resulted from increases in production 8 131 and higher average prices received. For the three months ended June 30, 1999, 4,285 barrels of oil, 1,840 barrels of NGLs and 12,774 mcf of gas were sold, or 8,254 BOEs. For the three months ended June 30, 1998, 4,429 barrels of oil, 957 barrels of NGLs and 8,265 mcf of gas were sold, or 6,764 BOEs. The average price received per barrel of oil increased 6%, from $13.39 for the three months ended June 30, 1998 to $14.21 for the same period in 1999. The average price received per barrel of NGLs increased 5% from $8.51 during the three months ended June 30, 1998 to $8.90 in 1999. The average price received per mcf of gas decreased 19% from $2.32 during the three months ended June 30, 1998 to $1.87 in 1999. A gain on disposition of assets of $199 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses decreased to $87,366 for the three months ended June 30, 1999 as compared to $131,831 for the same period in 1998, a decrease of $44,465, or 34%. This decrease was due to declines in production costs and depletion, offset by an increase in G&A. Production costs were $75,833 for the three months ended June 30, 1999 and $100,496 for the same period in 1998 resulting in a $24,663 decrease, or 25%. This decrease was primarily due to a decline in well maintenance costs. During this period, G&A increased, in aggregate, 58% from $2,240 for the three months ended June 30, 1998 to $3,538 for the same period in 1999. Depletion was $7,995 for the three months ended June 30, 1999 compared to $29,095 for the same period in 1998, a decrease of $21,100, or 73%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 910% to $186,502 458,623 from $205,570 511,361 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decrease in production. For the six months ended June 30, 1999, 9,297 23,002 barrels of oil, 3,592 11,929 barrels of natural gas liquids ("NGLs") and 24,947 51,130 mcf of gas were sold, or 17,047 43,453 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 25,046 barrels of oil, 2,988 10,876 barrels of NGLs and 23,991 51,388 mcf of gas were sold, or 16,740 44,487 BOEs. The average price received per barrel of oil decreased $1.291.08, or 98%, from $14.20 14.09 for the six months ended June 30, 1998 to $12.91 13.01 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, slightly from $8.43 for 7.46 during the six months ended June 30, 1998 to $6.99 7.29 for the same period in 1999. The average price received per mcf of gas decreased 56% from $1.74 1.51 during the six months ended June 30, 1998 to $1.66 1.42 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 13,728 was received during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells equipment on one well abandoned in a prior year. Abandoned property costs of $3,943 were also incurred during 1997the six months ended June 30, 1998 related to this well. Costs and Expenses: Total costs and expenses increased decreased to $238,811 442,658 for the six months ended June 30, 1999 as compared to $237,625 494,200 for the same period in 1998, an increase a decrease of $1,18651,542, or 10%. This increase decrease was attributable due to higher depletion declines in depletion, production costs, abandoned property costs and general and administrative expenses ("G&A"), offset by a decline in production costs. Production costs were $150,511 302,253 for the six months ended June 30, 1999 and $175,267 315,652 for the same period in 1998 resulting in a $24,756 13,399 decrease, or 144%. This decrease was primarily due to declines a decline in well maintenance costs production taxes and production ad valorem taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased decreased, in aggregate, 10% from $6,722 15,341 for the six months ended June 30, 1998 to $6,851 13,759 for the same period in 1999. Depletion was $81,449 126,646 for the six months ended June 30, 1999 compared to $55,636 159,264 for the same period in 1998. This represented an increase in depletion , a decrease of $25,81332,618, or 4620%. This decrease was primarily attributable to an increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31June 30, 1999 due to reserve revisions and lower as a result of higher commodity prices, offset by a reduction in oil production of 2,044 barrels for the six months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. 