<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
 
RESULTS OF OPERATIONS
 
    Management's discussion and analysis of the Company's financial position and
results  of  operations which  follows should  be read  in conjunction  with the
Consolidated Financial Statements and Selected  Financial Data included in  this
report.
 
BUSINESS CLIMATE
 
    The  Company's realized oil price  in 1995 increased by  $1.29 to $16.35 per
barrel, or 9 percent more than the 1994 price. The increase in 1995 followed a 6
percent decline in  1994 compared  to 1993.  The fundamentals  in worldwide  oil
markets  continue to reflect an excess of supply over demand. Concerns regarding
the reentry of Iraq into world crude markets depress prices.
 
    The Company's realized U.S. gas price in 1995 fell by $.14 to $1.73 per  mcf
or  7 percent lower  than the 1994  price. The U.S.  experienced mild weather in
early 1995 which resulted  in low prices. Extremely  cold winter weather  caused
record  high prices in late 1995 and early 1996. The Company produced 73 mmeb in
1995, 57 percent crude and 43 percent natural gas.
 
    In January 1995,  the Company  announced its new  corporate direction  which
included a plan to refocus its strategic direction, reduce debt by approximately
$400  million by the end of 1995, reposition assets to a base level where growth
is more reasonably  assured and  restore profitability through  the lowering  of
costs  at  all levels.  In 1995,  debt was  reduced by  $508 million  and costs,
excluding restructuring provisions, were $112  million or 10 percent lower  than
1994.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    ED&A   outlays  differ  from  capital  expenditures  in  that  they  exclude
capitalized interest but include cash exploration costs. ED&A outlays were  $300
million  in 1995, compared to $314 million in  1994 and $451 million in 1993. In
1995, 22 percent of the Company's  total ED&A investment was on exploration  and
78  percent on development. In 1996, total  ED&A outlays are expected to be $420
million of which about  80 percent is targeted  for development and  acquisition
and  20 percent for  exploration, primarily in  the U.S. FD&A  costs per eb were
$5.86 in 1995. The average  FD&A cost for the five  years 1991 through 1995  was
$5.04  per eb  and the  average production replacement  rate was  92 percent. In
1995, the Company replaced 67 percent of its production.
 
    The Company's  cash  flow  available  for investment  will  continue  to  be
affected  by prevailing oil  and gas prices,  costs and volumes.  The Company is
basing its 1996 investment plans on oil and gas spot prices averaging $18.00 per
barrel and $1.80 per mmbtu. These assumptions are subject to change, along  with
the associated investment levels.
 
    The  Company  emphasizes  projects  that generate  near-term  cash  flow and
de-emphasizes entry into new countries. The Gulf of Mexico is the cornerstone of
the Company's growth strategy.
 
    In July 1995, the  Company completed the  sale of all of  its assets in  the
Alba  field in the  U.K. North Sea  for cash consideration  of $270 million. The
sale of the  Company's assets  in Alba  was part of  a series  of related  asset
dispositions  which the Company entered into in 1995 for the purpose of reducing
debt. In November 1995, the Company completed the sale of its interest in  Block
48/15a  in  the  U.K. North  Sea  for  $120 million.  Assets  sold  included the
Company's interest in the Audrey field;  its interest in the Galleon field;  and
the  Ensign discovery. In addition, the  Company completed sales of certain U.S.
assets and all of  its assets in  Indonesia and Gabon. The  sale of U.S.  assets
occurred  primarily during the six months ended June 30, 1995 and generated cash
proceeds of $77 million; the sale of the Indonesian assets occurred in May 1995,
for cash proceeds of $67 million; and  the sale of the Gabonese assets  occurred
in  March 1995 for cash  proceeds of $2 million.  In 1995, the Company generated
net proceeds from  divestments of $517  million, as compared  to $78 million  in
1994 and $46 million in 1993.
 
                                       1
<PAGE>
    In  1994,  the  Company  exchanged  its  interest  in  the  undeveloped U.K.
Britannia field for a doubling  of its interests in  the U.K. Hutton, Lyell  and
Murchison producing fields and $40.4 million in cash. This transaction increased
near-term   production  volumes  and  considerably  reduced  future  development
expenditures. Effective January 9, 1995,  the Company took over operatorship  of
the Hutton, Lyell and Murchison fields.
 
    Capital  expenditures in 1993 included $33  million to acquire an additional
interest in the U.K. Ninian field.
 
    Effective June  1, 1995,  the Company  replaced its  $620 million  revolving
credit  facility with a $500 million  revolving credit facility (Revolver) which
matures on June  30, 1998. The  terms of the  $500 million Revolver  incorporate
restrictive  covenants, including limitations  on total debt,  minimum cash flow
interest coverage and certain dividend limitations. In August 1995, as a  result
of  the  sale of  the  Company's interest  in the  Alba  field, the  Company was
required by the holder to repay the 7.2% $100 million note.
 
    In connection with  the aforementioned,  the Company  recognized a  non-cash
extraordinary  loss of $15  million (net of  $8 million of  income tax). The $15
million extraordinary loss  is comprised of  $14 million from  the write-off  of
debt  issuance costs deferred  under the $620  million revolving credit facility
and a prepayment penalty of $1 million on the 7.2% $100 million note.
 
    In August 1995, a swap option, in  the notional amount of $250 million  sold
by  the Company in  1993 for $14  million, was exercised  by the counterparties,
thereby obligating the  Company, commencing  September 15,  1995 and  continuing
through  September  15,  1998, to  pay  an  annual rate  of  9.75  percent while
receiving LIBOR (5.875 percent at September  15, 1995, to be reset at  six-month
intervals).  The $14 million of proceeds  previously received is being amortized
and netted against the interest expense associated with the exercise of the swap
option.
 
    The Company  called for  redemption on  October 30,  1995 its  $138  million
10  3/8%  Debentures at  106.471  percent of  par  plus accrued  interest, which
resulted in an $8 million extraordinary loss  (net of $3 million of income  tax)
in the fourth quarter. The redemption was funded with proceeds from divestments.
 
    On  October 20, 1995, the  Company issued $100 million  8% Notes Due October
15, 2003 and $150 million 8.125% Notes Due October 15, 2005. The net proceeds of
$245 million were applied to the redemption of the Company's $250 million  9.75%
Notes  Due September 15, 1998 on November 30, 1995 at par plus accrued interest.
The Company's total debt  was $1,203 million at  December 31, 1995, compared  to
$1,711 million at December 31, 1994.
 
    Cash  was $20 million at the end of 1995 and $10 million at the end of 1994.
The Company's current borrowing capacity is more than adequate to meet its needs
under existing  economic  conditions. Moreover,  the  Revolver is  available  to
support  the outstanding  commercial paper program,  potential refinancing needs
and general liquidity.
 
    In December 1995,  the Company  adopted SFAS  No. 121,  "Accounting for  the
Impairment  of Long-Lived Assets  and for Long-Lived Assets  to Be Disposed Of."
Adoption did not impact results of operations.
 
    During 1994, Standard  & Poor's  downgraded the  Company's senior  unsecured
debt from BBB- to BB, subordinated debt from BB+ to B+ and commercial paper from
A-3  to  B.  Subsequently,  the  holders  of  the  Company's  senior  ESOP notes
(approximately $100  million principal  outstanding)  exercised their  right  to
require  the Company to  repay the notes  in full plus  a makewhole premium (see
Note 11 to the Consolidated Financial Statements). The Company recognized a  $12
million extraordinary loss associated with the notes, which were repaid in 1995.
 
    During 1995, holders of the Company's Series B Junior Cumulative Convertible
Preference  Stock (Series B Preference) converted the remaining shares of Series
B Preference into common stock on a share-for-share basis.
 
                                       2
<PAGE>
    In 1992, the amount  of the quarterly dividend  on common stock was  reduced
from $.30 per share to $.10 per share. In 1994, the Board of Directors suspended
the dividend.
 
    Any  shortfall in expected  cash flow from  operating activities may require
adjustment  of  business  plans.  Among  its  options,  the  Company  can  defer
discretionary  ED&A outlays,  draw against the  unused portion  of the Revolver,
seek additional bank borrowings or seek  access to capital markets. The  Company
is in compliance with all the covenants in its Revolver and expects to remain in
compliance   under  existing   conditions.  The  ability   to  incur  additional
indebtedness as well as the  long-term cash generation capability is  ultimately
tied to the value of the Company's proved reserve base.
 
FINANCIAL PERFORMANCE
 
    Net income in 1995 was $135 million which included net gains of $137 million
from  the sale  of assets,  a $23  million extraordinary  item related  to early
extinguishment of debt (see  Note 11 to  the Consolidated Financial  Statements)
and  a $16 million  net restructuring charge. Production  volumes decreased by 8
mmeb or 10 percent  as a direct  result of the sale  of producing assets.  Total
costs  and expenses decreased $112 million or 10 percent to $968 million in 1995
from $1,080 in 1994, excluding the restructuring provision.
 
