Samson Investment Company and Subsidiaries - Page 9

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          to drill with deep rigs.  As a result of the decrease in the                
          price of deep natural gas, the amount of exploration and drilling           
          for deep natural gas declined sharply.  The number of deep                  
          drilling contracts entered into throughout the oil and gas                  
          industry dropped rapidly.  Deep well drilling activities led this           
          decline as the price difference between deep gas and other gas              
          narrowed.                                                                   
               Although there were relatively few deep wells drilled during           
          1986 and 1987, some operators were willing to enter into new                
          contracts to drill deep wells, but generally only on terms that             
          required drilling contractors to bid at rates below their actual            
          cost or on a turnkey basis, which placed the economic risk of the           
          drilling operation on the drilling contractors.                             
               On November 3, 1983, CDC began drilling a well that it had             
          taken over from another company.  Due to problems encountered in            
          drilling the well, it lost money on the job.  After it completed            
          drilling this well in July 1984, the rig was released.  After               
          July 1984, CDC drilled no wells before the Samson acquisition.              
               After July 1984, CDC employed no rig crews.  It was standard           
          practice in the contract drilling business to lay off rig crews             
          when a rig was not on a contract and to rehire them when the rig            
          returned to drilling operations.  Experienced rig hands would               
          have been readily available had CDC obtained a profitable                   
          drilling contract.  CDC hired its former toolpushers and rig                
          supervisors to provide security for its rigs in order to keep               
          quality drilling personnel readily available to operate the rigs            


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