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 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.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 18% to $435,922 from $532,019 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and a decrease in production. For the six months ended June 30, 1999, 19,850 barrels of oil, 13,581 barrels of natural gas liquids ("NGLs") and 56,238 mcf of gas were sold, or 42,804 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 barrels of oil, 14,918 barrels of NGLs and 65,777 mcf of gas were sold, or 48,944 BOEs. The average price received per barrel of oil decreased 7% from $14.17 for the six months ended June 30, 1998 to $13.24 for the same period in 1999. The average price received per barrel of NGLs decreased from $7.05 during the six months ended June 30, 1998 to $6.93 for the same period in 1999. The average price received per mcf of gas decreased 8% from $1.52 during the six months ended June 30, 1998 to $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. Gain on disposition of assets of $356 was received during the six months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $483,648 for the six months ended June 30, 1999 as compared to $528,511 for the same period in 1998, a decrease of $44,863, or 8%. This decrease was due to declines in production costs, general and administrative expenses ("G&A"), depletion and abandoned property costs. Production costs were $344,743 for the six months ended June 30, 1999 and $383,272 for the same period in 1998 resulting in a $38,529 decrease, or 10%. 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 decreased, in aggregate, 18% from $15,961 for the six months ended June 30, 1998 to $13,078 for the same period in 1999. Depletion was $125,827 for the six months ended June 30, 1999 compared to $128,628 for the same period in 1998, a decline of $2,801. This 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 proved reserves during the period ended June 30, 1999 due to the higher commodity prices 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" ("SFAS 121") during the fourth quarter of 1998. Abandoned property costs incurred during the six months ended June 30, 1998 totaled $650. These costs were in association with the plugging 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 decreased 7% to $244,884 from $262,816 for the three months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from declines in production, offset by higher average prices received. For the three months ended June 30, 1999, 9,402 barrels of oil, 7,313 barrels of NGLs and 27,119 mcf of gas were sold, or 21,235 BOEs. For the three months ended June 30, 1998, 11,711 barrels of oil, 7,790 barrels of NGLs and 32,461 mcf of gas were sold, or 24,911 BOEs. The average price received per barrel of oil increased $1.52, or 11%, from $13.47 for the three months ended June 30, 1998 to $14.99 for the same period in 1999. The average price received per barrel of NGLs increased $1.09, or 15%, from $7.24 during the three months ended June 30, 1998 to $8.33 for the same period in 1999. The average price received per mcf of gas increased 6% from $1.50 during the three months ended June 30, 1998 to $1.59 in 1999. Gain on disposition of assets of $285 was received during the three months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $205,269 for the three months ended June 30, 1999 as compared to $269,700 for the same period in 1998, a decrease of $64,431, or 24%. This decrease was due to declines in production costs, depletion, G&A and abandoned property costs. Production costs were $162,895 for the three months ended June 30, 1999 and $195,142 for the same period in 1998 resulting in a $32,247 decrease, or 17%. This decrease was due to declines in well maintenance costs and production taxes, offset by an increase in ad valorem taxes. During this period, G&A decreased, in aggregate, 7% from $7,885 for the three months ended June 30, 1998 to $7,347 for the same period in 1999. Depletion was $35,027 for the three months ended June 30, 1999 compared to $66,558 for the same period in 1998. This represented a decrease in depletion of $31,531, or 47%. 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 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 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.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 18% to $435,922 407,249 from $532,019 497,072 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and a decrease in production. For the six months ended June 30, 1999, 19,850 20,359 barrels of oil, 13,581 10,775 barrels of natural gas liquids ("NGLs") and 56,238 42,002 mcf of gas were sold, or 42,804 38,134 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 23,912 barrels of oil, 14,918 10,780 barrels of NGLs and 65,777 49,055 mcf of gas were sold, or 48,944 42,868 BOEs. The average price received per barrel of oil decreased 75% from $14.17 14.01 for the six months ended June 30, 1998 to $13.24 13.27 for the same period in 1999. The average price received per barrel of NGLs decreased 11% from $7.05 7.68 during the six months ended June 30, 1998 to $6.93 6.87 for the same period in 1999. The average price received per mcf of gas decreased 87% from $1.52 during 1.62 for the six months ended June 30, 1998 to $1.40 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. Gain A gain on disposition of assets of $356 5,435 was received during the six months ended June 30, 1998 from the disposal sale of oil and gas equipment on fully depleted wellsone well plugged and abandoned during 1998. 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 decreased to $483,648 416,003 for the six months ended June 30, 1999 as compared to $528,511 522,831 for the same period in 1998, a decrease of $44,863106,828, or 820%. This decrease was due to declines in production costs, depletion, abandoned property costs and general and administrative expenses ("G&A"), depletion and abandoned property costs. Production costs were $344,743 293,691 for the six months ended June 30, 1999 and $383,272 339,770 for the same period in 1998 1998, resulting in a $38,529 46,079 decrease, or 1014%. 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 decreased, in aggregate, 18% %, from $15,961 14,912 for the six months ended June 30, 1998 to $13,078 12,217 for the same period in 1999. Depletion was $125,827 110,095 for the six months ended June 30, 1999 compared to $128,628 147,760 for the same period in 1998, . This represented a decline decrease in depletion of $2,80137,665, or 25%. This decrease was primarily due to a reduction in oil production of 3,213 3,553 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 June 30, 1999 due to the higher commodity prices 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" ("SFAS 121") during the fourth quarter of 1998. Abandoned property costs incurred during the six months ended June 30, 1998 totaled $650. These costs were in association with the plugging 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 decreased 73% to $244,884 231,875 from $262,816 239,503 for the three months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from declines a decrease in production, offset by higher average prices received. For the three months ended June 30, 1999, 9,402 10,068 barrels of oil, 7,313 5,881 barrels of NGLs and 27,119 20,138 mcf of gas were sold, or 21,235 19,305 BOEs. For the three months ended June 30, 1998, 11,711 11,839 barrels of oil, 7,790 5,487 barrels of NGLs and 32,461 24,366 mcf of gas were sold, or 24,911 21,387 BOEs. The average price received per barrel of oil increased $1.521.51, or 11%, from $13.47 13.40 for the three months ended June 30, 1998 to $14.99 14.91 for the same period in 1999. The average price received per barrel of NGLs increased $1.09, or 15%, 7% from $7.24 7.64 during the three months ended June 30, 1998 to $8.33 8.17 for the same period in 1999. The average price received per mcf of gas increased 64% from $1.50 1.60 during the three months ended June 30, 1998 to $1.59 1.67 in 1999. Gain A gain on disposition of assets of $285 4,779 was received during the three months ended June 30, 1998 from the disposal sale of oil and gas equipment on fully depleted wellsone well plugged and abandoned during 1998. 