    The net loss  for 1994  was $1,025 million,  which included  a $948  million
cumulative  effect  of an  accounting  change (see  Note  7 to  the Consolidated
Financial  Statements),  $12  million   extraordinary  item  related  to   early
retirement  of debt (see Note 11 to the Consolidated Financial Statements) and a
$59 million restructuring charge (net of $33 million of income tax).  Production
volumes  increased by  4 mmeb or  5 percent  primarily from the  U.K. North Sea.
Depreciation, depletion and amortization expense declined by $124 million or  31
percent because of the accounting change which decreased the Company's producing
property  balance by $1,355  million. (See Note 9  to the Consolidated Financial
Statements.)  General  and  administrative  expense  decreased  by  20   percent
primarily  because of fewer  employees and capitalized  interest decreased by 76
percent because of the completion  of certain development projects. Total  costs
and  expenses decreased $82 million or 7  percent to $1,080 million in 1994 from
$1,162 million in 1993, excluding the restructuring provision.
 
    The net loss for 1993 was $100 million which included tax-related charges of
$16 million including the  recognition of a higher  U.S. corporate tax rate,  $5
million of losses on asset disposals and a $7 million extraordinary loss related
to early debt retirement. Production volumes fell by 10 percent due primarily to
asset sales and normal declines. Total costs and expenses decreased $157 million
or  12 percent to $1,162 million in  1993 from $1,319 million in 1992, excluding
the provisions for restructuring and relinquishment of non-producing properties.
 
RESTRUCTURING CHARGES
 
    The Company incurred provisions for restructuring of $25 million in 1995 and
$92 million in 1994. The  1994 provision consisted of  a charge of $161  million
provided  in the first quarter, revised to $76 million because of the accounting
change, and  $16  million provided  in  the fourth  quarter.  The  restructuring
program involves some consolidation of the Company's business. The net result of
these  actions has been a reduction  of approximately 600 positions which, along
with other  actions  taken,  should  lead to  an  additional  $91  million  cost
reduction  for 1996. For analyses of the restructuring provisions, see Note 5 to
the Consolidated Financial Statements.
 
HEDGING ARRANGEMENTS
 
    The Company, from time to time, enters into hedging arrangements for foreign
currencies, interest rates and oil and gas prices. The Company has entered  into
swap  agreements for  approximately 12 percent  of its estimated  1996 crude oil
production with an average price of $18.48 per barrel. Approximately 41  percent
of  its estimated  1996 U.S.  gas production  is under  swap agreements  with an
average price of  $1.83 per  mmbtu. (See Note  2 to  the Consolidated  Financial
Statements.)
 
                                       3
<PAGE>
MARKETING
 
    During  the  fourth quarter  of 1995,  the  Company, Apache  Corporation and
Parker &  Parsley  Petroleum  Company formed  Producers  Energy  Marketing,  LLC
(ProEnergy). Upon commencement of full operations, which is expected to occur in
the  second quarter  of 1996, ProEnergy  will purchase substantially  all of its
members' U.S. gas production at index prices.
 
INCOME TAXES
 
    Oryx Energy adopted SFAS No.  109, "Accounting for Income Taxes,"  effective
January  1, 1992. The  overall effect for remeasurement  of foreign deferred tax
was a benefit  of $5 million  in 1993,  a charge of  $2 million in  1994 and  no
effect  in 1995.  As a  result of  applying the  provisions of  SFAS No.  109, a
non-cash charge or credit is included in business results based on the change in
foreign exchange  rates  and  the  corresponding  impact  on  the  deferred  tax
liability.  The  Company believes  these items  tend  to distort  current period
business results and should be disregarded in analyzing its current business.
 
POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS
 
    Oryx Energy adopted SFAS No. 106, "Accounting for Postretirement  Benefits,"
effective  January  1,  1993,  and began  accruing  the  cost  of postretirement
benefits other than pensions.  The after-tax impact of  $59 million, reduced  by
curtailments  in 1994 and  1995, is being  amortized over a  20-year period. The
increase in annual  expense for providing  these benefits was  $3 million  after
taxes. However, cash outflows were unaffected.
 
    Oryx   Energy  also  adopted  SFAS   No.  112,  "Employer's  Accounting  for
Postemployment Benefits," effective January 1, 1993, and began accruing the cost
of postemployment benefits. Since the Company has previously recognized  certain
costs as required by this standard, the effect of adoption was insignificant.
 
ENVIRONMENTAL
 
    The  Company's oil and gas operations are subject to stringent environmental
regulations. The Company is dedicated to the preservation of the environment and
has committed significant resources to comply with such regulations. Although it
has been  named as  a potentially  responsible party  at sites  related to  past
operations,  the Company  believes it is  in general  compliance with applicable
governmental regulations and that the potential  costs to it, in the  aggregate,
are not material to its financial condition. However, risks of substantial costs
and  liabilities  are  inherent  to  the  oil  and  gas  business.  Should other
developments occur, such as increasingly strict environmental laws,  regulations
and  enforcement policies  or claims  for damages  resulting from  the Company's
operations, they could result in additional costs and liabilities in the future.
(See Note 18 to the Consolidated Financial Statements.)
 
                                       4
<PAGE>


Appendix

Graph of Natural Gas Price 1991-1995

Graph of Natural Gas Production (split between U.S. and Foreign) 1991-1995

Graph of Crude and Condensate Production (split between U.S. and
Foreign) 1991-1995

Graph of Crude and Condensate Price 1991-1995


<PAGE>
                              ORYX ENERGY COMPANY
                            SELECTED FINANCIAL DATA
 
<TABLE>
<CAPTION>
                                                                              YEAR ENDED DECEMBER 31
                                                               -----------------------------------------------------
                                                                 1995       1994       1993       1992       1991
                                                               ---------  ---------  ---------  ---------  ---------
                                                                  (MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<S>                                                            <C>        <C>        <C>        <C>        <C>
FOR THE PERIOD
Revenues.....................................................  $   1,129  $   1,072  $   1,054  $   1,392  $   1,598
Income (loss) before extraordinary item and cumulative effect
 of accounting change (1)....................................  $     158  $     (65) $     (93) $      73  $      19
Net income (loss) (1)........................................  $     135  $  (1,025) $    (100) $      14  $      19
Income (loss) per share of common stock before extraordinary
 item and cumulative effect of accounting change (1).........  $    1.54  $    (.68) $   (1.01) $     .74  $     .08
Net income (loss) per share of common stock (1)..............  $    1.32  $  (10.53) $   (1.08) $     .06  $     .08
Cash dividends per share of common stock (2).................  $      --  $      --  $     .40  $     .80  $    1.20
Cash dividends per share of preferred stock (3)..............  $     .05  $    .175  $    .725  $    1.25  $    1.80
ED&A outlays (4).............................................  $     300  $     314  $     451  $     390  $     569
AT END OF PERIOD
Total assets (1).............................................  $   1,666  $   2,118  $   3,624  $   3,738  $   4,257
Long-term debt...............................................  $   1,051  $   1,546  $   1,741  $   1,489  $   2,341
Shareholders' equity (deficit)(5)............................  $    (209) $    (347) $     676  $     817  $     534
</TABLE>
 
--------------------------
(1) Net  income  for  1995  includes  $137  million  after-tax  gains  on  asset
    disposals,  $16  million  after-tax  charge for  costs  associated  with the
    Company's restructuring and a  $23 million extraordinary  loss net of  taxes
    from  debt  costs.  (See  Notes  5  and  11  to  the  Consolidated Financial
    Statements.) Effective January 1, 1994, the Company adopted a new policy for
    determining the ceiling  test for  its oil  and gas  properties. A  one-time
    non-cash  charge of $948 million after-tax  for the cumulative effect of the
    change was  recognized  in  the  earnings  for  1994  (see  Note  7  to  the
    Consolidated Financial Statements). Additionally, net loss for 1994 includes
    a  $59  million after-tax  charge for  costs  associated with  the Company's
    restructuring program, a $12  million extraordinary loss  net of taxes  from
    debt costs and a $2 million charge for the remeasurement of foreign deferred
    taxes  (see Notes  5 and 11  to the Consolidated  Financial Statements). Net
    loss for 1993 includes $5 million of after-tax losses on asset disposals,  a
    $7   million  extraordinary  loss  net  of  taxes  from  the  repurchase  of
    indebtedness and a $5 million benefit for remeasurement of foreign  deferred
    taxes (see Note 11 to the Consolidated Financial Statements). Net income for
    1992  includes  $19 million  of  after-tax gains  on  asset disposals,  a $9
    million  after-tax   charge  for   costs  associated   with  the   Company's
    restructuring program and a $59 million benefit for remeasurement of foreign
    deferred  taxes. Net income for 1991 includes $39 million of after-tax gains
    on asset disposals, a $35 million after-tax charge for costs associated with
    the Company's restructuring program and  a $25 million deferred tax  benefit
    associated with a U.K. tax rate reduction.
 
(2) In  June 1992,  the Company  announced the  reduction of  the quarterly cash
    dividend on its  $1.00 par value  common stock (Common  Stock) from $.30  to
    $.10 per share. In January 1994, the Company announced the suspension of its
    quarterly cash dividend of $.10 per share.
 