8 131 Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 1713% to $101,099 267,074 from $86,663 235,929 for the three months ended June 30, 1999 and 1998, respectively. The increase in revenues resulted from increases in production 8 131 and higher average prices receivedreceived and an increase in production. For the three months ended June 30, 1999, 4,285 11,616 barrels of oil, 1,840 6,585 barrels of NGLs and 12,774 25,440 mcf of gas were sold, or 8,254 22,441 BOEs. For the three months ended June 30, 1998, 4,429 12,145 barrels of oil, 957 5,147 barrels of NGLs and 8,265 22,520 mcf of gas were sold, or 6,764 21,045 BOEs. The average price received per barrel of oil increased 6$1.26, or 9%, from $13.39 for 13.40 during the three months ended June 30, 1998 to $14.21 14.66 for the same period in 1999. The average price received per barrel of NGLs increased 5% $1.06, or 14%, from $8.51 7.70 during the three months ended June 30, 1998 to $8.90 8.76 for the same period in 1999. The average price received per mcf of gas decreased 19increased 3% from $2.32 1.49 during the three months ended June 30, 1998 to $1.87 1.54 for the same period in 1999. A gain on disposition of assets of $199 235 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells equipment on one well abandoned in a prior year. Abandoned property costs of $95 were also incurred during 1997the three months ended June 30, 1998 related to this well. Costs and Expenses: Total costs and expenses decreased to $87,366 215,431 for the three months ended June 30, 1999 as compared to $131,831 243,339 for the same period in 1998, a decrease of $44,46527,908, or 3411%. This decrease was due to declines in depletion and abandoned property costs, offset by increases in production costs and depletion, offset by an increase in G&A. Production costs were $75,833 158,350 for the three months ended June 30, 1999 and $100,496 154,727 for the same period in 1998 resulting in a $24,663 decrease, or 25%3,623 increase. This decrease increase was primarily due to additional well maintenance costs incurred in an effort to stimulate well production, offset by a decline in well maintenance costsad valorem taxes. During this period, G&A increased, in aggregate, 58% 13%, from $2,240 7,078 for the three months ended June 30, 1998 to $3,538 8,012 for the same period in 1999. Depletion was $7,995 49,069 for the three months ended June 30, 1999 compared to $29,095 81,439 for the same period in 1998, a decrease of $21,10032,370, or 7340%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 529 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results of operations are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 918% to $186,502 435,922 from $205,570 532,019 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decrease in production. For the six months ended June 30, 1999, 9,297 19,850 barrels of oil, 3,592 13,581 barrels of natural gas liquids ("NGLs") and 24,947 56,238 mcf of gas were sold, or 17,047 42,804 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 23,063 barrels of oil, 2,988 14,918 barrels of NGLs and 23,991 65,777 mcf of gas were sold, or 16,740 48,944 BOEs. The average price received per barrel of oil decreased $1.29, or 9%, 7% from $14.20 14.17 for the six months ended June 30, 1998 to $12.91 13.24 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, from $8.43 for 7.05 during the six months ended June 30, 1998 to $6.99 6.93 for the same period in 1999. The average price received per mcf of gas decreased 58% from $1.74 1.52 during the six months ended June 30, 1998 to $1.66 1.40 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain Gain on disposition of assets of $199 356 was received during the six months ended June 30, 1998 from post closing adjustments received from the sale disposal of eight oil and gas wells during 1997equipment on fully depleted wells. Costs and Expenses: Total costs and expenses increased decreased to $238,811 483,648 for the six months ended June 30, 1999 as compared to $237,625 528,511 for the same period in 1998, an increase a decrease of $1,18644,863, or 8%. This increase decrease was attributable due to higher depletion costs and declines in production costs, general and administrative expenses ("G&A"), offset by a decline in production depletion and abandoned property costs. Production costs were $150,511 344,743 for the six months ended June 30, 1999 and $175,267 383,272 for the same period in 1998 resulting in a $24,756 38,529 decrease, or 1410%. This decrease was due to declines in well maintenance costs and production taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased decreased, in aggregate, 18% from $6,722 15,961 for the six months ended June 30, 1998 to $6,851 13,078 for the same period in 1999. Depletion was $81,449 125,827 for the six months ended June 30, 1999 compared to $55,636 128,628 for the same period in 1998, a decline of $2,801. This represented decrease was primarily due to a reduction in oil production of 3,213 barrels for the six months ended June 30, 1999 compared to the same period in 1998, an increase in depletion of $25,813, or 46%. This increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31June 