Common use of Selected Financial Data Clause in Contracts

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating results: Oil and gas sales................. $ 371,098 $ 548,786 $ 631,838 $ 570,205 $ 598,850 ========= ========== ========== ========== ========== Impairment of oil and gas properties..................... $ 22,031 $ 270,187 $ -- $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ $ -- $ -- $ 32,694 $ -- $ -- ========= ========== ========== ========== ========== Net income (loss)................. $(274,769) $ (158,804) $ 221,854 $ 60,241 $ (435,081) ========= ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... $ (2,747) $ (1,588) $ 2,219 $ 603 $ (4,351) ========= ========== ========== ========== ========== Limited partners............... $(272,022) $ (157,216) $ 219,635 $ 59,638 $ (430,730) ========= ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... $ (28.30) $ (16.35) $ 22.85 $ 6.20 $ (44.81) ========= ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... $ 9.62 $ 25.26 $ 26.55(a) $ 19.89 $ 18.57 ========= ========== ========== ========== ========== At year end: Total assets...................... $ 684,133 $1,059,494 $1,460,408 $1,524,789 $1,658,967 ========= ========== ========== ========== ========== ---------------

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating results----------- OPERATING RESULTS: Oil and gas sales................. ..... $ 371,098 955,645 $1,411,247 $1,629,975 $1,387,494 $ 548,786 $ 631,838 $ 570,205 $ 598,850 1,568,783 ========== ========== ========== ========== =========== Impairment of oil and gas properties..................... ..... $ 22,031 306,043 $ 270,187 485,158 $ -- $1,008,771 $ -- $ 431,446 1,055,409 ========== ========== ========== ========== =========== Litigation settlement, net........ Net income (loss)..... $ -- (280,631) $ -- (7,029) $ 32,694 654,054 $ -- $ -- (755,419) $(1,032,621) ========== ========== ========== ========== =========== Net Allocation of net income (loss)................. $): Managing general partner.......... $ (274,7692,806) $ (158,80470) $ 221,854 $ 60,241 6,540 $ (435,0817,554) $ (10,326) ========== ========== ========== ========== =========== Allocation of net income (loss): Managing general partner....... Limited partners... $ (2,747277,825) $ (1,5886,959) $ 2,219 $ 603 647,514 $ (4,351747,865) $(1,022,295) ========== ========== ========== ========== =========== Limited Net income (loss) per limited partners............... $' interest........... $ (272,02223.91) $ (157,216.60) $ 219,635 $ 59,638 55.72 $ (430,73064.36) $ (87.98) ========== ========== ========== ========== =========== Limited partners' net income (loss) cash distributions per limited partnership partners' interest....................... ........... $ (28.30) 36.77 $ (16.35) 75.11 $ 22.85 70.97 $ 6.20 64.70 $ (44.81) 77.81 ========== ========== ========== ========== =========== Limited partners' cash distributions per limited partnership interest........... AT YEAR END: Total assets...... $2,667,803 $3,402,546 $4,289,878 $4,511,078 $ 9.62 $ 25.26 $ 26.55(a) $ 19.89 $ 18.57 5,976,067 ========== ========== ========== ========== ========== At year end: Total assets...................... $ 684,133 $1,059,494 $1,460,408 $1,524,789 $1,658,967 ========= ========== ========== ========== ========== ---------------ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $955,645 from $1,411,247 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 49,403 barrels of oil, 21,220 barrels of natural gas liquids ("NGLs") and 108,617 mcf of gas were sold, or 88,726 barrel of oil equivalents ("BOEs"). In 1997, 51,993 barrels of oil, 8,865 barrels of NGLs and 135,829 mcf of gas were sold, or 83,496 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted.