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 $205,269 187,342 for the three months ended June 30, 1999 as compared to $269,700 269,651 for the same period in 1998, a decrease of $64,43182,309, or 2431%. This decrease was due to declines in production costs, depletionabandoned property costs, G&A and abandoned property costsdepletion. Production costs were $162,895 144,074 for the three months ended June 30, 1999 and $195,142 172,207 for the same period in 1998 resulting in a $32,247 28,133 decrease, or 1716%. This The decrease was due to declines in well maintenance costs and production taxes, offset by an increase in ad valorem taxes. During this period, G&A decreased, in aggregate, 7% 3%, from $7,885 7,185 for the three months ended June 30, 1998 to $7,347 6,956 for the same period in 1999. Depletion was $35,027 36,312 for the three months ended June 30, 1999 compared to $66,558 79,516 for the same period in 1998. This represented , a decrease in depletion of $31,53143,204, or 4754%. 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 2,308 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. 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 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.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 1813% to $435,922 319,242 from $532,019 367,337 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and a decrease in production. For the six months ended June 30, 1999, 19,850 18,522 barrels of oil, 13,581 6,611 barrels of natural gas liquids ("NGLs") and 56,238 21,869 mcf of gas were sold, or 42,804 28,778 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 20,218 barrels of oil, 14,918 6,010 barrels of NGLs and 65,777 23,433 mcf of gas were sold, or 48,944 30,134 BOEs. The average price received per barrel of oil decreased $1.01, or 7% %, from $14.17 14.13 for the six months ended June 30, 1998 to $13.24 13.12 for the same period in 1999. The average price received per barrel of NGLs decreased 12% from $7.05 7.51 during the six months ended June 30, 1998 to $6.93 6.63 for the same period in 1999. The average price received per mcf of gas decreased 85% from $1.52 1.56 during the six months ended June 30, 1998 to $1.40 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. Gain on disposition of assets of $356 was received during the six months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $483,648 350,648 for the six months ended June 30, 1999 as compared to $528,511 371,899 for the same period in 1998, a decrease of $44,86321,251, or 86%. This decrease was due to declines in production costs, costs and general and administrative expenses ("G&A"), depletion and abandoned property costsoffset by an increase in depletion. Production costs were $344,743 248,624 for the six months ended June 30, 1999 and $383,272 271,671 for the same period in 1998 1998, resulting in a $38,529 23,047 decrease, or 108%. 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 decreased, in aggregate, 187% from $15,961 12,145 for the six months ended June 30, 1998 to $13,078 11,247 for the same period in 1999. Depletion was $125,827 90,777 for the six months ended June 30, 1999 compared to $128,628 88,083 for the same period in 1998, a decline of $2,801. This 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 of $2,694, or 3%. This increase was the result of a combination of factors that included a decline in proved reserves during the period ended June 30March 31, 1999 due to the higher reserve revisions and lower commodity prices and 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. Abandoned property costs incurred during 1998 and a reduction in oil production of 1,696 barrels for the six months ended June 30, 1998 totaled $6501999 compared to the same period in 1998. These costs were in association with the plugging 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 decreased 7% to $244,884 172,712 from $262,816 174,479 for the three months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from declines a decrease in production, offset by higher average prices received. For the three months ended June 30, 1999, 9,402 8,848 barrels of oil, 7,313 3,546 barrels of NGLs and 27,119 10,109 mcf of gas were sold, or 21,235 14,079 BOEs. For the three 8 131 months ended June 30, 1998, 11,711 9,861 barrels of oil, 7,790 3,082 barrels of NGLs and 32,461 10,841 mcf of gas were sold, or 24,911 14,750 BOEs. The average price received per barrel of oil increased $1.521.06, or 118%, from $13.47 13.44 for the three months ended June 30, 1998 to $14.99 14.50 for the same period in 1999. The average price received per barrel of NGLs increased $1.09, or 15%, slightly from $7.24 7.95 during the three months ended June 30, 1998 to $8.33 7.99 for the same period in 1999. The average price received per mcf of gas increased 6% decreased slightly from $1.50 1.61 during the three months ended June 30, 1998 to $1.59 in 1999. Gain on disposition of assets of $285 was received during the three months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $205,269 170,041 for the three months ended June 30, 1999 as compared to $269,700 190,452 for the same period in 1998, a decrease of $64,43120,411, or 2411%. This decrease was due to declines in production costs, depletion, G&A production costs and abandoned property costs. G&A. Production costs were $162,895 137,477 for the three months ended June 30, 1999 and $195,142 141,492 for the same period in 1998 1998, resulting in a $32,247 4,015 decrease, or 173%. This The decrease was due to declines in lower well maintenance costs costs, ad valorem taxes and production taxes, offset by an increase in ad valorem taxes. During this period, G&A decreased, in aggregate, 7% decreased slightly from $7,885 5,738 for the three months ended June 30, 1998 to $7,347 5,701 for the same period in 1999. Depletion was $35,027 26,863 for the three months ended June 30, 1999 compared to $66,558 43,222 for the same period in 1998. This represented a decrease in depletion of $31,53116,359, or 4738%. 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 2,308 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. 