30, 1999 due to reserve revisions the higher commodity prices and lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for 1998. Abandoned property costs incurred during the period six months ended June 30, 1999 compared to 1998 totaled $650. These costs were in association with the same period in 1998plugging and abandonment of one uneconomical well. 8 131 Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17decreased 7% to $101,099 244,884 from $86,663 262,816 for the three months ended June 30, 1999 and 1998, respectively. The increase decrease in revenues resulted from increases declines in production 8 131 and production, offset by higher average prices received. For the three months ended June 30, 1999, 4,285 9,402 barrels of oil, 1,840 7,313 barrels of NGLs and 12,774 27,119 mcf of gas were sold, or 8,254 21,235 BOEs. For the three months ended June 30, 1998, 4,429 11,711 barrels of oil, 957 7,790 barrels of NGLs and 8,265 32,461 mcf of gas were sold, or 6,764 24,911 BOEs. The average price received per barrel of oil increased 6$1.52, or 11%, from $13.39 13.47 for the three months ended June 30, 1998 to $14.21 14.99 for the same period in 1999. The average price received per barrel of NGLs increased 5% $1.09, or 15%, from $8.51 7.24 during the three months ended June 30, 1998 to $8.90 8.33 for the same period in 1999. The average price received per mcf of gas decreased 19increased 6% from $2.32 1.50 during the three months ended June 30, 1998 to $1.87 1.59 in 1999. A gain Gain on disposition of assets of $199 285 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale disposal of eight oil and gas wells during 1997equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $87,366 205,269 for the three months ended June 30, 1999 as compared to $131,831 269,700 for the same period in 1998, a decrease of $44,46564,431, or 3424%. This decrease was due to declines in production costs and costs, depletion, offset by an increase in G&A. G&A and abandoned property costs. Production costs were $75,833 162,895 for the three months ended June 30, 1999 and $100,496 195,142 for the same period in 1998 resulting in a $24,663 32,247 decrease, or 2517%. This decrease was primarily due to a decline declines in well maintenance costscosts and production taxes, offset by an increase in ad valorem taxes. During this period, G&A increaseddecreased, in aggregate, 587% from $2,240 7,885 for the three months ended June 30, 1998 to $3,538 7,347 for the same period in 1999. Depletion was $7,995 35,027 for the three months ended June 30, 1999 compared to $29,095 66,558 for the same period in 1998, . This represented a decrease in depletion of $21,10031,531, or 7347%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 2,308 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.. Abandoned property costs during the three months ended June 30, 1998 totaled $115. These costs were incurred in association with the plugging and abandonment of one uneconomical well. LIQUIDITY AND CAPITAL RESOURCES Net Cash Provided by Operating Activities

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, 1998 as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 914% to $186,502 374,957 from $205,570 434,947 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decrease in production. For the six months ended June 30, 1999, 9,297 17,589 barrels of oil, 3,592 11,663 barrels of natural gas liquids ("NGLs") and 24,947 45,216 mcf of gas were sold, or 17,047 36,788 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 19,552 barrels of oil, 2,988 10,141 barrels of NGLs and 23,991 46,285 mcf of gas were sold, or 16,740 37,407 BOEs. The average price received per barrel of oil decreased $1.291.65, or 911%, from $14.20 14.65 for the six months ended June 30, 1998 to $12.91 13.00 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, 7% from $8.43 for 7.39 during the six months ended June 30, 1998 to $6.99 6.86 for the same period in 1999. The average price received per mcf of gas decreased 58% from $1.74 1.59 during the six months ended June 30, 1998 to $1.66 1.47 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 was received during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses increased decreased to $238,811 343,476 for the six months ended June 30, 1999 as compared to $237,625 402,718 for the same period in 1998, an increase a decrease of $1,18659,242, or 15%. This increase decrease was attributable due to higher declines in production costs, depletion costs and general and administrative expenses ("G&A"), offset by a decline in production costs. Production costs were $150,511 223,897 for the six months ended June 30, 1999 and $175,267 272,903 for the same period in 1998 resulting in a $24,756 49,006 decrease, or 1418%. This The