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating results---------- OPERATING RESULTS: Oil and gas sales................. $ 371,098 $ 548,786 $ 631,838 $ 570,205 $ 598,850 $1,453,492 $2,232,898 $2,627,636 $2,338,478 $2,402,964 ========= ========== ========== ========== ========== Impairment of oil and gas properties..................... $ 22,031 $ 270,187 $ -- $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ $ -- $ -- $ 32,694 848,304 $ -- $ -- ========== ========== ========== ========== ========== Impairment of oil and gas properties..................... $ 477,501 $ 732,890 $ 348,546 $ 922,203 $ -- ========== ========== ========== ========== ========== Net income (loss)................. $$ (274,769736,103) $ (158,80449,528) $1,803,894 $ (955,234) $ 221,854 $ 60,241 $ (435,08110,326) ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... $ (2,7477,361) $ (1,588495) $ 2,219 $ 603 18,039 $ (4,3519,553) $ (103) ========== ========== ========== ========== ========== Limited partners............... $$ (272,022728,742) $ (157,21649,033) $1,785,855 $ (945,681) $ 219,635 $ 59,638 $ (430,73010,223) ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... $ (28.3025.29) $ (16.351.70) $ 22.85 $ 6.20 61.99 $ (44.8132.82) $ (.35) ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... $ 9.62 19.54 $ 25.26 42.52 $ 26.55(a89.89(a) $ 19.89 34.93 $ 18.57 34.70 ========== ========== ========== ========== ========== At year endAT YEAR END: Total assets...................... $ 684,133 $1,059,494 3,466,459 $1,460,408 4,793,102 $1,524,789 6,171,831 $1,658,967 6,973,611 $8,966,767 ========== ========== ========== ========== ========== --------------- (a) Including litigation settlement per limited partnership interest of $29.15 in 1996.

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating results---------- OPERATING RESULTS: Oil and gas sales................. .............. $ 371,098 443,496 $ 548,786 753,775 $ 631,838 938,418 $ 570,205 754,343 $ 598,850 787,939 ========== ========== ========== ========== ========== Impairment of oil and gas properties..................... $ 22,031 $ 270,187 .................. $ -- $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ 6,231 $ -- $ -- $ 32,694 369,426 $ -- $ -- ========== ========== ========== ========== ========== Net income (loss)................. $.............. $ (274,76913,621) $ 255,412 $ 424,569 $ (158,804225,390) $ 221,854 $ 60,241 $ (435,081) 37,254 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... .... $ (2,747136) $ 2,554 $ 4,246 $ (1,5882,253) $ 2,219 $ 603 $ (4,351) 373 ========== ========== ========== ========== ========== Limited partners............... $............ $ (272,02213,485) $ 252,858 $ 420,323 $ (157,216223,137) $ 219,635 $ 59,638 $ (430,730) 36,881 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... ........ $ (28.301.20) $ 22.53 $ 37.46 $ (16.3519.88) $ 22.85 $ 6.20 $ (44.81) 3.29 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... ........ $ 9.62 24.99 $ 25.26 50.52 $ 26.55(a) 45.09 $ 19.89 39.64 $ 18.57 37.38 ========== ========== ========== ========== ========== At year endAT YEAR END: Total assets...................... $ 684,133 ................... $1,059,494 1,884,917 $1,460,408 2,212,937 $1,524,789 2,491,855 $1,658,967 2,578,655 $3,253,374 ========== ========== ========== ========== ========== ---------------ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 41% to $443,496 from $753,775 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 22,482 barrels of oil, 12,009 barrels of natural gas liquids ("NGLs") and 51,099 mcf of gas were sold, or 43,008 barrel of oil equivalents ("BOEs"). In 1997, 26,656 barrels of oil, 5,264 barrels of NGLs and 80,212 mcf of gas were sold, or 45,289 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating results---------- OPERATING RESULTS: Oil and gas sales................. .............. $ 371,098 $ 548,786 $ 631,838 $ 570,205 $ 598,850 764,787 $1,118,628 $1,382,265 $1,160,419 $1,266,515 ========== ========== ========== ========== ========== Impairment of oil and gas properties..................... .................. $ 22,031 275,430 $ 270,187 328,594 $ 22,474 $ 115,434 $ -- $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ $ -- $ -- $ 32,694 $ -- $ -- ========= ========== ========== ========== ========== Net income (loss)................. $.............. $ (274,769373,956) $ (158,80455,191) $ 221,854 544,919 $ 60,241 181,451 $ (435,081) 229,524 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... .... $ (2,7473,740) $ (1,588552) $ 2,219 5,449 $ 603 1,852 $ (4,351) 2,345 ========== ========== ========== ========== ========== Limited partners............... $............ $ (272,022370,216) $ (157,21654,639) $ 219,635 539,470 $ 59,638 179,599 $ (430,730) 227,179 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... ........ $ (28.3031.12) $ (16.354.59) $ 22.85 45.35 $ 6.20 15.10 $ (44.81) 19.10 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... ........ $ 9.62 23.66 $ 25.26 52.38 $ 26.55(a) 56.21 $ 19.89 48.84 $ 18.57 53.88 ========== ========== ========== ========== ========== At year endAT YEAR END: Total assets...................... $ 684,133 ................... $1,059,494 2,057,408 $1,460,408 2,727,510 $1,524,789 3,402,932 $1,658,967 3,580,821 $3,947,513 ========== ========== ========== ========== ========== ---------------ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $764,787 from $1,118,628 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 41,140 barrels of oil, 17,403 barrels of natural gas liquids ("NGLs") and 73,460 mcf of gas were sold, or 70,786 barrel of oil equivalents ("BOEs"). In 1997, 42,270 barrels of oil, 6,929 barrels of NGLs and 100,068 mcf of gas were sold, or 65,877 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating resultsOPERATING RESULTS: Oil and gas sales................. ............. $ 371,098 392,883 $ 548,786 608,207 $ 631,838 710,173 $ 570,205 613,929 $ 598,850 636,470 ========= ========== ========== ========== ========== Litigation settlement, net.... $ -- $ -- $ 43,618 $ -- $ -- ========= ========== ========== ========== ========== Impairment of oil and gas properties..................... ................. $ 22,031 294,610 $ 270,187 165,201 $ -- 2,277 $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ $ -- $ -- $ 32,694 $ -- 20,719 $ -- ========= ========== ========== ========== ========== Net income (loss)................. ............. $(274,769563,993) $ (158,80460,847) $ 221,854 312,582 $ 60,241 34,081 $ (435,081) 102,033 ========= ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... General partners........... $ (2,74749,472) $ (1,588) 31,736 $ 2,219 92,811 $ 603 35,122 $ (4,351) 45,462 ========= ========== ========== ========== ========== Limited partners............... ........... $(272,022514,521) $ (157,21692,583) $ 219,635 $ 59,638 219,771 $ (430,7301,041) $ 56,571 ========= ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... ....... $ (28.30105.20) $ (16.3518.93) $ 22.85 $ 6.20 44.93 $ (44.81.21) $ 11.57 ========= ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... ....... $ 9.62 19.57 $ 25.26 47.31 $ 26.55(a51.40(a) $ 19.89 40.96 $ 18.57 31.92 ========= ========== ========== ========== ========== At year endAT YEAR END: Total assets...................... .................. $ 684,133 474,528 $1,059,494 1,158,135 $1,460,408 1,526,765 $1,524,789 1,585,711 $1,658,967 1,786,274 ========= ========== ========== ========== ========== --------------- (a) Including litigation settlement per limited partnership interest of $6.96 in 1996.

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating results---------- OPERATING RESULTS: Oil and gas sales................. .............. $ 371,098 583,396 $ 548,786 856,926 $1,132,944 $ 631,838 932,815 $ 570,205 $ 598,850 982,923 ========== ========== ========== ========== ========== Impairment of oil and gas properties..................... .................. $ 22,031 306,826 $ 270,187 531,929 $ -- $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ 692,515 $ -- $ -- $ 32,694 $ -- $ -- ========== ========== ========== ========== ========== Net income (loss)................. $.............. $ (274,769444,718) $ (158,804269,363) $ 221,854 $ 60,241 488,019 $ (435,081589,248) $ 119,039 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... .... $ (2,7474,447) $ (1,5882,693) $ 2,219 $ 603 4,880 $ (4,3515,893) $ 1,304 ========== ========== ========== ========== ========== Limited partners............... $............ $ (272,022440,271) $ (157,216266,670) $ 219,635 $ 59,638 483,139 $ (430,730583,355) $ 117,735 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... ........ $ (28.3052.94) $ (16.3532.06) $ 22.85 $ 6.20 58.09 $ (44.8170.14) $ 14.16 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... ........ $ 9.62 28.57 $ 25.26 62.59 $ 26.55(a) 68.92 $ 19.89 56.70 $ 18.57 63.80 ========== ========== ========== ========== ========== At year endAT YEAR END: Total assets...................... $ 684,133 ................... $1,059,494 1,392,439 $1,460,408 2,099,131 $1,524,789 2,890,740 $1,658,967 3,021,200 $4,042,199 ========== ========== ========== ========== ========== ---------------ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $583,396 from $856,926 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 29,084 barrels of oil, 12,847 barrels of natural gas liquids ("NGLs") and 62,751 mcf of gas were sold, or 52,390 barrel of oil equivalents ("BOEs"). In 1997, 30,029 barrels of oil, 6,032 barrels of NGLs and 92,294 mcf of gas were sold, or 51,443 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ----------- ---------- ---------- ---------- ---------- Operating results----------- OPERATING RESULTS: Oil and gas sales................. .... $ 371,098 2,074,056 $3,033,675 $3,748,608 $3,147,004 $ 548,786 $ 631,838 $ 570,205 $ 598,850 3,434,740 =========== ========== ========== ========== =========== Impairment of oil and gas properties..................... .... $ 22,031 744,642 $ 270,187 891,257 $ 61,080 $ 312,969 $ -- $ -- $ 431,446 =========== ========== ========== ========== =========== Litigation settlement, net........ Net income (loss).... $(1,011,459) $ -- (149,382) $1,479,052 $ -- 493,276 $ 32,694 $ -- $ -- 619,939 =========== ========== ========== ========== =========== Net Allocation of net income (loss)................. $): Managing general partner......... $ (274,76910,115) $ (158,8041,494) $ 221,854 14,790 $ 60,241 5,035 $ (435,081) 6,335 =========== ========== ========== ========== =========== Allocation of net income Limited partners........ $(loss): Managing general partner....... $ (2,7471,001,344) $ (1,588147,888) $1,464,262 $ 2,219 488,241 $ 603 $ (4,351) 613,604 =========== ========== ========== ========== =========== Limited partners............... $' net income (272,022loss) per limited partnership interest.......... $ (31.04) $ (157,2164.58) $ 219,635 45.38 $ 59,638 15.13 $ (430,730) 19.02 =========== ========== ========== ========== =========== Limited partners' net income (loss) cash distributions per limited partnership interest....................... .......... $ (28.30) 23.66 $ (16.35) 52.38 $ 22.85 56.25 $ 6.20 48.87 $ (44.81) 53.89 =========== ========== ========== ========== =========== Limited partners' cash distributions per limited partnership interest........... AT YEAR END: Total assets......... $ 9.62 $ 25.26 $ 26.55(a) $ 19.89 $ 18.57 5,585,045 $7,399,664 $9,230,704 $9,713,167 $10,707,318 =========== ========== ========== ========== ========== At year end: Total assets...................... $ 684,133 $1,059,494 $1,460,408 $1,524,789 $1,658,967 ========= ========== ========== ========== ========== ---------------ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 32% to $2,074,056 from $3,033,675 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 111,585 barrels of oil, 47,190 barrels of natural gas liquids ("NGLs") and 199,215 mcf of gas were sold, or 191,978 barrel of oil equivalents ("BOEs"). In 1997, 114,621 barrels of oil, 18,786 barrels of NGLs and 271,374 mcf of gas were sold, or 178,636 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted.

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- ---------- Operating results: Oil and gas sales................. .............. $ 371,098 441,480 $ 548,786 643,882 $ 631,838 777,677 $ 570,205 661,198 $ 598,850 733,354 ========== ========== ========== ========== ========== Impairment of oil and gas properties..................... .................. $ 22,031 34,145 $ 270,187 321,019 $ -- $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ 583,706 $ -- $ -- $ 32,694 $ -- $ -- ========== ========== ========== ========== ========== Net income (loss)................. $.............. $ (274,76944,421) $ (158,804149,948) $ 221,854 $ 60,241 261,210 $ (435,081696,986) $ 2,920 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... .... $ (2,747444) $ (1,5881,499) $ 2,219 $ 603 2,612 $ (4,3516,960) $ 58 ========== ========== ========== ========== ========== Limited partners............... $............ $ (272,02243,977) $ (157,216148,449) $ 219,635 $ 59,638 258,598 $ (430,730690,026) $ 2,862 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... ........ $ (28.306.46) $ (16.3521.80) $ 22.85 $ 6.20 37.97 $ (44.81101.31) $ .42 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... ........ $ 9.62 28.44 $ 25.26 53.06 $ 26.55(a) 53.75 $ 19.89 48.45 $ 18.57 57.38 ========== ========== ========== ========== ========== At year end: Total assets...................... $ 684,133 ................... $1,059,494 1,385,777 $1,460,408 1,634,061 $1,524,789 2,146,498 $1,658,967 2,277,937 $3,289,433 ========== ========== ========== ========== ========== ---------------ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 31% to $441,480 from $643,882 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 21,587 barrels of oil, 11,328 barrels of natural gas liquids ("NGLs") and 47,086 mcf of gas were sold, or 40,763 barrel of oil equivalents ("BOEs"). In 1997, 21,972 barrels of oil, 4,763 barrels of NGLs and 68,973 mcf of gas were sold, or 38,231 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general partner's policy, the Partnership now accounts for processed natural gas production as processed natural 3 139 gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas). The average price received per barrel of oil decreased $6.21, or 32% from $19.41 in 1997 to $13.20 in 1998. The average price received per barrel of NGLs decreased $4.14, or 37% from $11.16 in 1997 to $7.02 in 1998. The average price received per mcf of gas decreased 31% in 1998 to $1.64 compared to $2.38 in 1997. 