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 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 189% to $435,922 186,502 from $532,019 205,570 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and a decrease received, offset by an increase in production. For the six months ended June 30, 1999, 19,850 9,297 barrels of oil, 13,581 3,592 barrels of natural gas liquids ("NGLs") and 56,238 24,947 mcf of gas were sold, or 42,804 17,047 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 9,753 barrels of oil, 14,918 2,988 barrels of NGLs and 65,777 23,991 mcf of gas were sold, or 48,944 16,740 BOEs. The average price received per barrel of oil decreased 7% $1.29, or 9%, from $14.17 14.20 for the six months ended June 30, 1998 to $13.24 12.91 for the same period in 1999. The average price received per barrel of NGLs decreased $1.44, or 17%, from $7.05 during 8.43 for the six months ended June 30, 1998 to $6.93 6.99 for the same period in 1999. The average price received per mcf of gas decreased 85% from $1.52 1.74 during the six months ended June 30, 1998 to $1.40 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. Gain A gain on disposition of assets of $356 199 was received during the six months ended June 30, 1998 from post closing adjustments received from the disposal sale of eight oil and gas equipment on fully depleted wellswells during 1997. Costs and Expenses: Total costs and expenses decreased increased to $483,648 238,811 for the six months ended June 30, 1999 as compared to $528,511 237,625 for the same period in 1998, a decrease an increase of $44,863, or 8%1,186. This decrease increase was due attributable to declines in production costs, higher depletion costs and general and administrative expenses ("G&A"), depletion and abandoned property offset by a decline in production costs. Production costs were $344,743 150,511 for the six months ended June 30, 1999 and $383,272 175,267 for the same period in 1998 resulting in a $38,529 24,756 decrease, or 1014%. 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 decreased, in aggregate, 18% increased from $15,961 6,722 for the six months ended June 30, 1998 to $13,078 6,851 for the same period in 1999. Depletion was $125,827 81,449 for the six months ended June 30, 1999 compared to $128,628 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 of $2,801. This 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 proved reserves during the period ended June 30March 31, 1999 due to the higher reserve revisions and lower commodity prices and 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 OfOf " ("SFAS 121") during the fourth quarter of 1998. Abandoned property costs incurred during 1998 and a reduction in oil production of 456 barrels for the six months period ended June 30, 1998 totaled $6501999 compared to the same period in 1998. These costs were in association with the plugging 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 decreased 7increased 17% to $244,884 101,099 from $262,816 86,663 for the three months ended June 30, 1999 and 1998, respectively. The decrease increase in revenues resulted from declines increases in production, offset by production 8 131 and higher average prices received. For the three months ended June 30, 1999, 9,402 4,285 barrels of oil, 7,313 1,840 barrels of NGLs and 27,119 12,774 mcf of gas were sold, or 21,235 8,254 BOEs. For the three months ended June 30, 1998, 11,711 4,429 barrels of oil, 7,790 957 barrels of NGLs and 32,461 8,265 mcf of gas were sold, or 24,911 6,764 BOEs. The average price received per barrel of oil increased $1.52, or 116%, from $13.47 13.39 for the three months ended June 30, 1998 to $14.99 14.21 for the same period in 1999. The average price received per barrel of NGLs increased $1.09, or 15%, 5% from $7.24 8.51 during the three months ended June 30, 1998 to $8.33 for the same period 8.90 in 1999. The average price received per mcf of gas increased 6decreased 19% from $1.50 2.32 during the three months ended June 30, 1998 to $1.59 1.87 in 1999. Gain A gain on disposition of assets of $285 199 was received during the three months ended June 30, 1998 from post closing adjustments received from the disposal sale of eight oil and gas equipment on fully depleted wellswells during 1997. Costs and Expenses: Total costs and expenses decreased to $205,269 87,366 for the three months ended June 30, 1999 as compared to $269,700 131,831 for the same period in 1998, a decrease of $64,43144,465, or 2434%. This decrease was due to declines in production costs, costs and depletion, G&A and abandoned property costs. offset by an increase in G&A. Production costs were $162,895 75,833 for the three months ended June 30, 1999 and $195,142 100,496 for the same period in 1998 resulting in a $32,247 24,663 decrease, or 1725%. This decrease was primarily due to declines a decline in well maintenance costs and production taxes, offset by an increase in ad valorem taxescosts. During this period, G&A decreasedincreased, in aggregate, 758% from $7,885 2,240 for the three months ended June 30, 1998 to $7,347 3,538 for the same period in 1999. Depletion was $35,027 7,995 for the three months ended June 30, 1999 compared to $66,558 29,095 for the same period in 1998. This represented , a decrease in depletion of $31,53121,100, or 4773%. 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 2,308 144 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. 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 However, 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 1812% to $435,922 439,976 from $532,019 498,027 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and a decrease in production. For the six months ended June 30, 19991998, 19,850 21,076 barrels of oil, 13,581 12,312 barrels of natural gas liquids ("NGLs") and 56,238 52,185 mcf of gas were sold, or 42,804 42,086 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 24,420 barrels of oil, 14,918 9,853 barrels of NGLs and 65,777 48,253 mcf of gas were sold, or 48,944 42,315 BOEs. The average price received per barrel of oil decreased 7% $1.40, or 10%, from $14.17 14.31 for the six months ended June 30, 1998 to $13.24 12.91 for the same period in 1999. The average price received per barrel of NGLs decreased increased slightly from $7.05 7.13 during the six months ended June 30, 1998 to $6.93 7.21 for the same period in 1999. The average price received per mcf of gas decreased 86% from $1.52 1.62 during the six months ended June 30, 1998 to $1.40 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. Gain A gain on disposition of assets of $356 3,702 was received recognized during the six months ended June 30, 1998 from post closing adjustments received from the disposal sale of 16 oil and gas equipment on fully depleted wellswells during 1997. Costs and Expenses: Total costs and expenses decreased to $483,648 479,364 for the six months ended June 30, 1999 as compared to $528,511 536,523 for the same period in 1998, a decrease of $44,86357,159, or 811%. This decrease was due to declines in depletion, production costs, costs and general and administrative expenses ("G&A"), depletion and abandoned property costs. Production costs were $344,743 369,495 for the six months ended June 30, 1999 and $383,272 380,882 for the same period in 1998 resulting in a an $38,529 11,387 decrease, or 103%. 