decrease was due to declines in well maintenance costs and production taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased decreased, in aggregate, 19% from $6,722 13,920 for the six months ended June 30, 1998 to $6,851 11,249 for the same period in 1999. Depletion was $81,449 108,330 for the six months ended June 30, 1999 compared to $55,636 115,895 for the same period in 1998. This represented an increase in depletion , a decrease of $25,8137,565, or 467%. This decrease was due to a reduction in oil production of 1,963 barrels for the six months ended June 30, 1999 compared to the same period in 1998, an increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31June 30, 1999 due to reserve revisions the higher commodity prices and lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 173% to $101,099 209,933 from $86,663 203,910 for the three months ended June 30, 1999 and 1998, respectively. The increase in revenues resulted from increases in production 8 131 and higher average prices receivedreceived and an increase in production. For the three months ended June 30, 1999, 4,285 7,934 barrels of oil, 1,840 6,797 barrels of NGLs and 12,774 24,720 mcf of gas were sold, or 8,254 18,851 BOEs. For the three months ended June 30, 1998, 4,429 9,573 barrels of oil, 957 4,934 barrels of NGLs and 8,265 21,016 mcf of gas were sold, or 6,764 18,010 BOEs. 8 131 The average price received per barrel of oil increased 6%, 4% from $13.39 13.87 for the three months ended June 30, 1998 to $14.21 14.48 for the same period in 1999. The average price received per barrel of NGLs increased 58% from $8.51 7.62 during the three months ended June 30, 1998 to $8.90 8.21 for the same period in 1999. The average price received per mcf of gas decreased 19% slightly from $2.32 1.60 during the three months ended June 30, 1998 to $1.87 1.59 in 1999. A gain on disposition of assets of $199 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses decreased to $87,366 159,581 for the three months ended June 30, 1999 as compared to $131,831 200,434 for the same period in 1998, a decrease of $44,46540,853, or 3420%. This decrease was due to declines in depletion, production costs and depletion, offset by an increase in G&A. Production costs were $75,833 122,011 for the three months ended June 30, 1999 and $100,496 133,653 for the same period in 1998 resulting in a an $24,663 11,642 decrease, or 259%. This The decrease was primarily due to a decline declines in well maintenance costs, ad valorem taxes and production taxes. During this period, G&A increaseddecreased, in aggregate, 5810% from $2,240 6,989 for the three months ended June 30, 1998 to $3,538 6,298 for the same period in 1999. Depletion was $7,995 31,272 for the three months ended June 30, 1999 compared to $29,095 59,792 for the same period in 1998, a decrease of $21,10028,520, or 7348%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of due to higher commodity prices, a reduction in oil production of 144 1,639 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 915% to $186,502 671,386 from $205,570 789,531 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decrease in production. For the six months ended June 30, 1999, 9,297 30,733 barrels of oil, 3,592 18,546 barrels of natural gas liquids ("NGLs") and 24,947 90,088 mcf of gas were sold, or 17,047 64,294 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 36,457 barrels of oil, 2,988 17,823 barrels of NGLs and 23,991 90,366 mcf of gas were sold, or 16,740 69,341 BOEs. The average price received per barrel of oil decreased $1.29, or 9%, 7% from $14.20 14.18 for the six months ended June 30, 1998 to $12.91 13.20 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, slightly from $8.43 for 7.33 during the six months ended June 30, 1998 to $6.99 7.26 for the same period in 1999. The average price received per mcf of gas decreased 57% from $1.74 1.57 during the six months ended June 30, 1998 to $1.66 1.46 in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 765 was received during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight oil equipment on one saltwater disposal well plugged and gas wells during 1997abandoned in a prior year. Costs and Expenses: Total costs and expenses increased decreased to $238,811 643,652 for the six months ended June 30, 1999 as compared to $237,625 825,617 for the same period in ended June 30, 1998, an increase a decrease of $1,186181,965, or 22%. This increase decrease was attributable due to higher declines in production costs, depletion costs and general and administrative expenses ("G&A"), offset by a decline in production costs. Production costs were $150,511 455,004 for the six months ended June 30, 1999 and $175,267 596,233 for the same period in 1998 resulting in a