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 in 1998. Total costs and expenses decreased in 1998 to $492,078 as compared to $801,240 in 1997, a decrease of $309,162, or 39%. This decrease was primarily due to declines in the impairment of oil and gas properties, production costs and general and administrative expenses ("G&A"), offset by a slight increase in depletion. Production costs were $282,430 in 1998 and $305,774 in 1997, resulting in a $23,344 decline, or 8%. The decline includes a reduction in production taxes due to the decline in oil and gas revenues and less well maintenance costs. G&A's components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A decreased, in aggregate, 41% from $23,842 in 1997 to $14,124 in 1998. The Partnership paid the managing general partner $11,560 in 1998 and $20,526 in 1997 for G&A incurred on behalf of the Partnership. G&A is allocated, in part, to the Partnership by the managing general partner. Such allocated expenses are determined by the managing general partner based upon its judgement of the level of activity of the Partnership relative to the managing general partner's activities and other entities it manages. The method of allocation has been consistent over the past several years with certain modifications incorporated to reflect changes in Pioneer USA's overall business activities. 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"), the managing general partner reviews the Partnership's oil and gas properties for impairment whenever events or circumstances indicate a decline in the recoverability of the carrying value of the Partnership's assets may have occurred. Declining commodity prices prompted impairment reviews in 1998 and 1997. As a result of the review and evaluation of its long-lived assets for impairment, the Partnership recognized non-cash charges of $34,145 and $321,019 related to its oil and gas properties during 1998 and 1997, respectively. Depletion was $161,379 in 1998 compared to $150,605 in 1997. This represented an increase of $10,774, or 7%. This increase was primarily the result of a decline in proved reserves during 1998 due to the lower commodity prices, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 1997 and a reduction in oil production of 385 barrels for the period ended December 31, 1998 compared to the same period in 1997. 1997 compared to 1996 The Partnership's 1997 oil and gas revenues decreased 17% to $643,882 from $777,677 in 1996. The decrease in revenues resulted from declines in production and lower average prices received. In 1997, 21,972 barrels of oil, 4,763 barrels of NGLs and 68,973 mcf of gas were sold, or 38,231 BOEs. In 1996, 25,428 barrels of oil and 88,919 mcf of gas were sold, or 40,248 BOEs. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. As is described above in "Results of 4 140 Operations -- 1998 compared to 1997", the Partnership changed its method of accounting for processed natural gas to a dry gas basis in the fourth quarter of 1997. As a result of this change, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, 1997 and 1996 separate product volumes are not comparable. The declines in production volumes were primarily attributable to the decline characteristics of the Partnership's oil and gas properties. The average price received per barrel of oil decreased 10% from $21.62 in 1996 to $19.41 in 1997. The average price received per barrel of NGLs during 1997 was $11.16. The average price received per mcf of gas decreased 7% in 1997 to $2.38 compared to $2.56 in 1996. Total costs and expenses increased in 1997 to $801,240 as compared to $523,562 in 1996, an increase of $277,678, or 53%. This increase was primarily due to the impairment of oil and gas properties and an increase in production costs, offset by declines in loss on disposition of assets, depletion and G&A. Production costs were $305,774 in 1997 and $298,749 in 1996, resulting in a $7,025 increase. The increase was due to additional well maintenance costs, offset by a decrease in production taxes. During this period, G&A decreased, in aggregate, 9% from $26,252 in 1996 to $23,842 in 1997. The Partnership paid the managing general partner $20,526 in 1997 and $22,989 in 1996 for G&A incurred on behalf of the Partnership. The Partnership recognized a non-cash SFAS 121 impairment provision of $321,019 related to its oil and gas properties during the fourth quarter of 1997. Depletion was $150,605 in 1997 compared to $169,844 in 1996. This represented a decrease of $19,239, or 11%. This decrease was primarily attributable to a decline in oil production of 3,456 barrels from 1996. A loss on disposition of assets of $28,717 was recognized during 1996 resulting from the sale of one gas well and the write-off of remaining capitalized well costs of $35,532 less proceeds received of $6,815. IMPACT OF INFLATION AND CHANGING PRICES ON SALES AND NET INCOME