(3) On  September  11, 1990,  the Company  issued 7,259,394  shares of  Series B
    Junior Cumulative Convertible Preference Stock (Series B Preference  Stock).
    In  November  1994,  2 million  shares  of  Series B  Preference  Stock were
    converted into  Common Stock.  In 1995,  the remaining  5,259,394 shares  of
    Series B Preference Stock were converted into Common Stock.
 
(4) Exploration,  development  and  acquisition outlays  (ED&A  outlays) exclude
    capitalized interest of $10 million,  $11 million, $46 million, $43  million
    and $26 million for 1995, 1994, 1993, 1992 and 1991.
 
(5) Shareholders'  equity (deficit) at  December 31, 1995  and 1994 includes the
    $948 million charge for the cumulative effect of the change in the Company's
    policy for determining the ceiling test for its oil and gas properties  (see
    Note  7  to  the Consolidated  Financial  Statements).  Shareholders' equity
    (deficit) at December 31, 1995, 1994, 1993 and 1992 includes the effects  of
    the sale of 17,250,000 shares of Common Stock in August 1992.
 
                                       5
<PAGE>
                                ORYX ENERGY COMPANY
 
                         CONSOLIDATED STATEMENTS OF INCOME
 
<TABLE>
<CAPTION>
                                                                                        YEAR ENDED DECEMBER 31
                                                                                    -------------------------------
                                                                                      1995       1994       1993
                                                                                    ---------  ---------  ---------
                                                                                         (MILLIONS OF DOLLARS,
                                                                                       EXCEPT PER SHARE AMOUNTS)
<S>                                                                                 <C>        <C>        <C>
REVENUES
Oil and gas.......................................................................  $   1,014  $   1,082  $   1,080
Other-net (Note 3)................................................................        115        (10)       (26)
                                                                                    ---------  ---------  ---------
                                                                                        1,129      1,072      1,054
                                                                                    ---------  ---------  ---------
COSTS AND EXPENSES
Operating costs...................................................................        330        374        353
Production taxes (Note 4).........................................................        105        112        112
Exploration costs.................................................................         59        104        100
Depreciation, depletion and amortization..........................................        276        271        395
General and administrative expense................................................         64         68         85
Interest and debt expense.........................................................        144        162        163
Interest capitalized..............................................................        (10)       (11)       (46)
Provision for restructuring (Note 5)..............................................         25         92         --
                                                                                    ---------  ---------  ---------
                                                                                          993      1,172      1,162
                                                                                    ---------  ---------  ---------
Income (loss) before extraordinary item, cumulative effect of accounting change
 and benefit for income taxes.....................................................        136       (100)      (108)
Benefit for income taxes (Note 6).................................................        (22)       (37)       (10)
Remeasurement of foreign deferred tax (Notes 1 and 6).............................         --          2         (5)
                                                                                    ---------  ---------  ---------
Income (loss) before extraordinary item and cumulative effect of accounting
 change...........................................................................        158        (65)       (93)
Extraordinary item (Note 11)......................................................        (23)       (12)        (7)
Cumulative effect of accounting change (Note 7)...................................         --       (948)        --
                                                                                    ---------  ---------  ---------
NET INCOME (LOSS).................................................................        135     (1,025)      (100)
Less preferred stock dividends....................................................         --          1          5
                                                                                    ---------  ---------  ---------
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK....................................  $     135  $  (1,026) $    (105)
                                                                                    ---------  ---------  ---------
                                                                                    ---------  ---------  ---------
NET INCOME (LOSS) PER SHARE OF COMMON STOCK (NOTE 8):
  Before extraordinary item and cumulative effect of accounting change............  $    1.54  $    (.68) $   (1.01)
  Extraordinary item..............................................................       (.22)      (.12)      (.07)
  Cumulative effect of accounting change..........................................         --      (9.73)        --
                                                                                    ---------  ---------  ---------
  Net income (loss)...............................................................  $    1.32  $  (10.53) $   (1.08)
                                                                                    ---------  ---------  ---------
                                                                                    ---------  ---------  ---------
Cash dividends per share of common stock..........................................  $      --  $      --  $     .40
                                                                                    ---------  ---------  ---------
                                                                                    ---------  ---------  ---------
Weighted average number of common and common equivalent shares outstanding
 (millions of shares) (Note 8)....................................................      102.4       97.4       97.1
                                                                                    ---------  ---------  ---------
                                                                                    ---------  ---------  ---------
</TABLE>
 
                            (See Accompanying Notes)
 
                                       6
<PAGE>
                              ORYX ENERGY COMPANY
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                                                  DECEMBER 31
                                                                                              --------------------
                                                                                                1995       1994
                                                                                              ---------  ---------
                                                                                                  (MILLIONS OF
                                                                                                    DOLLARS)
<S>                                                                                           <C>        <C>
ASSETS
Current Assets
  Cash and cash equivalents.................................................................  $      20  $      10
  Accounts receivable and other current assets..............................................        161        185
                                                                                              ---------  ---------
Total Current Assets........................................................................        181        195
Properties, Plants and Equipment (Note 9)...................................................      1,426      1,851
Deferred Charges and Other Assets...........................................................         59         72
                                                                                              ---------  ---------
Total Assets................................................................................  $   1,666  $   2,118
                                                                                              ---------  ---------
                                                                                              ---------  ---------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
  Accounts payable..........................................................................  $     106  $     105
  Accrued liabilities (Note 10).............................................................        196        262
  Current portion of long-term debt (Note 11)...............................................        152        165
                                                                                              ---------  ---------
Total Current Liabilities...................................................................        454        532
Long-Term Debt (Note 11)....................................................................      1,051      1,546
Deferred Income Taxes (Note 6)..............................................................        207        232
Deferred Credits and Other Liabilities (Note 18)............................................        163        155
Commitments and Contingent Liabilities (Note 12)
Shareholders' Deficit (Note 13)
  Preferred stock, $1 par value; 22,740,606 shares authorized; 5,259,394 shares of Series B
   Junior Cumulative Convertible Preference Stock issued and outstanding in 1994............         --          5
  Common stock, $1 par value; 250,000,000 shares authorized; 126,703,550 shares issued in
   1995 and 1994, 104,454,562 and 98,946,066 shares outstanding in 1995 and 1994............        124        124
  Additional paid-in capital................................................................      1,821      2,098
  Accumulated deficit.......................................................................     (1,051)    (1,181)
                                                                                              ---------  ---------
                                                                                                    894      1,046
  Less common stock in treasury, at cost; 19,247,112 and 24,755,608 shares in 1995 and
   1994.....................................................................................     (1,004)    (1,294)
  Less loan to ESOP.........................................................................        (99)       (99)
                                                                                              ---------  ---------
Shareholders' Deficit.......................................................................       (209)      (347)
                                                                                              ---------  ---------
Total Liabilities and Shareholders' Deficit.................................................  $   1,666  $   2,118
                                                                                              ---------  ---------
                                                                                              ---------  ---------
</TABLE>
 
            The successful efforts method of accounting is followed.
                            (See Accompanying Notes)
 
                                       7

<PAGE>
                              ORYX ENERGY COMPANY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                                          YEAR ENDED DECEMBER 31
                                                                                      -------------------------------
                                                                                        1995       1994       1993
                                                                                      ---------  ---------  ---------
                                                                                           (MILLIONS OF DOLLARS)
<S>                                                                                   <C>        <C>        <C>
CASH AND CASH EQUIVALENTS FROM OPERATING ACTIVITIES
Net Income (Loss)...................................................................  $     135  $  (1,025) $    (100)
  Adjustments to reconcile net income (loss) to net cash
   from operating activities:
    Depreciation, depletion and amortization........................................        276        271        395
    Dry hole costs and leasehold impairment.........................................         21         57         45
    Deferred income taxes...........................................................         33         10         15
    (Gain) loss on sale of assets, net of taxes.....................................       (137)        --          5
    Provision for restructuring, net of taxes.......................................         16         59         --
    Extraordinary item..............................................................         23         12          7
    Cumulative effect of accounting change..........................................         --        948         --
    Proceeds from interest rate hedging activities..................................         --         --         28
    Other...........................................................................         10          5         30
                                                                                      ---------  ---------  ---------
                                                                                            377        337        425
  Changes in working capital:
    Accounts receivable and other current assets....................................          9         14         37
    Accounts payable................................................................         --        (14)       (32)
    Accrued liabilities.............................................................        (61)       (41)       (51)
                                                                                      ---------  ---------  ---------
NET CASH FLOW PROVIDED FROM OPERATING ACTIVITIES....................................        325        296        379
                                                                                      ---------  ---------  ---------
CASH AND CASH EQUIVALENTS FROM INVESTING ACTIVITIES
  Capital expenditures..............................................................       (273)      (281)      (453)
  Proceeds from divestments, net of current taxes...................................        517         78         46
  Other.............................................................................        (25)       (30)        20
                                                                                      ---------  ---------  ---------
NET CASH FLOW PROVIDED FROM (USED FOR) INVESTING ACTIVITIES.........................        219       (233)      (387)
                                                                                      ---------  ---------  ---------
CASH AND CASH EQUIVALENTS FROM FINANCING ACTIVITIES
  Proceeds from borrowings..........................................................        259        123        359
  Repayments of long-term debt......................................................       (793)      (185)      (307)
  Cash dividends paid on common and preferred stock.................................         --         (1)       (44)
                                                                                      ---------  ---------  ---------
NET CASH FLOW PROVIDED FROM (USED FOR) FINANCING ACTIVITIES.........................       (534)       (63)         8
                                                                                      ---------  ---------  ---------
CHANGES IN CASH AND CASH EQUIVALENTS................................................         10         --         --
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR......................................         10         10         10
                                                                                      ---------  ---------  ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR............................................  $      20  $      10  $      10
                                                                                      ---------  ---------  ---------
                                                                                      ---------  ---------  ---------
</TABLE>
 