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 decreased, in aggregate, 187% from $15,961 16,961 for the six months ended June 30, 1998 to $13,078 15,845 for the same period in 1999. Depletion was $125,827 94,024 for the six months ended June 30, 1999 compared to $128,628 138,680 for the same period in 19981999, a decline decrease of $2,80144,656, or 32%. This decrease was primarily attributable to an increase in proved reserves during the period ended June 30, 1999 due to higher commodity prices, a reduction in oil production of 3,213 3,344 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 June 30, 1999 due to the higher commodity prices 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" ("SFAS 121") during the fourth quarter of 1998. Abandoned property costs incurred during the six months ended June 30, 1998 totaled $650. These costs were in association with the plugging 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 decreased 7% to $244,884 from $262,816 for the three months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from declines in production, offset by higher average prices received. For the three months ended June 30, 1999, 9,402 barrels of oil, 7,313 barrels of NGLs and 27,119 mcf of gas were sold, or 21,235 BOEs. For the three months ended June 30, 1998, 11,711 barrels of oil, 7,790 barrels of NGLs and 32,461 mcf of gas were sold, or 24,911 BOEs. The average price received per barrel of oil increased $1.52, or 11%, from $13.47 for the three months ended June 30, 1998 to $14.99 for the same period in 1999. The average price received per barrel of NGLs increased $1.09, or 15%, from $7.24 during the three months ended June 30, 1998 to $8.33 for the same period in 1999. The average price received per mcf of gas increased 6% from $1.50 during the three months ended June 30, 1998 to $1.59 in 1999. Gain on disposition of assets of $285 was received during the three months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $205,269 for the three months ended June 30, 1999 as compared to $269,700 for the same period in 1998, a decrease of $64,431, or 24%. This decrease was due to declines in production costs, depletion, G&A and abandoned property costs. Production costs were $162,895 for the three months ended June 30, 1999 and $195,142 for the same period in 1998 resulting in a $32,247 decrease, or 17%. This decrease was due to declines in well maintenance costs and production taxes, offset by an increase in ad valorem taxes. During this period, G&A decreased, in aggregate, 7% from $7,885 for the three months ended June 30, 1998 to $7,347 for the same period in 1999. Depletion was $35,027 for the three months ended June 30, 1999 compared to $66,558 for the same period in 1998. This represented a decrease in depletion of $31,531, or 47%. 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 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 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.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 1813% to $435,922 198,577 from $532,019 228,491 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and a decrease in production. For the six months ended June 30, 1999, 19,850 11,520 barrels of oil, 13,581 4,114 barrels of natural gas liquids ("NGLs") and 56,238 13,600 mcf of gas were sold, or 42,804 17,901 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 12,574 barrels of oil, 14,918 3,737 barrels of NGLs and 65,777 14,569 mcf of gas were sold, or 48,944 18,739 BOEs. The average price received per barrel of oil decreased $1.02, or 7% %, from $14.17 14.14 for the six months ended June 30, 1998 to $13.24 13.12 for the same period in 1999. The average price received per barrel of NGLs decreased 12% from $7.05 7.51 during the six months ended June 30, 1998 to $6.93 6.63 for the same period in 1999. The average price received per mcf of gas decreased 85% from $1.52 1.56 during the six months ended June 30, 1998 to $1.40 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. Gain on disposition of assets of $356 was received during the six months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $483,648 218,134 for the six months ended June 30, 1999 as compared to $528,511 231,373 for the same period in 1998, a decrease of $44,86313,239, or 86%. This decrease was due to declines in production costs, costs and general and administrative expenses expenses, ("G&A"), depletion and abandoned property costsoffset by an increase in depletion. Production costs were $344,743 154,559 for the six months ended June 30, 1999 and $383,272 168,981 for the same period in 1998 1998, resulting in a $38,529 14,422 decrease, or 109%. 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 decreased, in aggregate, 187% from $15,961 7,593 for the six months ended June 30, 1998 to $13,078 7,085 for the same period in 1999. Depletion was $125,827 56,490 for the six months ended June 30, 1999 compared to $128,628 54,799 for the same period in 1998, a decline of $2,801. This 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 of $1,691, or 3%. This increase was the result of a combination of factors that included a decline in proved reserves during the period ended June 30March 31, 1999 due to the higher reserve revisions and lower commodity prices and 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. Abandoned property costs incurred during 1998 and a reduction in oil production of 1,054 barrels for the six months ended June 30, 1998 totaled $6501999 compared to the same period in 1998. These costs were in association with the plugging 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 decreased 7% to $244,884 from $262,816 for the three months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from declines in production, offset by higher average prices received. For the three months ended June 30, 1999, 9,402 barrels of oil, 7,313 barrels of NGLs and 27,119 mcf of gas were sold, or 21,235 BOEs. For the three months ended June 30, 1998, 11,711 barrels of oil, 7,790 barrels of NGLs and 32,461 mcf of gas were sold, or 24,911 BOEs. The average price received per barrel of oil increased $1.52, or 11%, from $13.47 for the three months ended June 30, 1998 to $14.99 for the same period in 1999. The average price received per barrel of NGLs increased $1.09, or 15%, from $7.24 during the three months ended June 30, 1998 to $8.33 for the same period in 1999. The average price received per mcf of gas increased 6% from $1.50 during the three months ended June 30, 1998 to $1.59 in 1999. Gain on disposition of assets of $285 was received during the three months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $205,269 for the three months ended June 30, 1999 as compared to $269,700 for the same period in 1998, a decrease of $64,431, or 24%. This decrease was due to declines in production costs, depletion, G&A and abandoned property costs. Production costs were $162,895 for the three months ended June 30, 1999 and $195,142 for the same period in 1998 resulting in a $32,247 decrease, or 17%. This decrease was due to declines in well maintenance costs and production taxes, offset by an increase in ad valorem taxes. During this period, G&A decreased, in aggregate, 7% from $7,885 for the three months ended June 30, 1998 to $7,347 for the same period in 1999. Depletion was $35,027 for the three months ended June 30, 1999 compared to $66,558 for the same period in 1998. This represented a decrease in depletion of $31,531, or 47%. 