James K. Wise and Claudia R. Wise - Page 4

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          6, 1980, to Weimar Bank of $297,800.  On October 6, 1980, the               
          partners of NROC executed guaranty agreements with respect to the           
          indebtedness to Weimar Bank.  On October 12, 1982, the                      
          indebtedness was increased by $2,200 to $300,000.                           
          Wise Oil Co.                                                                
               Petitioner was also a partner in Wise Oil Co. (Wise Co.),              
          with Klutts, Wood,2 and John Heger (Heger).3  Heger was president           
          and chairman of the board of Weimar Bank during 1980 and 1983.              
          During 1980 and 1981, Wise Co. borrowed money to finance its oil            
          and gas operations from Victoria Bank & Trust (Victoria Bank),              
          resulting in an aggregated indebtedness in the amount of                    
          $645,902.  Petitioner signed promissory notes to Victoria Bank in           
          different capacities, including individually and as a partner of            
          Wise Co.  The partners of Wise Co. guaranteed repayment of the              
          borrowed funds to Victoria Bank.                                            
          AMROC Energy Corp.                                                          
               On August 11, 1981, petitioner and his partners and                    
          coventurers organized AMROC Energy Corp. (AMROC), a Texas                   
          corporation.  In connection with the formation of AMROC, the                
          corporation participated in a private placement of its stock                


          2                                                                           
               Wood sold his interest to Kenneth W. Eubanks in July 1981.             
          Eubanks paid Wood $5,000 cash, executed a promissory note in the            
          amount of $95,000, and agreed to assume all of the partnership's            
          indebtedness allocable to such interest.                                    
          3                                                                           
               Petitioner was also involved in seven other entities, each             
          comprising four partners--petitioner, Klutts, Wood, and one other           
          individual.                                                                 



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