                            (See Accompanying Notes)
 
                                       8
<PAGE>
                              ORYX ENERGY COMPANY
          CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT
<TABLE>
<CAPTION>
                                                                                                                      COMMON
                                                                                                                       STOCK
                                           COMMON STOCK            PREFERRED STOCK                                    HELD IN
                                     ------------------------  ------------------------  ADDITIONAL                  TREASURY
                                       NUMBER         PAR        NUMBER         PAR        PAID-IN     ACCUMULATED   ---------
                                      OF SHARES      VALUE      OF SHARES      VALUE       CAPITAL       DEFICIT      SHARES
                                     -----------     -----     -----------     -----     -----------  -------------  ---------
                                                            (MILLIONS OF DOLLARS, THOUSANDS OF SHARES)
<S>                                  <C>          <C>          <C>          <C>          <C>          <C>            <C>
AT DECEMBER 31, 1992...............     123,702    $     124        7,259    $       7    $   2,205     $     (11)     (26,784)
  Net loss.........................                                                                          (100)
  Issuance from treasury...........                                                              (1)                        15
  Cash dividends declared:
    Common - $.40 per share........                                                                           (39)
    Preferred - $.725 per share....                                                                            (5)
  Repayment of loan to ESOP........
                                     -----------       -----   -----------         ---   -----------  -------------  ---------
AT DECEMBER 31, 1993...............     123,702          124        7,259            7        2,204          (155)     (26,769)
  Net loss.........................                                                                        (1,025)
  Issuance from treasury...........                                                              (1)                        13
  Preferred stock conversion.......                                (2,000)          (2)        (105)                     2,000
  Cash dividends declared:
    Preferred - $.175 per share....                                                                            (1)
  Repayment of loan to ESOP........
                                     -----------       -----   -----------         ---   -----------  -------------  ---------
AT DECEMBER 31, 1994...............     123,702          124        5,259            5        2,098        (1,181)     (24,756)
  Net income.......................                                                                           135
  Issuance from treasury...........                                                                            (5)         250
  Preferred stock conversion.......                                (5,259)          (5)        (277)                     5,259
  Cash dividends declared:
    Preferred - $.05 per share.....                                                                            --
                                     -----------       -----   -----------         ---   -----------  -------------  ---------
AT DECEMBER 31, 1995...............     123,702    $     124           --    $      --    $   1,821     $  (1,051)     (19,247)
                                     -----------       -----   -----------         ---   -----------  -------------  ---------
                                     -----------       -----   -----------         ---   -----------  -------------  ---------
 
<CAPTION>
 
                                                     LOAN
                                                      TO
                                        COST         ESOP
                                     -----------  -----------
 
<S>                                  <C>          <C>
AT DECEMBER 31, 1992...............   $  (1,403)   $    (105)
  Net loss.........................
  Issuance from treasury...........           1
  Cash dividends declared:
    Common - $.40 per share........
    Preferred - $.725 per share....
  Repayment of loan to ESOP........                        3
                                     -----------  -----------
AT DECEMBER 31, 1993...............      (1,402)        (102)
  Net loss.........................
  Issuance from treasury...........           1
  Preferred stock conversion.......         107
  Cash dividends declared:
    Preferred - $.175 per share....
  Repayment of loan to ESOP........                        3
                                     -----------  -----------
AT DECEMBER 31, 1994...............      (1,294)         (99)
  Net income.......................
  Issuance from treasury...........           7
  Preferred stock conversion.......         283
  Cash dividends declared:
    Preferred - $.05 per share.....
                                     -----------  -----------
AT DECEMBER 31, 1995...............   $  (1,004)   $     (99)
                                     -----------  -----------
                                     -----------  -----------
</TABLE>
 
                            (See Accompanying Notes)
 
                                       9
<PAGE>
                              ORYX ENERGY COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
 
    Oryx  Energy  Company  together  with  its  consolidated  subsidiaries  (the
Company) was  incorporated in  Delaware in  1971 and  became a  publicly  traded
company  on November 1,  1988. The Company's business  operations consist of the
exploration for and development and production of oil and natural gas  reserves.
Since  December  1, 1985,  the Company  has functioned  as the  managing general
partner for and has  conducted its United States  operations through Sun  Energy
Partners,  L.P. The majority of the  Company's operations located outside of the
United States were acquired effective January 1, 1990 and are identified  herein
by the separate geographic areas of the United Kingdom and Other Foreign.
 
    The  consolidated financial statements  contain the accounts  of the Company
after elimination  of  intercompany  balances and  transactions.  The  Company's
interests  in Sun Energy  Partners, L.P. and  its related operating partnerships
(Partnership) are fully consolidated.
 
CASH AND CASH EQUIVALENTS
 
    The Company considers highly liquid investments with original maturities  of
less  than three months to  be cash equivalents. Cash  equivalents are stated at
cost which approximates market value.
 
PROPERTIES, PLANTS AND EQUIPMENT
 
    The successful efforts method of  accounting is followed for costs  incurred
in oil and gas operations.
 
    Capitalization  Policy --  Acquisition costs are  capitalized when incurred.
Costs of unproved properties  are transferred to  proved properties when  proved
reserves  are  added. Exploration  costs,  including geological  and geophysical
costs and costs of carrying unproved  properties, are charged against income  as
incurred.  Exploratory drilling costs are  capitalized initially; however, if it
is determined  that an  exploratory  well did  not  find proved  reserves,  such
capitalized  costs are  charged to  expense, as  dry hole  costs, at  that time.
Development costs are capitalized. Costs incurred to operate and maintain  wells
and equipment are expensed.
 
    Leasehold   Impairment  and  Depreciation,  Depletion  and  Amortization  --
Periodic valuation provisions  for impairment of  capitalized costs of  unproved
properties are expensed. The acquisition costs of proved properties are depleted
by  the unit-of-production method based on proved reserves by field. Capitalized
exploratory drilling costs which result in  the addition of proved reserves  and
development costs are amortized by the unit-of-production method based on proved
developed reserves by field.
 
    Ceiling  Test -- Effective  January 1, 1994, the  Company changed its policy
for performing ceiling test comparisons to  an individual field basis. Prior  to
1994,  the Company performed its ceiling  test comparisons on a worldwide basis.
Prior to December 1995, the  Company impaired the net  book value of its  proved
properties  to the extent  that they exceeded  the estimated undiscounted future
pre-tax cash flows calculated  by using current realized  prices and costs  held
constant.  In December 1995, the Company  adopted the provisions of Statement of
Financial Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived
Assets and  for  Long-Lived Assets  to  Be Disposed  Of."  Under SFAS  No.  121,
whenever events or changes in circumstances indicate that the carrying amount of
a long-lived asset may not be recoverable, the Company reviews for impairment by
comparing  estimated future  cash flows  expected to result  from the  use of an
asset and its eventual disposition to the carrying amount of the asset (Note 7).
 
                                       10
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    Dismantlement, Restoration  and  Abandonment  Costs --  Estimated  costs  of
future  dismantlement, restoration and abandonment are accrued as a component of
depreciation, depletion and  amortization expense; actual  costs are charged  to
the accrual.
 
    Retirements  --  Gains  and losses  on  the  disposals of  fixed  assets are
generally reflected  in  income. For  certain  property groups,  the  cost  less
salvage   value  of  property  sold  or  abandoned  is  charged  to  accumulated
depreciation, depletion and amortization except that gains and losses for  these
groups are taken into income for unusual retirements or retirements involving an
entire property group.
 
CAPITALIZED INTEREST
 
    The  Company  capitalizes  interest  costs  incurred  as  a  result  of  the
acquisition and installation of significant assets.
 
INCOME TAXES
 
    The Company adopted the provisions of  SFAS No. 109, "Accounting for  Income
Taxes"  in 1992. The remeasurement provisions of  SFAS No. 109 have affected the
reported earnings of the Company for 1994  and 1993. Earnings for 1994 and  1993
were  increased (decreased) by $(2) million  and $5 million from remeasuring the
Company's foreign  deferred  tax  liabilities.  Management  believes  that  such
non-cash  remeasurements distort current  period economic results  and should be
disregarded in analyzing the Company's current business. Future economic results
may also  be distorted  because payment  of the  deferred tax  liability is  not
expected  to occur in  the near-term and  it is likely  that exchange rates will
fluctuate prior to the eventual settlement of the liability.
 
