Samson Investment Company and Subsidiaries - Page 4

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          rig-up and drilling operations.  A well-maintained rig also has a           
          higher resale value.  A rig crew of 16 to 18 people is required             
          to operate a deep well rig.                                                 
               The oil and gas industry historically has ups and downs,               
          with periods of favorable market conditions (boom periods) and              
          unfavorable market conditions (bust periods).  One boom period              
          began in 1973 when OPEC cut oil production, increased crude oil             
          prices approximately 70 percent, and established an embargo on              
          oil sales to the United States.  Spurred on by rising oil prices,           
          the U.S. domestic oil and natural gas exploration and production            
          industry achieved several years of unprecedented levels of                  
          drilling activity.  As a result of rising oil and natural gas               
          prices, Congress' authorization of the construction and filling             
          of the Strategic Petroleum Reserve, harsh winter conditions in              
          1976-77, deregulation of certain deep natural gas, and record               
          demand for oil and natural gas, oil and gas drilling activities             
          continued to expand through the late 1970's and into the 1980's.            
          CDC's Organization, Business Plan, and Financing                            
               J.D. Allen and Carl W. Swan organized CDC as an Oklahoma               
          corporation on October 27, 1980.  Messrs. Allen and Swan have a             
          history of involvement in oil and gas activities.  Edwin D.                 
          Arnold joined CDC as president at the time of its incorporation.            
          Mr. Arnold had worked over 25 years in the oil and gas drilling             
          business before joining CDC.                                                
               CDC engaged in the contract drilling of oil and gas wells.             
          Initially, CDC planned to design and construct a standardized               


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