decrease of $24,756 decrease141,229, or 1424%. This The decrease was due to declines in well maintenance costs costs, workover costs, production taxes and production ad valorem taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased decreased, in aggregate, 15% from $6,722 23,676 for the six months ended June 30, 1998 to $6,851 20,141 for the same period in 1999. Depletion was $81,449 168,507 for the six months ended June 30, 1999 compared to $55,636 205,708 for the same period in 1998. This represented an increase a decrease in depletion of $25,81337,201, or 4618%. This decrease was primarily attributable to a reduction in oil production of 5,724 barrels for the six months ended June 30, 1999 compared to the same period in 1998, an increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31June 30, 1999 due to reserve revisions higher commodity prices and lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17% to $101,099 from $86,663 for the three months ended June 30, 1999 and 1998, respectively. The increase in revenues resulted from increases in production 8 131 and higher average prices received. For the three months ended June 30, 1999, 4,285 barrels of oil, 1,840 barrels of NGLs and 12,774 mcf of gas were sold, or 8,254 BOEs. For the three months ended June 30, 1998, 4,429 barrels of oil, 957 barrels of NGLs and 8,265 mcf of gas were sold, or 6,764 BOEs. The average price received per barrel of oil increased 6%, from $13.39 for the three months ended June 30, 1998 to $14.21 for the same period in 1999. The average price received per barrel of NGLs increased 5% from $8.51 during the three months ended June 30, 1998 to $8.90 in 1999. The average price received per mcf of gas decreased 19% from $2.32 during the three months ended June 30, 1998 to $1.87 in 1999. A gain on disposition of assets of $199 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil and gas wells during 1997. Costs and Expenses: Total costs and expenses decreased to $87,366 for the three months ended June 30, 1999 as compared to $131,831 for the same period in 1998, a decrease of $44,465, or 34%. This decrease was due to declines in production costs and depletion, offset by an increase in G&A. Production costs were $75,833 for the three months ended June 30, 1999 and $100,496 for the same period in 1998 resulting in a $24,663 decrease, or 25%. This decrease was primarily due to a decline in well maintenance costs. During this period, G&A increased, in aggregate, 58% from $2,240 for the three months ended June 30, 1998 to $3,538 for the same period in 1999. Depletion was $7,995 for the three months ended June 30, 1999 compared to $29,095 for the same period in 1998, a decrease of $21,100, or 73%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.

Basis of Presentation. In the opinion of management, the unaudited financial statements of the Partnership as of June 30, 1999 and for the three and six months ended June 30, 1999 and 1998 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. ITEM 2. MANAGEMENT2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(1) RESULTS OF OPERATIONS Six months ended June 30, 1999 compared with six months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues decreased 918% to $186,502 407,249 from $205,570 497,072 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received, offset by an increase received and a decrease in production. For the six months ended June 30, 1999, 9,297 20,359 barrels of oil, 3,592 10,775 barrels of natural gas liquids ("NGLs") and 24,947 42,002 mcf of gas were sold, or 17,047 38,134 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 9,753 23,912 barrels of oil, 2,988 10,780 barrels of NGLs and 23,991 49,055 mcf of gas were sold, or 16,740 42,868 BOEs. The average price received per barrel of oil decreased $1.29, or 9%, 5% from $14.20 14.01 for the six months ended June 30, 1998 to $12.91 13.27 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, 11% from $8.43 for 7.68 during the six months ended June 30, 1998 to $6.99 6.87 for the same period in 1999. The average price received per mcf of gas decreased 57% from $1.74 during 1.62 for the six months ended June 30, 1998 to $1.66 1.50 for the same period in 1999. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the six months ended June 30, 1999. The volatility of commodity prices has had, and continues to have, a significant impact on the Partnership's revenues and operating cash flow and could result in additional decreases to the carrying value of the Partnership's oil and gas properties. A gain on disposition of assets of $199 5,435 was received during the six months ended June 30, 1998 from post closing adjustments received from the sale of eight oil equipment on one well plugged and gas wells abandoned during 19971998. Abandoned property costs of $20,389 were also incurred during the six months ended June 30, 1998 to plug and abandon this well. Costs and Expenses: Total costs and expenses increased decreased to $238,811 416,003 for the six months ended June 30, 1999 as compared to $237,625 522,831 for the same period in 1998, an increase a decrease of $1,186106,828, or 20%. This increase decrease was attributable due to higher depletion declines in production costs, depletion, abandoned property costs and general and administrative expenses ("G&A"), offset by a decline in production costs. Production costs were $150,511 293,691 for the six months ended June 30, 1999 and $175,267 339,770 for the same period in 1998 1998, resulting in a $24,756 46,079 decrease, or 14%. This The decrease was due to declines in well maintenance costs and production taxes, offset by an increase in ad valorem taxes. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A increased decreased, in aggregate, 18%, from $6,722 14,912 for the six months ended June 30, 1998 to $6,851 12,217 for the same period in 1999. Depletion was $81,449 110,095 for the six months ended June 30, 1999 compared to $55,636 147,760 for the same period in 1998. This represented an increase a decrease in depletion of $25,81337,665, or 4625%. This decrease was primarily due to a reduction in oil production of 3,553 barrels for the six months ended June 30, 1999 compared to the same period in 1998, an increase was the result of a combination of factors that included a decline in proved reserves during the period ended March 31June 30, 1999 due to reserve revisions higher commodity prices and lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of Of" ("SFAS 121") during the fourth quarter of 1998 and a reduction in oil production of 456 barrels for the period ended June 30, 1999 compared to the same period in 1998. 8 131 Three months ended June 30, 1999 compared with three months ended June 30, 1998 Revenues: The Partnership's oil and gas revenues increased 17decreased 3% to $101,099 231,875 from $86,663 239,503 for the three months ended June 30, 1999 and 1998, respectively. The increase decrease in revenues resulted from increases a decrease in production 8 131 and production, offset by higher average prices received. For the three months ended June 30, 1999, 4,285 10,068 barrels of oil, 1,840 5,881 barrels of NGLs and 12,774 20,138 mcf of gas were sold, or 8,254 19,305 BOEs. For the three months ended June 30, 1998, 4,429 11,839 barrels of oil, 957 5,487 barrels of NGLs and 8,265 24,366 mcf of gas were sold, or 6,764 21,387 BOEs. The average price received per barrel of oil increased 6$1.51, or 11%, from $13.39 13.40 for the three months ended June 30, 1998 to $14.21 14.91 for the same period in 1999. The average price received per barrel of NGLs increased 57% from $8.51 7.64 during the three months ended June 30, 1998 to $8.90 8.17 for the same period in 1999. The average price received per mcf of gas decreased 19increased 4% from $2.32 1.60 during the three months ended June 30, 1998 to $1.87 1.67 in 1999. A gain on disposition of assets of $199 4,779 was received during the three months ended June 30, 1998 from post closing adjustments received from the sale of eight oil equipment on one well plugged and gas wells abandoned during 19971998. Abandoned property costs of $10,743 were also incurred during the three months ended June 30, 1998 to plug and abandon this well. Costs and Expenses: Total costs and expenses decreased to $87,366 187,342 for the three months ended June 30, 1999 as compared to $131,831 269,651 for the same period in 1998, a decrease of $44,46582,309, or 3431%. This decrease was due to declines in production costs costs, abandoned property costs, G&A and depletion, offset by an increase in G&A. . Production costs were $75,833 144,074 for the three months ended June 30, 1999 and $100,496 172,207 for the same period in 1998 resulting in a $24,663 28,133 decrease, or 2516%. This The decrease was primarily due to a decline declines in well maintenance costscosts and production taxes, offset by an increase in ad valorem taxes. During this period, G&A increaseddecreased, in aggregate, 58% 3%, from $2,240 7,185 for the three months ended June 30, 1998 to $3,538 6,956 for the same period in 1999. Depletion was $7,995 36,312 for the three months ended June 30, 1999 compared to $29,095 79,516 for the same period in 1998, a decrease of $21,10043,204, or 7354%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 as a result of higher commodity prices, a reduction in oil production of 144 1,771 barrels for the three months ended June 30, 1999 compared to the same period in 1998 and a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1998.