PENSION AND OTHER POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS
 
    The Company  has  established  noncontributory  defined  benefit  plans  and
defined  contribution  plans  to provide  retirement  benefits for  most  of its
employees. Pension benefits  are charged  against earnings over  the periods  in
which they are earned by the employees (Note 14).
 
    In  addition  to providing  pension benefits,  the Company  provides certain
health care  and  life insurance  benefits  for retired  employees  and  certain
insurance  and other postemployment benefits for individuals whose employment is
terminated by the Company prior to their normal retirement. Substantially all of
the Company's employees may become eligible for postretirement benefits if  they
reach  normal retirement  age while working  for the  Company. Historically, the
cost  of  retiree  health   care  and  life   insurance  benefits  and   certain
postemployment benefits have been recognized as expenses as such claims or costs
were   paid.  In  December  1990,  SFAS  No.  106,  "Employers'  Accounting  for
Postretirement Benefits  Other  Than  Pensions,"  was  issued  and  it  requires
companies  to recognize the costs of postretirement benefits other than pensions
on an  accrual basis.  The  Company adopted  SFAS No.  106  in 1993,  and  began
accruing  the cost of  postretirement benefits other  than pensions. The related
transition obligation  of  $59  million  after-tax is  being  amortized  over  a
twenty-year  period. The increase in annual expense for providing these benefits
was $3 million after-tax. However, cash outflows are unaffected by the  adoption
of SFAS No. 106.
 
    In  November 1992, SFAS  No. 112, "Employers'  Accounting for Postemployment
Benefits"  was  issued.  It  requires  companies  to  recognize  the  costs   of
postemployment benefits on an accrual basis. The Company adopted SFAS No. 112 in
1993,  and began accruing the cost of postemployment benefits. Since the Company
had previously recognized certain costs as required by this standard, the effect
of adoption was insignificant.
 
                                       11
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SALES OF OIL AND GAS
 
    Sales of oil  and gas are  recorded on the  entitlement method.  Differences
between   actual  production  and  entitlements   result  in  amounts  due  when
underproduction occurs and amounts owed when overproduction occurs.
 
FOREIGN CURRENCY TRANSLATION
 
    The U.S. dollar is  the functional currency  for the Company's  consolidated
foreign  operations. For those operations, all  transaction gains or losses from
currency fluctuations are included in income currently.
 
FOREIGN EXCHANGE HEDGING CONTRACTS
 
    The Company,  from  time  to  time, enters  into  foreign  currency  hedging
arrangements to hedge the impact of changes in exchange rates on its receivables
and  payables denominated in British pounds. Gains and losses realized from such
arrangements offset  transaction gains  and  losses which  are included  in  the
measurement of the related foreign currency transactions (Note 2).
 
INTEREST RATE HEDGING AGREEMENTS
 
    The  Company  enters  into interest  rate  hedging agreements  to  alter the
floating rate  portion  of  its  underlying  debt  portfolio.  Advance  proceeds
received  under  such  agreements are  included  in deferred  credits  and other
liabilities and are amortized as offsets  to interest and debt expense over  the
relevant  periods. The differentials  paid or received during  the terms of such
agreements are accrued as interest rates change and are recorded as  adjustments
to interest and debt expense (Note 2).
 
OIL AND GAS PRICE HEDGING ACTIVITY
 
    The Company, from time to time, enters into arrangements to hedge the impact
of  price fluctuations on  anticipated crude oil and  natural gas sales. Advance
payments under such contracts  are deferred and charged  to oil and gas  revenue
during  the anticipated sales periods. The differentials paid or received during
the terms of such agreements  are accrued as oil and  gas prices change and  are
charged or credited to oil and gas sales (Note 2).
 
ENVIRONMENTAL COSTS
 
    The  Company  establishes  reserves for  environmental  liabilities  as such
liabilities are incurred (Note 18).
 
STATEMENT PRESENTATION
 
    The  preparation  of  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions that  affect the  reported  amounts of  assets and  liabilities  and
disclosure  of contingent  assets and liabilities  at the date  of the financial
statements and  the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.
 
    Certain  items in years prior  to 1995 have been  reclassified to conform to
the 1995 presentation.
 
(2) FINANCIAL INSTRUMENTS
 
DERIVATIVES
 
    As discussed in  Note 1, the  Company enters into  hedging arrangements  for
foreign exchange, interest rates and crude oil and natural gas prices with major
financial  institutions. The Company does not enter into derivative transactions
for trading purposes.
 
    The Company is active in the  foreign exchange market to hedge its  economic
exposures  to the British pound. In addition, the Company has exposures to other
currencies in countries in which it
 
                                       12
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(2) FINANCIAL INSTRUMENTS (CONTINUED)
does business. At December 31, 1995 and 1994, the Company had forward and option
contracts outstanding with various expiration  dates to purchase 52 million  and
53  million net British pounds at various prices. At December 31, 1995 and 1994,
the fair values of the  Company's outstanding foreign exchange contracts,  based
on  quoted market prices, were nil, which approximated their associated carrying
values. For  the year  ended December  31, 1995,  the Company  recognized a  net
transaction loss of $1 million and net gains of $2 million from foreign exchange
contracts.  For  the  years  ended  December  31,  1994  and  1993,  the Company
recognized net transaction gains of nil  and $2 million, and net gains  (losses)
from foreign exchange contracts of $1 million and $(6) million.
 
    The  Company also participates in various interest rate hedging arrangements
to manage the floating rate portion of its debt. At December 31, 1995 and  1994,
the  Company was  a party  to interest  rate hedging  agreements having notional
amounts of $600 million,  of which $350 million  represented interest rate  caps
(Caps)  with maturities in 1997 and 1998. The remaining $250 million represented
interest rate  swaps (Swaps)  expiring in  1998 that  had been  under option  at
December  31, 1994 and were subsequently exercised on August 15, 1995. The terms
of the Caps expose the Company to interest rate risk when LIBOR (5.5 percent  at
December  31, 1995) exceeds 5 percent per year. Under the terms of the Caps, the
Company received advance  proceeds of  $19 million from  the counterparties  and
must  pay the excess by  which LIBOR exceeds 5  percent on the notional amounts.
Under the  terms of  the Swaps,  the Company  received advance  proceeds of  $14
million  from the  counterparties and  must pay an  annual rate  of 9.75 percent
while receiving  LIBOR (5.875  percent at  September 15,  1995, to  be reset  at
six-month  intervals).  The terms  of  the Swaps  decrease  the exposure  of the
Company to increases  in LIBOR.  At December 31,  1995 and  1994, the  aggregate
carrying  values of the gains deferred  from the Company's interest rate futures
agreements were $25  million and $32  million, and their  estimated fair  market
values, based on market quotes, were $37 million and $41 million.
 
    At  December 31, 1995, the Company was a  party to crude oil and natural gas
hedging contracts  to hedge  about 8  percent of  its estimated  1996 crude  oil
production at an average price of $18.34 per barrel. Approximately 40 percent of
its estimated 1996 U.S. natural gas production was hedged at $1.81 per mmbtu. At
December  31, 1994, the Company was a party to crude oil and natural gas hedging
contracts to hedge about 10 percent  of its estimated 1995 crude oil  production
at  $17.80 per barrel and 40 percent of  its 1995 U.S. natural gas production at
$1.95 per mmbtu. These  arrangements serve to  reduce the volatility  associated
with prices of crude oil and natural gas. The aggregate carrying values of these
assets  at December 31, 1995 and 1994 were $5 million and nil, and the aggregate
fair values, subject to  daily fluctuation, based on  quotes from brokers,  were
approximately $(21) million and $13 million.
 
    All of the above mentioned derivative contracts expose the Company to credit
risks.  The Company  has established  controls to  manage this  risk and closely
monitors  the   creditworthiness  of   its  counterparties,   which  are   major
institutions.  The Company believes that losses from nonperformance are unlikely
to occur.
 
OTHER FINANCIAL INSTRUMENTS
 
    At December  31,  1995  and  1994, the  carrying  values  of  the  Company's
long-term  debt, including amounts due within  one year, were $1,203 million and
$1,711 million (Note  11). At  December 31, 1995  and 1994,  the aggregate  fair
values  of the  Company's long-term debt  were approximately  $1,233 million and
$1,671 million, estimated primarily based on  quoted market prices for the  same
or similar issues or on the current rates offered to the Company for debt of the
same remaining maturities.
 
