Samson Investment Company and Subsidiaries - Page 3

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          incorporated herein by this reference.  At the time the petition            
          was filed, Samson's principal place of business was located in              
          Tulsa, Oklahoma.                                                            
               On December 31, 1986, Samson acquired all the stock of CDC             
          (the change of ownership).  From 1981 through 1986, CDC had                 
          generated NOL's from its contract drilling business.  On its                
          consolidated Federal income tax returns for the taxable years               
          ended June 30, 1990 through 1993, Samson deducted the NOL                   
          carryforwards generated by CDC prior to the change of ownership             
          against other income of the Samson group.                                   
          Definitions and Industry Conditions                                         
               The operator of an oil or natural gas well has the right to            
          drill the well.  It is generally an owner of a working interest             
          in the well and thus has an economic interest in the well.  A               
          drilling contractor usually owns one or more drilling rigs, and             
          it contracts with an operator to drill a well.  It drills a hole            
          at a particular location to a depth specified under an agreement            
          with the operator and typically prepares a daily drilling report            
          of its progress in drilling the well.  Often a drilling                     
          contractor acquires working interests in oil and natural gas                
          wells in payment, or partial payment, for its drilling services             
          or in order to generate an additional source of cash-flow to                
          supplement its income from drilling operations.                             
               Operators are reluctant to hire drilling contractors whose             
          rigs have not been adequately maintained because such rigs might            
          require extensive, costly, and time-consuming repairs during                


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