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 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 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, 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 1814% to $435,922 374,957 from $532,019 434,947 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and a decrease in production. For the six months ended June 30, 1999, 19,850 17,589 barrels of oil, 13,581 11,663 barrels of natural gas liquids ("NGLs") and 56,238 45,216 mcf of gas were sold, or 42,804 36,788 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 19,552 barrels of oil, 14,918 10,141 barrels of NGLs and 65,777 46,285 mcf of gas were sold, or 48,944 37,407 BOEs. The average price received per barrel of oil decreased 7% $1.65, or 11%, from $14.17 14.65 for the six months ended June 30, 1998 to $13.24 13.00 for the same period in 1999. The average price received per barrel of NGLs decreased 7% from $7.05 7.39 during the six months ended June 30, 1998 to $6.93 6.86 for the same period in 1999. The average price received per mcf of gas decreased 8% from $1.52 1.59 during the six months ended June 30, 1998 to $1.40 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. Gain on disposition of assets of $356 was received during the six months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $483,648 343,476 for the six months ended June 30, 1999 as compared to $528,511 402,718 for the same period in 1998, a decrease of $44,86359,242, or 815%. This decrease was due to declines in production costs, depletion and general and administrative expenses ("G&A"), depletion and abandoned property costs. Production costs were $344,743 223,897 for the six months ended June 30, 1999 and $383,272 272,903 for the same period in 1998 resulting in a $38,529 49,006 decrease, or 1018%. 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 decreased, in aggregate, 1819% from $15,961 13,920 for the six months ended June 30, 1998 to $13,078 11,249 for the same period in 1999. Depletion was $125,827 108,330 for the six months ended June 30, 1999 compared to $128,628 115,895 for the same period in 1998, a decline decrease of $2,8017,565, or 7%. This decrease was primarily due to a reduction in oil production of 3,213 1,963 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 June 30, 1999 due to the higher commodity prices 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" ("SFAS 121") during the fourth quarter of 1998. Abandoned property costs incurred during the six months ended June 30, 1998 totaled $650. These costs were in association with the plugging 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 decreased 7increased 3% to $244,884 209,933 from $262,816 203,910 for the three months ended June 30, 1999 and 1998, respectively. The decrease increase in revenues resulted from declines in production, offset by higher average prices receivedreceived and an increase in production. For the three months ended June 30, 1999, 9,402 7,934 barrels of oil, 7,313 6,797 barrels of NGLs and 27,119 24,720 mcf of gas were sold, or 21,235 18,851 BOEs. For the three months ended June 30, 1998, 11,711 9,573 barrels of oil, 7,790 4,934 barrels of NGLs and 32,461 21,016 mcf of gas were sold, or 24,911 18,010 BOEs. 8 131 The average price received per barrel of oil increased $1.52, or 11%, 4% from $13.47 13.87 for the three months ended June 30, 1998 to $14.99 14.48 for the same period in 1999. The average price received per barrel of NGLs increased $1.09, or 15%, 8% from $7.24 7.62 during the three months ended June 30, 1998 to $8.33 8.21 for the same period in 1999. The average price received per mcf of gas increased 6% decreased slightly from $1.50 1.60 during the three months ended June 30, 1998 to $1.59 in 1999. Gain on disposition of assets of $285 was received during the three months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $205,269 159,581 for the three months ended June 30, 1999 as compared to $269,700 200,434 for the same period in 1998, a decrease of $64,43140,853, or 2420%. This decrease was due to declines in production costs, depletion, G&A production costs and abandoned property costs. G&A. Production costs were $162,895 122,011 for the three months ended June 30, 1999 and $195,142 133,653 for the same period in 1998 resulting in a an $32,247 11,642 decrease, or 179%. This The decrease was due to declines in well maintenance costs costs, ad valorem taxes and production taxes, offset by an increase in ad valorem taxes. During this period, G&A decreased, in aggregate, 710% from $7,885 6,989 for the three months ended June 30, 1998 to $7,347 6,298 for the same period in 1999. Depletion was $35,027 31,272 for the three months ended June 30, 1999 compared to $66,558 59,792 for the same period in 1998. This represented , a decrease in depletion of $31,53128,520, or 4748%. 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 2,308 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. 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 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 187% to $435,922 621,001 from $532,019 669,914 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and received, offset by a decrease slight increase in production. For the six months ended June 30, 1999, 19,850 27,730 barrels of oil, 13,581 17,155 barrels of natural gas liquids ("NGLs") and 56,238 79,292 mcf of gas were sold, or 42,804 58,100 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 31,285 barrels of oil, 14,918 14,787 barrels of NGLs and 65,777 71,913 mcf of gas were sold, or 48,944 58,058 BOEs. The average price received per barrel of oil decreased 76% from $14.17 14.25 for the six months ended June 30, 1998 to $13.24 13.33 for the same period in 1999. The average price received per barrel of NGLs decreased increased 6% from $7.05 7.46 during the six months ended June 30, 1998 to $6.93 7.94 for the same period in 1999. The average price received per mcf of gas decreased 8% from $1.52 1.58 during the six months ended June 30, 1998 to $1.40 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. Gain A gain on disposition of assets of $356 157 was received recognized during the six months ended June 30, 1998 from post closing adjustments received from the disposal sale of two oil and gas equipment on fully depleted wellswells and an overriding royalty interest in one well during 1997. Costs and Expenses: Total costs and expenses decreased to $483,648 558,526 for the six months ended June 30, 1999 as compared to $528,511 707,110 for the same period in 1998, a decrease of $44,863148,584, or 821%. This decrease was due to resulted from declines in production costs, depletion and general and administrative expenses ("G&A"), depletion and abandoned property costs. Production costs were $344,743 416,974 for the six months ended June 30, 1999 and $383,272 529,323 for the same period in 1998 resulting in a $38,529 112,349 decrease, or 1021%. 