                                       13
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(3) OTHER REVENUES -- NET
    The components of other revenues were as follows:
 
<TABLE>
<CAPTION>
                                                                      1995       1994       1993
                                                                    ---------  ---------  ---------
                                                                         (MILLIONS OF DOLLARS)
<S>                                                                 <C>        <C>        <C>
Interest income...................................................  $       8  $       2  $       1
Gain (loss) on sale of assets*....................................        124         --         (7)
Miscellaneous.....................................................        (17)       (12)       (20)
                                                                    ---------        ---        ---
                                                                    $     115  $     (10) $     (26)
                                                                    ---------        ---        ---
                                                                    ---------        ---        ---
</TABLE>
 
------------------------
* Revenue  generated  substantially  from gains  on  the sale  of  the Company's
  interest in the following properties. In July 1995, the Company completed  the
  sale  of all of its  assets in the Alba  field in the U.K.  North Sea for cash
  consideration of $270 million. In November 1995, the Company sold its interest
  in Block 48/15a in the U.K. North  Sea for $120 million. Assets sold  included
  the  Company's 33.7  percent interest  in the  Audrey field;  its estimated 10
  percent interest in the  Galleon field; and its  undetermined interest in  the
  Ensign  discovery. The sale of these North Sea  assets was part of a series of
  related asset dispositions which the Company has entered into in 1995 for  the
  purpose  of using the associated  net proceeds to reduce  debt. In addition to
  the sale of the North Sea assets,  the Company has completed sales of  certain
  U.S.  oil and gas producing assets and  all its assets in Indonesia and Gabon.
  The sale of U.S. assets occurred  primarily during the six-month period  which
  ended on June 30, 1995 and generated cash proceeds of $77 million; the sale of
  the  Indonesian assets occurred in May 1995, for cash proceeds of $67 million;
  and the sale of the Gabonese assets  occurred in March 1995 for cash  proceeds
  of  $2 million. Asset  dispositions, totaling $536  million of gross proceeds,
  represent 138 million equivalent  barrels of proved  reserves and 43  thousand
  average equivalent barrels of production per day.
 
(4) PRODUCTION TAXES
    Production taxes consisted of the following:
 
<TABLE>
<CAPTION>
                                                                     1995       1994       1993
                                                                   ---------  ---------  ---------
                                                                        (MILLIONS OF DOLLARS)
<S>                                                                <C>        <C>        <C>
International royalties..........................................  $      46  $      54  $      60
U.S. severance taxes.............................................         22         28         35
U.S. property taxes..............................................         11         15         17
U.K. petroleum revenue taxes.....................................         26         15         --
                                                                   ---------  ---------  ---------
                                                                   $     105  $     112  $     112
                                                                   ---------  ---------  ---------
                                                                   ---------  ---------  ---------
</TABLE>
 
(5) CHANGES IN BUSINESS
    In the fourth quarter of 1995, the Company recognized a net $25 million ($16
million  after-tax) charge  for restructuring. The  charge is comprised  of a $4
million adjustment to  the 1994 restructuring  provision (see below)  and a  $29
million restructuring provision for a plan to achieve further costs reductions.
 
                                       14
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(5) CHANGES IN BUSINESS (CONTINUED)
    An analysis of the 1995 provision for restructuring follows:
 
<TABLE>
<CAPTION>
                                                                                           ACTIVITY
                                                                              INITIAL       THROUGH    BALANCE AT
                                                                             PROVISION     12/31/95     12/31/95
                                                                           -------------  -----------  -----------
                                                                                    (MILLIONS OF DOLLARS)
<S>                                                                        <C>            <C>          <C>
Termination and associated costs*........................................    $      10     $       1    $       9
SFAS No. 88 and SFAS No. 106 (retirement and postretirement costs)**.....            5             5           --
Office lease obligation***...............................................           14            --           14
                                                                                   ---           ---          ---
  Total..................................................................    $      29     $       6    $      23
                                                                                   ---           ---          ---
                                                                                   ---           ---          ---
</TABLE>
 
------------------------
  * Termination  and associated cash costs  are primarily comprised of severance
    pay  and  associated  employee  benefit   costs  for  250  operational   and
    administrative  employees. Management  expects to complete  such payments by
    the end of 1997.
 
 ** Costs primarily represent  non-cash adjustments due  to special  termination
    benefits and the acceleration of a portion of the transition obligation as a
    result  of a reduction in the remaining  expected future years of service of
    active employees.
 
*** Represents contractual obligation existing prior to the commitment date that
    will continue with no economic benefit to the Company.
 
    In 1994,  the  Company recognized  a  $92 million  ($59  million  after-tax)
provision  for restructuring. The  1994 provision consisted of  a charge of $161
million provided in  the first quarter,  revised to $76  million because of  the
accounting change (Note 7) and $16 million provided in the fourth quarter.
 
    An analysis of the 1994 provision for restructuring follows:
 
<TABLE>
<CAPTION>
                                                                    ACTIVITY                  ACTIVITY
                                                        INITIAL      THROUGH    BALANCE AT     THROUGH    BALANCE AT
                                                       PROVISION    12/31/94     12/31/94     12/31/95*    12/31/95
                                                      -----------  -----------  -----------  -----------  -----------
                                                                           (MILLIONS OF DOLLARS)
<S>                                                   <C>          <C>          <C>          <C>          <C>
Termination and associated costs**..................   $      33    $      21    $      12    $      11    $       1
Proceeds from divested assets.......................         (40)         (40)          --           --           --
SFAS No. 88 and SFAS No. 106 (retirement and
 postretirement costs)***...........................          33           21           12           12           --
Book value of assets to be divested and lease
 obligation****.....................................         151          129           22           22           --
                                                           -----        -----          ---          ---          ---
  Total.............................................   $     177    $     131    $      46    $      45    $       1
                                                           -----        -----          ---          ---          ---
                                                           -----        -----          ---          ---          ---
</TABLE>
 
------------------------
   *Since  the costs of  the restructuring were  substantially complete in 1995,
    the reserve was adjusted downward by $4 million in the fourth quarter.
 
  **Termination and associated cash costs  are primarily comprised of  severance
    pay   and  associated  employee  benefit   costs  for  345  operational  and
    administrative employees. Management  expects to complete  such payments  in
    1996.
 
 ***Costs  primarily represent  non-cash adjustments due  to special termination
    benefits and the acceleration of a portion of the transition obligation as a
    result of a reduction in the  remaining expected future years of service  of
    active employees.
 
                                       15
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(5) CHANGES IN BUSINESS (CONTINUED)
****Book value of assets to be divested are a result of the Company's program to
    consolidate its U.S. onshore position. Under the terms of an operating lease
    which expired in September 1995, the Company was obligated to pay the lessor
    the  amount by which  the fair market value  of the asset  was less than $37
    million, but in no event would  the payment exceed $31 million. The  Company
    paid the obligation in full in 1995.
 
(6) INCOME TAXES
    Income  (loss) before  extraordinary item,  cumulative effect  of accounting
change and benefit for income taxes consisted of the following:
 
<TABLE>
<CAPTION>
                                                                            1995       1994       1993
                                                                          ---------  ---------  ---------
                                                                               (MILLIONS OF DOLLARS)
<S>                                                                       <C>        <C>        <C>
Before interest expense
  United States income (loss)...........................................  $      48  $      (2) $      30
  Foreign income (loss).................................................        222         53        (21)
Interest expense........................................................       (134)      (151)      (117)
                                                                          ---------  ---------  ---------
                                                                          $     136  $    (100) $    (108)
                                                                          ---------  ---------  ---------
                                                                          ---------  ---------  ---------
</TABLE>
 
    The benefit for income taxes  for each of the years  1995, 1994 and 1993  is
applicable to continuing operations.
 
    The  components  of the  benefit for  income taxes  on income  (loss) before
extraordinary item and accounting change were as follows:
 
<TABLE>
<CAPTION>
                                                                            1995       1994       1993
                                                                          ---------  ---------  ---------
                                                                               (MILLIONS OF DOLLARS)
<S>                                                                       <C>        <C>        <C>
Federal
  Current tax benefit...................................................  $     (18) $     (14) $     (18)
  Deferred tax provision (benefit)......................................         (9)       (16)         4*
State tax provision (benefit)...........................................          1         (6)         1
Foreign
  Current tax provision.................................................          3          9          8
  Deferred tax provision (benefit)......................................          1        (10)        (5)
                                                                          ---------  ---------  ---------
                                                                          $     (22) $     (37) $     (10)
                                                                          ---------  ---------  ---------
                                                                          ---------  ---------  ---------
</TABLE>
 
------------------------
*Includes a $17 million deferred tax  provision associated with a U.S. tax  rate
 increase.
 
                                       16
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(6) INCOME TAXES (CONTINUED)
    Deferred  taxes are provided  for the impact of  differences between the tax
basis  of  assets  and  liabilities  and  their  reported  amounts.  Significant
components  of  the  Company's deferred  income  tax assets  and  liabilities at
December 31, 1995 and 1994 are as follows:
 
<TABLE>
<CAPTION>
                                                                                    1995       1994
                                                                                  ---------  ---------
                                                                                      (MILLIONS OF
                                                                                        DOLLARS)
<S>                                                                               <C>        <C>
Deferred Tax Assets
  AMT credit carryforward.......................................................  $      64  $      50
  Dismantlement, restoration and abandonment....................................         38         36
  Loss on controlled foreign corporations.......................................         12         25
  Geological and geophysical expenditures.......................................         11         11
  Contingency accruals..........................................................         17         12
  Employee benefit accruals.....................................................         38         42
  Other.........................................................................          9          2
                                                                                  ---------  ---------
                                                                                        189        178
                                                                                  ---------  ---------
Deferred Tax Liabilities
  Items associated with capitalized costs and write-offs........................        352        379
  Miscellaneous accrued liabilities.............................................         44         31
                                                                                  ---------  ---------
                                                                                        396        410
                                                                                  ---------  ---------
Net Deferred Tax Liability......................................................  $     207  $     232
                                                                                  ---------  ---------
                                                                                  ---------  ---------
</TABLE>
 
    No valuation allowance was provided at December 31, 1995 or 1994 because the
Company anticipates that results of operations  in future years are more  likely
than  not to generate taxable income sufficient to allow utilization of existing
deferred tax assets.
 