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating results---------- OPERATING RESULTS: Oil and gas sales................. .............. $ 371,098 $ 548,786 $ 631,838 $ 570,205 $ 598,850 692,090 $1,063,396 $1,346,937 $1,161,251 $1,292,563 ========== ========== ========== ========== ========== Impairment of oil and gas properties..................... .................. $ 22,031 298,622 $ 270,187 127,213 $ -- $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ 76,908 $ -- $ -- $ 32,694 $ -- $ -- ========== ========== ========== ========== ========== Net income (loss)................. $.............. $ (274,769416,064) $ (158,804) 168,261 $ 221,854 577,803 $ 60,241 263,533 $ (435,081) 245,360 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... .... $ (2,7474,161) $ (1,588) 1,683 $ 2,219 5,778 $ 603 2,686 $ (4,351) 2,505 ========== ========== ========== ========== ========== Limited partners............... $............ $ (272,022411,903) $ (157,216) 166,578 $ 219,635 572,025 $ 59,638 260,847 $ (430,730) 242,855 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... ........ $ (28.3034.02) $ (16.35) 13.76 $ 22.85 47.25 $ 6.20 21.55 $ (44.81) 20.06 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... ........ $ 9.62 17.30 $ 25.26 47.53 $ 26.55(a) 51.98 $ 19.89 45.35 $ 18.57 51.72 ========== ========== ========== ========== ========== At year endAT YEAR END: Total assets...................... $ 684,133 ................... $1,059,494 1,617,114 $1,460,408 2,261,689 $1,524,789 2,664,141 $1,658,967 2,771,529 $3,023,786 ========== ========== ========== ========== ========== ---------------ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 35% to $692,090 from $1,063,396 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 39,380 barrels of oil, 13,978 barrels of natural gas liquids ("NGLs") and 48,787 mcf of gas were sold, or 61,489 barrel of oil equivalents ("BOEs"). In 1997, 41,504 barrels of oil, 5,885 barrels of NGLs and 80,867 mcf of gas were sold, or 60,867 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating results---------- OPERATING RESULTS: Oil and gas sales................. .............. $ 371,098 $ 548,786 $ 631,838 $ 570,205 $ 598,850 774,533 $1,157,862 $1,411,568 $1,195,876 $1,183,360 ========== ========== ========== ========== ========== Impairment of oil and gas properties..................... .................. $ 22,031 405,308 $ 270,187 699,976 $ -- $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ 591,925 $ -- $ -- $ 32,694 $ -- $ -- ========== ========== ========== ========== ========== Net income (loss)................. $.............. $ (274,769514,812) $ (158,804331,171) $ 221,854 $ 60,241 600,634 $ (435,081334,438) $ 178,831 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... .... $ (2,7475,148) $ (1,5883,312) $ 2,219 $ 603 6,006 $ (4,3513,344) $ 1,788 ========== ========== ========== ========== ========== Limited partners............... $............ $ (272,022509,664) $ (157,216327,859) $ 219,635 $ 59,638 594,628 $ (430,730331,094) $ 177,043 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... ........ $ (28.3039.40) $ (16.3525.35) $ 22.85 $ 6.20 45.97 $ (44.8125.60) $ 13.69 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... ........ $ 9.62 27.90 $ 25.26 50.68 $ 26.55(a) 57.12 $ 19.89 44.53 $ 18.57 43.56 ========== ========== ========== ========== ========== At year endAT YEAR END: Total assets...................... $ 684,133 ................... $1,059,494 2,059,502 $1,460,408 2,953,618 $1,524,789 3,940,216 $1,658,967 4,121,722 $5,006,561 ========== ========== ========== ========== ========== ---------------ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 33% to $774,533 from $1,157,862 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 37,135 barrels of oil, 20,500 barrels of natural gas liquids ("NGLs") and 86,501 mcf of gas were sold, or 72,052 barrel of oil equivalents ("BOEs"). In 1997, 38,859 barrels of oil, 9,410 barrels of NGLs and 134,311 mcf of gas were sold, or 70,654 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating results---------- OPERATING RESULTS: Oil and gas sales................. .............. $ 371,098 $ 548,786 $ 631,838 $ 570,205 $ 598,850 873,012 $1,273,373 $1,632,595 $1,416,748 $1,325,311 ========== ========== ========== ========== ========== Impairment of oil and gas properties..................... .................. $ 22,031 295,542 $ 270,187 323,078 $ -- $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ 104,290 $ -- $ -- $ 32,694 $ -- $ -- ========== ========== ========== ========== ========== Net income (loss)................. $.............. $ (274,769177,905) $ (158,804) 222,730 $ 221,854 924,002 $ 60,241 483,679 $ (435,081) 466,370 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... .... $ (2,7471,779) $ (1,588) 2,227 $ 2,219 9,240 $ 603 4,837 $ (4,351) 4,664 ========== ========== ========== ========== ========== Limited partners............... $............ $ (272,022176,126) $ (157,216) 220,503 $ 219,635 914,762 $ 59,638 478,842 $ (430,730) 461,706 ========== ========== ========== ========== ========== Limited partners' net Net income (loss) per limited partnership partners' interest....................... .......... $ (28.3015.66) $ (16.35) 19.60 $ 22.85 81.32 $ 6.20 42.57 $ (44.81) 41.04 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership partners' interest........... .......... $ 9.62 36.76 $ 25.26 75.32 $ 26.55(a) 84.40 $ 19.89 70.24 $ 18.57 46.96 ========== ========== ========== ========== ========== At year endAT YEAR END: Total assets...................... $ 684,133 ................... $1,059,494 1,820,336 $1,460,408 2,424,808 $1,524,789 3,051,464 $1,658,967 3,131,023 $3,404,388 ========== ========== ========== ========== ========== ---------------ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 31% to $873,012 from $1,273,373 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 49,100 barrels of oil, 17,427 barrels of natural gas liquids ("NGLs") and 68,244 mcf of gas were sold, or 77,901 barrel of oil equivalents ("BOEs"). In 1997, 49,485 barrels of oil, 7,536 barrels of NGLs and 90,255 mcf of gas were sold, or 72,064 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general partner's policy, the Partnership now accounts for processed natural gas production as processed natural 3 139 gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating results---------- OPERATING RESULTS: Oil and gas sales................. .............. $ 371,098 430,499 $ 548,786 661,475 $ 631,838 837,849 $ 570,205 722,324 $ 598,850 804,039 ========== ========== ========== ========== ========== Impairment of oil and gas properties..................... .................. $ 22,031 185,784 $ 270,187 79,288 $ -- $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ 48,088 $ -- $ -- $ 32,694 $ -- $ -- ========== ========== ========== ========== ========== Net income (loss)................. $.............. $ (274,769258,625) $ (158,804) 105,740 $ 221,854 359,349 $ 60,241 163,626 $ (435,081) 152,612 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... .... $ (2,7472,586) $ (1,588) 1,057 $ 2,219 3,593 $ 603 1,668 $ (4,351) 1,558 ========== ========== ========== ========== ========== Limited partners............... $............ $ (272,022256,039) $ (157,216) 104,683 $ 219,635 355,756 $ 59,638 161,958 $ (430,730) 151,054 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... ........ $ (28.3034.00) $ (16.35) 13.90 $ 22.85 47.24 $ 6.20 21.51 $ (44.81) 20.06 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... ........ $ 9.62 17.30 $ 25.26 47.53 $ 26.55(a) 51.98 $ 19.89 45.34 $ 18.57 51.71 ========== ========== ========== ========== ========== At year endAT YEAR END: Total assets...................... $ 684,133 ................... $1,059,494 1,011,034 $1,460,408 1,411,804 $1,524,789 1,661,127 $1,658,967 1,728,891 $1,886,057 ========== ========== ========== ========== ========== ---------------ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 35% to $430,499 from $661,475 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 24,493 barrels of oil, 8,694 barrels of natural gas liquids ("NGLs") and 30,348 mcf of gas were sold, or 38,245 barrel of oil equivalents ("BOEs"). In 1997, 25,817 barrels of oil, 3,661 barrels of NGLs and 50,304 mcf of gas were sold, or 37,862 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- ---------- Operating results: Oil and gas sales................. $ 371,098 $ 548,786 $ 631,838 $ 570,205 $ 598,850 910,252 $1,402,306 $1,768,325 $1,433,517 $1,441,190 ========== ========== ========== ========== ========== Impairment of oil and gas properties..................... $ 22,031 $ 270,187 430,351 $1,194,023 $ -- $ -- 147,353 $ 431,446 491,050 ========== ========== ========== ========== ========== Litigation settlement, net........ $ -- $ -- $ 32,694 852,211 $ -- $ -- ========== ========== ========== ========== ========== Net income (loss)................. $$ (274,769784,583) $ (158,804811,642) $1,483,261 $ (12,017) $ 221,854 $ 60,241 $ (435,081474,032) ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... General partners............... $ (2,74752,520) $ (1,5881,662) $ 2,219 389,185 $ 603 104,436 $ (4,351) 34,602 ========== ========== ========== ========== ========== Limited partners............... $$ (272,022732,063) $ (157,216809,980) $1,094,076 $ (116,453) $ 219,635 $ 59,638 $ (430,730508,634) ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... $ (28.3037.53) $ (16.3541.53) $ 22.85 $ 6.20 56.09 $ (44.815.97) $ (26.08) ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... $ 9.62 20.73 $ 25.26 24.50 $ 26.55(a72.73(a) $ 19.89 21.54 $ 18.57 20.21 ========== ========== ========== ========== ========== At year end: Total assets...................... $ 684,133 $1,059,494 1,691,709 $1,460,408 3,015,116 $1,524,789 4,459,272 $1,658,967 4,865,672 $5,385,572 ========== ========== ========== ========== ========== ---------------

Selected Financial Data. The following table sets forth selected financial data for the years ended December 31: 1998 1997 1996 1995 1994 --------- ---------- ---------- ---------- ---------- Operating results---------- OPERATING RESULTS: Oil and gas sales................. .............. $ 371,098 578,573 $ 548,786 810,500 $1,052,408 $ 631,838 889,592 $ 570,205 $ 598,850 946,401 ========== ========== ========== ========== ========== Impairment of oil and gas properties..................... .................. $ 22,031 383,951 $ 270,187 547,793 $ -- $ -- $ 431,446 ========= ========== ========== ========== ========== Litigation settlement, net........ 479,522 $ -- $ -- $ 32,694 $ -- $ -- ========== ========== ========== ========== ========== Net income (loss)................. $.............. $ (274,769488,631) $ (158,804344,997) $ 221,854 $ 60,241 397,674 $ (435,081391,752) $ 5,033 ========== ========== ========== ========== ========== Allocation of net income (loss): Managing general partner....... .... $ (2,7474,887) $ (1,5883,450) $ 2,219 $ 603 3,977 $ (4,3513,918) $ 50 ========== ========== ========== ========== ========== Limited partners............... $............ $ (272,022483,744) $ (157,216341,547) $ 219,635 $ 59,638 393,697 $ (430,730387,834) $ 4,983 ========== ========== ========== ========== ========== Limited partners' net income (loss) per limited partnership interest....................... ........ $ (28.3054.03) $ (16.3538.14) $ 22.85 $ 6.20 43.97 $ (44.8143.31) $ .56 ========== ========== ========== ========== ========== Limited partners' cash distributions per limited partnership interest........... ........ $ 9.62 24.02 $ 25.26 50.67 $ 26.55(a) 54.14 $ 19.89 49.35 $ 18.57 52.50 ========== ========== ========== ========== ========== At year endAT YEAR END: Total assets...................... $ 684,133 ................... $1,059,494 1,334,302 $1,460,408 2,051,284 $1,524,789 2,848,468 $1,658,967 2,970,489 $3,781,914 ========== ========== ========== ========== ========== ---------------ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 1998 compared to 1997 The Partnership's 1998 oil and gas revenues decreased 29% to $578,573 from $810,500 in 1997. The decrease in revenues resulted from lower average prices received. In 1998, 31,155 barrels of oil, 12,210 barrels of natural gas liquids ("NGLs") and 52,254 mcf of gas were sold, or 52,074 barrel of oil equivalents ("BOEs"). In 1997, 31,020 barrels of oil, 4,628 NGLs and 70,802 mcf of gas were sold, or 47,448 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. Consistent with the managing general partner, the Partnership has historically accounted for processed natural gas production as wellhead production on a wet gas basis. Effective September 30, 1997, as a result of the merger with Mesa, the managing general partner accounts for processed natural gas production in two components: natural gas liquids and dry residue gas. As a result of the change in the managing general 3 139 partner's policy, the Partnership now accounts for processed natural gas production as processed natural gas liquids and dry residue gas. Consequently, separate product volumes will not be comparable for periods prior to September 30, 1997. Also, prices for gas products will not be comparable as the price per mcf for natural gas for the year ended December 31, 1998 is the price received for dry residue gas and the price per mcf for natural gas produced prior to October 1997 was presented as a price for wet gas (i.e., natural gas liquids combined with dry residue gas).