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 decreased, in aggregate, 18% decreased slightly from $15,961 21,809 for the six months ended June 30, 1998 to $13,078 21,326 for the same period in 1999. Depletion was $125,827 120,226 for the six months ended June 30, 1999 compared to $128,628 155,978 for the same period in 1998, . This represented a decline decrease in depletion of $2,80135,752, or 23%. This decrease was primarily attributable to an increase in proved reserves for the period ended June 30, 1999 due to higher commodity prices, a reduction in oil production of 3,213 3,555 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 June 30, 1999 due to the higher commodity prices 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" ("SFAS 121") during the fourth quarter of 1998. Abandoned property costs incurred during the six months ended June 30, 1998 totaled $650. These costs were in association with the plugging 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 decreased 7increased 17% to $244,884 379,880 from $262,816 324,521 for the three months ended June 30, 1999 and 1998, respectively. The decrease increase in revenues resulted from declines in production, offset by higher average prices receivedreceived and an increase in production. For the three months ended June 30, 1999, 9,402 13,447 barrels of oil, 7,313 10,998 barrels of NGLs and 27,119 46,749 mcf of gas were sold, or 21,235 32,237 BOEs. For the three months ended June 30, 1998, 11,711 15,389 barrels of oil, 7,790 7,714 barrels of NGLs and 32,461 36,519 mcf of gas were sold, or 24,911 29,190 BOEs. The average price received per barrel of oil increased $1.521.45, or 11%, from $13.47 13.60 for the three months ended June 30, 1998 to $14.99 15.05 for the same period in three months ended June 30, 1999. The average price received per barrel of NGLs increased $1.091.75, or 1523%, from $7.24 7.59 during the three months ended June 30, 1998 to $8.33 9.34 for the same period in 1999. The average price received per mcf of gas increased 63% from $1.50 1.55 during the three months ended June 30, 1998 to $1.59 1.60 for the same period in 1999. Gain A gain on disposition of assets of $285 157 was received recognized during the three months ended June 30, 1998 from post closing adjustments received from the disposal sale of two oil and gas equipment on fully depleted wellswells and an overriding royalty interest in one well during 1997. Costs and Expenses: Total costs and expenses decreased to $205,269 261,584 for the three months ended June 30, 1999 as compared to $269,700 348,081 for the same period in 1998, a decrease of $64,43186,497, or 2425%. This decrease was due to declines in resulted from lower production costs, costs and depletion, G&A and abandoned property costs. offset by an increase in G&A. Production costs were $162,895 210,785 for the three months ended June 30, 1999 and $195,142 262,138 for the same period in 1998 resulting in a $32,247 51,353 decrease, or 1720%. This The decrease was due to declines a decline in well maintenance costs and production taxes, offset by an increase in ad valorem taxescosts. During this period, G&A decreasedincreased, in aggregate, 711% from $7,885 10,964 for the three months ended June 30, 1998 to $7,347 12,187 for the same period in 1999. Depletion was $35,027 38,612 for the three months ended June 30, 1999 compared to $66,558 74,979 for the same period in 1998. This represented , a decrease in depletion of $31,53136,367, or 4749%. 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 2,308 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. 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 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 1815% to $435,922 671,386 from $532,019 789,531 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and a decrease in production. For the six months ended June 30, 1999, 19,850 30,733 barrels of oil, 13,581 18,546 barrels of natural gas liquids ("NGLs") and 56,238 90,088 mcf of gas were sold, or 42,804 64,294 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 36,457 barrels of oil, 14,918 17,823 barrels of NGLs and 65,777 90,366 mcf of gas were sold, or 48,944 69,341 BOEs. The average price received per barrel of oil decreased 7% from $14.17 14.18 for the six months ended June 30, 1998 to $13.24 13.20 for the same period in 1999. The average price received per barrel of NGLs decreased slightly from $7.05 7.33 during the six months ended June 30, 1998 to $6.93 7.26 for the same period in 1999. The average price received per mcf of gas decreased 87% from $1.52 1.57 during the six months ended June 30, 1998 to $1.40 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. Gain A gain on disposition of assets of $356 765 was received during the six months ended June 30, 1998 from the disposal sale of oil and gas equipment on fully depleted wellsone saltwater disposal well plugged and abandoned in a prior year. Costs and Expenses: Total costs and expenses decreased to $483,648 643,652 for the six months ended June 30, 1999 as compared to $528,511 825,617 for the same period in ended June 30, 1998, a decrease of $44,863181,965, or 822%. This decrease was due to declines in production costs, depletion and general and administrative expenses ("G&A"), depletion and abandoned property costs. Production costs were $344,743 455,004 for the six months ended June 30, 1999 and $383,272 596,233 for the same period in 1998 resulting in a decrease of $38,529 decrease141,229, or 1024%. 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 decreased, in aggregate, 1815% from $15,961 23,676 for the six months ended June 30, 1998 to $13,078 20,141 for the same period in 1999. Depletion was $125,827 168,507 for the six months ended June 30, 1999 compared to $128,628 205,708 for the same period in 1998, . This represented a decline decrease in depletion of $2,80137,201, or 18%. This decrease was primarily due attributable to a reduction in oil production of 3,213 5,724 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 June 30, 1999 due to the higher commodity prices 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" ("SFAS 121") during the fourth quarter of 1998. Abandoned property costs incurred during the six months ended June 30, 1998 totaled $650. These costs were in association with the plugging 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 decreased 7% to $244,884 from $262,816 for the three months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from declines in production, offset by higher average prices received. For the three months ended June 30, 1999, 9,402 barrels of oil, 7,313 barrels of NGLs and 27,119 mcf of gas were sold, or 21,235 BOEs. For the three months ended June 30, 1998, 11,711 barrels of oil, 7,790 barrels of NGLs and 32,461 mcf of gas were sold, or 24,911 BOEs. The average price received per barrel of oil increased $1.52, or 11%, from $13.47 for the three months ended June 30, 1998 to $14.99 for the same period in 1999. The average price received per barrel of NGLs increased $1.09, or 15%, from $7.24 during the three months ended June 30, 1998 to $8.33 for the same period in 1999. The average price received per mcf of gas increased 6% from $1.50 during the three months ended June 30, 1998 to $1.59 in 1999. Gain on disposition of assets of $285 was received during the three months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $205,269 for the three months ended June 30, 1999 as compared to $269,700 for the same period in 1998, a decrease of $64,431, or 24%. This decrease was due to declines in production costs, depletion, G&A and abandoned property costs. Production costs were $162,895 for the three months ended June 30, 1999 and $195,142 for the same period in 1998 resulting in a $32,247 decrease, or 17%. This decrease was due to declines in well maintenance costs and production taxes, offset by an increase in ad valorem taxes. During this period, G&A decreased, in aggregate, 7% from $7,885 for the three months ended June 30, 1998 to $7,347 for the same period in 1999. Depletion was $35,027 for the three months ended June 30, 1999 compared to $66,558 for the same period in 1998. This represented a decrease in depletion of $31,531, or 47%. 