    Following is the reconciliation of the tax provision (benefit) calculated at
the U.S. statutory tax rate to the Company's actual tax benefit on income (loss)
before extraordinary item and accounting change:
 
<TABLE>
<CAPTION>
                                                                                               1995       1994       1993
                                                                                             ---------  ---------  ---------
                                                                                                  (MILLIONS OF DOLLARS)
<S>                                                                                          <C>        <C>        <C>
U.S. statutory rate calculation............................................................  $      48  $     (35) $     (38)
Increase (reduction) in taxes resulting from:
  Benefit of additional tax basis on assets sold...........................................        (58)        --         --
  Deferred impact of tax rate changes......................................................         --         --         17
  Other....................................................................................        (12)        (2)        11
                                                                                                   ---        ---        ---
Benefit for income taxes before remeasurement of foreign deferred tax......................        (22)       (37)       (10)
Remeasurement of foreign deferred tax as required by SFAS No. 109..........................         --          2         (5)
                                                                                                   ---        ---        ---
Benefit for income taxes...................................................................  $     (22) $     (35) $     (15)
                                                                                                   ---        ---        ---
                                                                                                   ---        ---        ---
</TABLE>
 
(7) ACCOUNTING CHANGE
    In December 1995, the Company adopted SFAS No. 121, resulting in no material
impact.
 
    Effective January 1,  1994, the  Company changed its  accounting policy  for
calculating  the oil and gas asset ceiling test from a total company basis to an
individual field  basis. The  Company  believes the  field basis  is  preferable
because it is the way the Company manages its business. The basis underlying the
calculation  of the  cumulative effect  of this  change is  a comparison  of the
undiscounted pre-tax cash flows of each field's then existing proved reserves to
its net  book value  at each  quarter-end during  the life  of the  asset.  This
subjects  the ceiling test valuation to the lowest quarter-end price experienced
 
                                       17
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(7) ACCOUNTING CHANGE (CONTINUED)
over the asset's life. Prior to this change, the Company compared its  worldwide
undiscounted  standardized  measure  of  future net  cash  flows  from estimated
production of proved oil and gas reserves before income taxes to its net  proved
property,  plant  and  equipment.  As  a  result  of  this  change,  the Company
recognized a non-cash cumulative effect  charge of $948 million ($1,355  million
pre-tax)  to 1994  results. Excluding the  cumulative charge,  the Company's net
loss for 1994 was $77 million ($.68 per share before extraordinary item and $.80
per share  after  extraordinary item).  On  a  pro forma  basis,  the  Company's
reported net earnings for 1993 would have been a net loss of $699 million ($7.18
per  share before  extraordinary item  and $7.25  per share  after extraordinary
item) if this accounting change had been enacted prior to 1993.
 
(8) INCOME PER SHARE
    The 5,259,394 and 7,259,394 shares of Series B Preference Stock in 1994  and
1993  were common stock equivalents. During 1995, the remaining 5,259,394 shares
were converted to  Common Stock on  a share-for-share basis.  Conversion of  the
Series  B Preference Stock in 1994 or  1993 would have been anti-dilutive to the
Company's loss per share.  The Company has reserved  5,111,438 shares of  Common
Stock  for  issuance  to  the  owners of  its  7  1/2%  Convertible Subordinated
Debentures Due  2014  (Debentures).  The Debentures  are  convertible  into  the
Company's  Common Stock at  any time prior  to maturity at  $39.125 per share of
Common Stock. The Debentures are not common stock equivalents. If conversion  of
the  Debentures were assumed to have occurred,  the result would have been anti-
dilutive to 1995, 1994 and 1993 income (loss) per share.
 
(9) PROPERTIES, PLANTS AND EQUIPMENT
    At  December  31,  the  Company's  properties,  plants  and  equipment   and
accumulated depreciation, depletion and amortization were as follows:
 
<TABLE>
<CAPTION>
                                                                                     1995        1994
                                                                                   ---------  -----------
                                                                                   (MILLIONS OF DOLLARS)
<S>                                                                                <C>        <C>
Gross investment
  Proved properties..............................................................  $   4,945  $   6,112
  Unproved properties............................................................        126        143
  Other..........................................................................         62         65
                                                                                   ---------  -----------
                                                                                       5,133      6,320
                                                                                   ---------  -----------
Less accumulated depreciation, depletion and amortization
  Proved properties*.............................................................      3,650      4,413**
  Other..........................................................................         57         56
                                                                                   ---------  -----------
                                                                                       3,707      4,469
                                                                                   ---------  -----------
Net investment...................................................................  $   1,426  $   1,851
                                                                                   ---------  -----------
                                                                                   ---------  -----------
</TABLE>
 
------------------------
 *Includes  $116  million and  $106 million  for dismantlement,  restoration and
  abandonment at December 31, 1995 and 1994.
 
**Includes $1,355 million of impairment of proved oil and gas properties in 1994
  (Note 7).
 
                                       18
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(10) ACCRUED LIABILITIES
    At December  31, the  Company's accrued  liabilities were  comprised of  the
following:
 
<TABLE>
<CAPTION>
                                                                                      1995       1994
                                                                                    ---------  ---------
                                                                                        (MILLIONS OF
                                                                                          DOLLARS)
<S>                                                                                 <C>        <C>
Drilling and operating costs......................................................  $      78  $      73
Restructuring reserve (Note 5)....................................................         24         46
Interest payable..................................................................         25         64
Employee related costs and benefits...............................................         33         28
Royalties payable.................................................................         10          8
Taxes payable.....................................................................          1         22
Other.............................................................................         25         21
                                                                                    ---------  ---------
                                                                                    $     196  $     262
                                                                                    ---------  ---------
                                                                                    ---------  ---------
</TABLE>
 
(11) LONG-TERM DEBT
    At December 31, long-term debt consisted of the following:
 
<TABLE>
<CAPTION>
                                                                                                1995       1994
                                                                                              ---------  ---------
                                                                                                  (MILLIONS OF
                                                                                                    DOLLARS)
<S>                                                                                           <C>        <C>
8% Notes Due 2003...........................................................................  $     100  $      --
8.125% Notes Due 2005.......................................................................        150         --
9.75% Notes Due 1998........................................................................         --        250
10.375% Debentures payable $7 annually 1999 -- 2018.........................................         --        138
10% Notes Due 1999 and 2001 payable $100 in 1999 and $150 in 2001...........................        250        249
7.50% Convertible Subordinated Debentures payable $10 annually 1999 -- 2013 and $50 in
 2014.......................................................................................        200        200
Medium Term Notes, variable and fixed interest rates ranging from 6.05% to 9.50% at December
 31, 1995 due during 1996 -- 2002...........................................................         75        230
9.30% Notes Due 1996........................................................................        100        100
7.2% Note payable semiannually 1995 -- 2006.................................................         --        100
9.50% Notes Due 1999........................................................................        100        100
8.35% to 8.70% Senior ESOP Notes payable quarterly 1995 -- 2009.............................         --         60
Commercial Paper, variable interest rate; 6.75% at December 31, 1995*.......................         50         50
Variable interest rate (ranging from 6.69% to 8.875% at December 31, 1995) revolving credit
 facility...................................................................................        132        208
Capitalized lease obligations and other long-term debt due 1996 -- 2002.....................         46         26
                                                                                              ---------  ---------
                                                                                                  1,203      1,711
Less current portion........................................................................        152        165
                                                                                              ---------  ---------
                                                                                              $   1,051  $   1,546
                                                                                              ---------  ---------
                                                                                              ---------  ---------
</TABLE>
 
------------------------
* Commercial  paper maturity  at December  31, 1995  was 29  days. Such  debt is
  classified as long-term due to management's intention to continue to use it as
  a financing  vehicle  and  the  availability of  credit  under  the  Company's
  revolving credit facility.
 
    Long-term  debt maturities  are $152 million,  $3 million,  $3 million, $230
million and $15 million for  each of the years  1996 through 2000. The  maturing
amount  for 1998 excludes $207 million under the revolving credit facility which
management intends to replace no later than June 30, 1998.
 
    During the  fourth  quarter of  1995,  the Company  repurchased  its  10.375
percent  debentures at a  total cost of  $149 million resulting  in an after-tax
extraordinary loss of $8 million.
 