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 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 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 1817% to $435,922 435,655 from $532,019 525,141 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and a decrease in production. For the six months ended June 30, 1999, 19,850 21,588 barrels of oil, 13,581 10,021 barrels of natural gas liquids ("NGLs") and 56,238 49,899 mcf of gas were sold, or 42,804 39,926 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 26,017 barrels of oil, 14,918 10,006 barrels of NGLs and 65,777 56,185 mcf of gas were sold, or 48,944 45,387 BOEs. The average price received per barrel of oil decreased 73% from $14.17 13.90 for the six months ended June 30, 1998 to $13.24 13.55 for the same period in ended June 30, 1999. The average price received per barrel of NGLs decreased 3% from $7.05 7.20 during the six months ended June 30, 1998 to $6.93 6.98 for the same period in 1999. The average price received per mcf of gas decreased 810% from $1.52 1.63 during the six months ended June 30, 1998 to $1.40 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. Gain A gain on disposition of assets of $356 1,096 was received during the six months ended June 30, 1998 1999 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $483,648 408,427 for the six months ended June 30, 1999 as compared to $528,511 427,306 for the same period in 1998, a decrease of $44,86318,879, or 84%. This decrease was due to declines in production costscosts and depletion, offset by an increase in general and administrative expenses ("G&A"), depletion and abandoned property costs. Production costs were $344,743 245,642 for the six months ended June 30, 1999 and $383,272 270,636 for the same period in 1998 resulting in a $38,529 24,994 decrease, or 109%. 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 decreasedincreased, in aggregate, 1862% from $15,961 17,857 for the six months ended June 30, 1998 to $13,078 28,880 for the same period in 1999. Depletion was $125,827 133,905 for the six months ended June 30, 1999 compared to $128,628 138,813 for the same period in 1998, a decline decrease of $2,8014,908, or 4%. This decrease was primarily due to a reduction in oil production of 3,213 4,429 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 June 30, 1999 due to the higher commodity prices 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" ("SFAS 121") during the fourth quarter of 1998. Abandoned property costs incurred during the six months ended June 30, 1998 totaled $650. These costs were in association with the plugging 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 decreased 7% slightly to $244,884 252,835 from $262,816 257,804 for the three months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from declines a decrease in production, offset by higher average prices received. For the three months ended June 30, 1999, 9,402 8 131 10,689 barrels of oil, 7,313 5,598 barrels of NGLs and 27,119 25,314 mcf of gas were sold, or 21,235 20,506 BOEs. For the three months ended June 30, 1998, 11,711 13,255 barrels of oil, 7,790 5,319 barrels of NGLs and 32,461 29,304 mcf of gas were sold, or 24,911 23,458 BOEs. The average price received per barrel of oil increased $1.522.49, or 1119%, from $13.47 for 12.98 during the three months ended June 30, 1998 to $14.99 for the same period 15.47 in 1999. The average price received per barrel of NGLs increased $1.091.02, or 1514%, from $7.24 7.17 during the three months ended June 30, 1998 to $8.33 8.19 for the same period in 1999. The average price received per mcf of gas increased 6% slightly from $1.50 during 1.63 for the three months ended June 30, 1998 to $1.59 1.65 for the same period in 1999. Gain A gain on disposition of assets of $285 1,096 was received during the three months ended June 30, 1998 1999 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $205,269 189,838 for the three months ended June 30, 1999 as compared to $269,700 222,966 for the same period in 1998, a decrease of $64,43133,128, or 2415%. This decrease decline was due to declines a decrease in depletion and production costs, depletion, G&A and abandoned property costs. offset by an increase in G&A. Production costs were $162,895 123,097 for the three months ended June 30, 1999 and $195,142 141,346 for the same period in 1998 resulting in a an $32,247 18,249 decrease, or 1713%. This decrease was due to declines in well maintenance costs and production taxes, offset by an increase in ad valorem taxesworkover costs. During this period, G&A decreased, in aggregate, 7% increased from $7,885 8,794 for the three months ended June 30, 1998 to $7,347 21,337 for the same period in 1999. Depletion was $35,027 45,404 for the three months ended June 30, 1999 compared to $66,558 72,826 for the same period in 1998. This represented , a decrease in depletion of $31,53127,422, or 4738%. 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 2,308 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. 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 However, 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 1817% to $435,922 179,090 from $532,019 215,630 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and a decrease decline in production. For the six months ended June 30, 1999, 19,850 8,806 barrels of oil, 13,581 4,288 barrels of natural gas liquids ("NGLs") and 56,238 20,236 mcf of gas were sold, or 42,804 16,467 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 10,417 barrels of oil, 14,918 4,340 barrels of NGLs and 65,777 22,148 mcf of gas were sold, or 48,944 18,448 BOEs. The average price received per barrel of oil decreased 75% from $14.17 13.87 for the six months ended June 30, 1998 to $13.24 13.16 for the same period in 1999. The average price received per barrel of NGLs decreased 6% from $7.05 7.79 during the six months ended June 30, 1998 to $6.93 7.36 for the same period in 1999. The average price received per mcf of gas decreased 87% from $1.52 1.68 during the six months ended June 30, 1998 to $1.40 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. Gain A gain on disposition of assets of $356 1,281 was received recognized during the six months ended June 30, 1998 from post closing adjustments received from the disposal sale of six oil and gas equipment on fully depleted wellswells and an overriding royalty interest in one well during 1997. Costs and Expenses: Total costs and expenses decreased to $483,648 179,771 for the six months ended June 30, 1999 as compared to $528,511 221,067 for the same period in 1998, a decrease of $44,86341,296, or 819%. This decrease was due to declines in depletion, production costs, costs and general and administrative expenses ("G&A"), depletion and abandoned property costs. Production costs were $344,743 137,257 for the six months ended June 30, 1999 and $383,272 139,621 for the same period in 1998 resulting in a $38,529 2,364 decrease, or 10%. 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 decreased, in aggregate, 18% from $15,961 for the six months ended June 30, 1998 to $13,078 for the same period in 1999. Depletion was $125,827 for the six months ended June 30, 1999 compared to $128,628 for the same period in 1998, a decline of $2,801. This 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 proved reserves during the period ended June 30, 1999 due to the higher commodity prices 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" ("SFAS 121") during the fourth quarter of 1998. Abandoned property costs incurred during the six months ended June 30, 1998 totaled $650. These costs were in association with the plugging 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 decreased 7% to $244,884 from $262,816 for the three months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from declines in production, offset by higher average prices received. For the three months ended June 30, 1999, 9,402 barrels of oil, 7,313 barrels of NGLs and 27,119 mcf of gas were sold, or 21,235 BOEs. For the three months ended June 30, 1998, 11,711 barrels of oil, 7,790 barrels of NGLs and 32,461 mcf of gas were sold, or 24,911 BOEs. The average price received per barrel of oil increased $1.52, or 11%, from $13.47 for the three months ended June 30, 1998 to $14.99 for the same period in 1999. The average price received per barrel of NGLs increased $1.09, or 15%, from $7.24 during the three months ended June 30, 1998 to $8.33 for the same period in 1999. The average price received per mcf of gas increased 6% from $1.50 during the three months ended June 30, 1998 to $1.59 in 1999. Gain on disposition of assets of $285 was received during the three months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $205,269 for the three months ended June 30, 1999 as compared to $269,700 for the same period in 1998, a decrease of $64,431, or 24%. This decrease was due to declines in production costs, depletion, G&A taxes and abandoned property costs. Production costs were $162,895 for the three months ended June 30, 1999 and $195,142 for the same period in 1998 resulting in a $32,247 decrease, or 17%. This decrease was due to declines in well maintenance costs and production ad valorem taxes, offset by an increase in ad valorem taxes. During this period, G&A decreased, in aggregate, 7% from $7,885 for the three months ended June 30, 1998 to $7,347 for the same period in 1999. Depletion was $35,027 for the three months ended June 30, 1999 compared to $66,558 for the same period in 1998. This represented a decrease in depletion of $31,531, or 47%. 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 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 well maintenance 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 Activitiesan effort to stimulate 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 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 1819% to $435,922 195,089 from $532,019 240,589 for the six months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from lower average prices received and a decrease in production. For the six months ended June 30, 1999, 19,850 9,267 barrels of oil, 13,581 5,512 barrels of natural gas liquids ("NGLs") and 56,238 21,392 mcf of gas were sold, or 42,804 18,344 barrel of oil equivalents ("BOEs"). For the six months ended June 30, 1998, 23,063 11,127 barrels of oil, 14,918 5,392 barrels of NGLs and 65,777 24,197 mcf of gas were sold, or 48,944 20,552 BOEs. The average price received per barrel of oil decreased 76% from $14.17 14.16 for the six months ended June 30, 1998 to $13.24 13.27 for the same period in ended June 30, 1999. The average price received per barrel of NGLs decreased 10% from $7.05 7.92 during the six months ended June 30, 1998 to $6.93 7.10 for the same period in 1999. The average price received per mcf of gas decreased 8% from $1.52 1.67 during the six months ended June 30, 1998 to $1.40 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. Gain on disposition of assets of $356 was received during the six months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $483,648 205,720 for the six months ended June 30, 1999 as compared to $528,511 227,750 for the same period in 1998, a decrease of $44,86322,030, or 810%. This decrease was due to declines in production costs, general and administrative expenses ("G&A"), depletion ) and abandoned property costsdepletion. Production costs were $344,743 132,744 for the six months ended June 30, 1999 and $383,272 148,593 for the same period in 1998 resulting in a $38,529 15,849 decrease, or 1011%. 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 decreased, in aggregate, 18% 37%, from $15,961 11,447 for the six months ended June 30, 1998 to $13,078 7,264 for the same period in 1999. Depletion was $125,827 65,712 for the six months ended June 30, 1999 compared to $128,628 67,710 for the same period in 1998, a decline decrease of $2,8011,998, or 3%. This decrease was primarily due to the result of a reduction in oil production of 3,213 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 June 30, 1999 due to the higher commodity prices 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" ("SFAS 121") during the fourth quarter of 1998. Abandoned property costs incurred during the six months ended June 30, 1998 totaled $650. These costs were in association with the plugging 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 decreased 7% slightly to $244,884 111,127 from $262,816 113,383 for the three months ended June 30, 1999 and 1998, respectively. The decrease in revenues resulted from declines decreases in productionproduction 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, 9,402 4,486 barrels of oil, 7,313 3,061 barrels of NGLs and 27,119 10,259 mcf of gas were sold, or 21,235 9,257 BOEs. For the three months ended June 30, 1998, 11,711 5,358 barrels of oil, 7,790 2,355 barrels of NGLs and 32,461 9,423 mcf of gas were sold, or 24,911 9,284 BOEs. 8 131 The average price received per barrel of oil increased $1.521.54, or 11%, from $13.47 13.45 for the three months ended June 30, 1998 to $14.99 for the same period in 1999. The average price received per barrel of NGLs increased $1.09, or 15%, decreased 10% from $7.24 9.60 during the three months ended June 30, 1998 to $8.33 8.62 for the same period in 1999. The average price received per mcf of gas increased 6decreased 14% from $1.50 1.98 during the three months ended June 30, 1998 to $1.59 1.71 for the same period in 1999. Gain on disposition of assets of $285 was received during the three months ended June 30, 1998 from the disposal of oil and gas equipment on fully depleted wells. Costs and Expenses: Total costs and expenses decreased to $205,269 96,793 for the three months ended June 30, 1999 as compared to $269,700 117,506 for the same period in 1998, a decrease of $64,43120,713, or 2418%. This decrease was due to declines in production costs, depletion, G&A production costs and abandoned property costs. G&A. Production costs were $162,895 71,921 for the three months ended June 30, 1999 and $195,142 75,490 for the same period in 1998 resulting in a $32,247 3,569 decrease, or 175%. This The decrease was due to declines in less well maintenance costs and declines in production taxes, offset by an increase in taxes and ad valorem taxes. During this period, G&A decreased, in aggregate, 7% 47%, from $7,885 7,201 for the three months ended June 30, 1998 to $7,347 3,806 for the same period in 1999. Depletion was $35,027 21,066 for the three months ended June 30, 1999 compared to $66,558 34,815 for the same period in 1998. This represented , a decrease in depletion of $31,53113,749, or 4739%. 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 2,308 872 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. 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.