                                       19
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(11) LONG-TERM DEBT (CONTINUED)
    In the third  quarter of  1995, as  a result of  the sale  of the  Company's
interest in the U.K. Alba field, the Company was required by the holder to repay
the  7.2 percent $100 million note, resulting in an after-tax extraordinary loss
of $1 million.
 
    In the  second  quarter of  1995,  the  Company replaced  its  $620  million
revolving credit facility with a $500 million revolving credit facility which is
scheduled  to mature on  June 30, 1998, resulting  in an after-tax extraordinary
loss of $14 million.
 
    The Company pays a fee ranging from .375 percent to .5 percent of the unused
portion of its  $500 million revolving  credit facility. At  year end 1995,  the
Company  had the capacity  to borrow $270 million  under such facility; however,
the amount can change daily. The commitments are subject to withdrawal if  there
were to be an event of default.
 
    The  Company's long-term  debt contains  restrictive covenants,  including a
limitation on total  indebtedness; restriction  on the payment  of common  stock
dividends  and minimum  cash flow interest  coverage. At December  31, 1995, the
Company was in compliance with all of its debt covenants.
 
    During 1994, Standard  & Poor's  downgraded the  Company's senior  unsecured
debt from BBB- to BB, subordinated debt from BB+ to B+ and commercial paper to B
from  A-3.  Subsequently,  the  holders  of  the  Company's  senior  ESOP  notes
(approximately $100 million principal amount outstanding) exercised their  right
to  require the  Company to  repay the  notes in  full at  par plus  a makewhole
premium tied to prevailing rates of interest on U.S. Treasury obligations. As  a
result of the downgrade, the Company recognized a $12 million (net of $5 million
of  tax) extraordinary loss  associated with the  notes which were  paid in full
subsequent to year-end 1994.
 
    During 1994 and 1993, the Company repurchased $33 million and $78 million of
its 10.375 percent debentures  at a total  cost of $33  million and $88  million
resulting  in a loss of $7  million (net of $3 million  of tax) in 1993 which is
reflected as an extraordinary item in the Consolidated Statements of Income.
 
(12) COMMITMENTS AND CONTINGENT LIABILITIES
    The Company has  operating leases for  office space and  other property  and
equipment.  Total rental expense  for such leases  for the years  1995, 1994 and
1993 was $41 million, $37 million  and $32 million. Under contracts existing  as
of  December  31,  1995, future  minimum  annual rental  payments  applicable to
non-cancelable operating leases that  have initial or  remaining lease terms  in
excess  of one  year, less minimum  rentals to be  received under non-cancelable
subleases, were as follows (in millions of dollars):
 
<TABLE>
<S>                                                                    <C>
Year ending December 31:
  1996...............................................................  $      32
  1997...............................................................         13
  1998...............................................................         11
  1999...............................................................         10
  2000...............................................................          9
  Later years........................................................         62
                                                                       ---------
  Total minimum payments required....................................  $     137
                                                                       ---------
                                                                       ---------
</TABLE>
 
    Minimum rentals  to  be  received  under  non-cancelable  subleases  are  $3
million,  $3 million, $3 million,  $2 million and $2  million for the years 1996
through 2000 and $2 million for later years.
 
                                       20
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(12) COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)
    Several  legal  and  administrative  proceedings  are  pending  against  the
Company.   Although  the  ultimate  outcome   of  these  proceedings  cannot  be
ascertained at this time, and it is reasonably possible that some of them  could
be resolved unfavorably to the Company, management believes that any liabilities
which may arise would not be material.
 
(13) SHAREHOLDERS' DEFICIT
    Effective  in October 1988, 3,001,876 shares  of Common Stock of the Company
were issued  to an  operating partnership  of the  Partnership in  exchange  for
certain  assets, which shares have been deducted from the number of shares shown
in the Consolidated Balance Sheets as outstanding. Such shares are not  entitled
to  be voted at the  annual meeting of shareholders.  All other shares of Common
Stock are entitled to one vote per share.
 
    On August 1, 1989, the Company privately placed $110 million of notes  (ESOP
Notes)   pursuant  to  the  provisions  of   the  Oryx  Energy  Company  Capital
Accumulation Plan (CAP). The Company loaned  the proceeds to the CAP which  used
the  funds to purchase Common Stock of the  Company. Prior to 1995, the CAP made
scheduled loan payments  using Company  contributions to  the CAP.  In 1995  and
1996,  repayments were  and continue to  be deferred pending  a favorable ruling
from the Internal Revenue Service concerning  the leveraged ESOP portion of  the
CAP.
 
    The  Company has 272,740,606  authorized shares of  stock, consisting of (i)
250,000,000 shares of Common Stock having a  par value of $1.00 per share,  (ii)
7,740,606  shares of Cumulative Preference Stock (Preference Stock) having a par
value of  $1.00 and  a liquidation  preference  of $.001  per share,  and  (iii)
15,000,000  shares of  Preferred Stock (Preferred  Stock) having a  par value of
$1.00 per  share. As  of December  31, 1995,  there were  104,454,562 shares  of
Common  Stock outstanding. There are two  series of Preference Stock designated,
of which  there were  no shares  of Series  B Preference  Stock outstanding  and
120,000 shares of Series A Preference Stock designated and reserved for issuance
upon  exercise of the Stock Purchase Rights, of which none were outstanding. The
Preferred Stock was authorized by  vote of the shareholders  on May 5, 1992  and
there  are currently no shares of  Preferred Stock designated or outstanding. In
addition, on December 31, 1995 the  Company had reserved for issuance  5,111,438
shares  of  Common Stock  on conversion  of the  outstanding 7  1/2% Convertible
Debentures and 2,722,374 shares of Common Stock upon the exercise of outstanding
management options.
 
COMMON STOCK
 
    Each share of  Common Stock entitles  its record  owner to one  vote on  all
matters  submitted  to the  stockholders for  action.  The stockholders  are not
entitled to cumulative voting  rights in the election  of directors. Subject  to
the  rights of holders of any class  of Preference Stock or Preferred Stock, the
holders of  Common Stock  are entitled  to share  ratably in  dividends in  such
amount  as may be declared by the Company's Board of Directors (Board) from time
to time out of funds legally available therefor. The payment of dividends on the
Common Stock is restricted under the  Credit Agreement and is prohibited in  the
event of a default.
 
PREFERENCE STOCK
 
    The  Board is authorized by the Certificate to issue Preference Stock in one
or more series and to fix for each such series such qualifications,  privileges,
limitations,  options, conversion rights and other  special rights as are stated
and adopted  by the  Board  and as  are permitted  by  the Certificate  and  the
Delaware General Corporation Law, including the designation and number of shares
issuable,  the dividend rate,  voting rights, conversion  rights, redemption and
sinking fund provisions and liquidation values of each such series.
 
                                       21
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(13) SHAREHOLDERS' DEFICIT (CONTINUED)
    Holders of Preference Stock are entitled to receive, when and as declared by
the Board out of  assets legally available for  that purpose, annual  cumulative
dividends payable in quarterly installments. Unless full cumulative dividends on
the  Preference Stock have been paid, no dividend may be declared or paid on, or
other distributions made  upon, Preferred  Stock or  Common Stock,  nor may  any
Preferred Stock or Common Stock be redeemed or purchased by the Company.
 
    Subject to certain conditions, the Company may redeem all or any part of the
Preference Stock then outstanding.
 
    During  1995,  the  holders  of  Series  B  Preference  Stock  converted the
remaining  shares  of  Series  B  Preference  Stock  into  Common  Stock  on   a
share-for-share basis.
 
PREFERRED STOCK
 
    The  Board is authorized by the Certificate  to issue Preferred Stock in one
or more series and to fix for each such series such qualifications,  privileges,
limitations,  options, conversion rights and other  special rights as are stated
and adopted  by the  Board  and as  are permitted  by  the Certificate  and  the
Delaware General Corporation Law, including the designation and number of shares
issuable,  the dividend rate,  voting rights, conversion  rights, redemption and
sinking fund provisions and liquidation values of each such series.
 
    Subject to the rights of holders of  any class of Preference Stock, if  any,
the  holders of Preferred Stock  are entitled to receive  dividends, when and as
declared by the Board  out of funds  legally available for  that purpose. As  to
dividends  and rights upon liquidation, dissolution or winding up, the Preferred
Stock will rank  junior and subordinate  to any series  of Preference Stock  and
prior to the Common Stock.
 
RIGHTS
 
    On  September 11,  1990, the Board  declared a dividend  distribution of one
Stock Purchase  Right  on  each  outstanding  share  of  Common  Stock,  payable
September  28, 1990, to holders of record of  the Common Stock on that date. The
Rights are also issuable upon the issuance of additional shares of Common  Stock
prior  to the time the Rights are  redeemed or expire. Initially, the Rights are
represented by the certificates  for the Common Stock  and will trade only  with
the  Common  Stock. The  Rights will  expire September  11, 2000  unless earlier
redeemed by the Company.
 
(14) EMPLOYEE AND RETIREE BENEFIT PLANS
 
DEFINED BENEFIT PENSION PLANS
 
    The  Company  has  noncontributory  defined  benefit  plans  which   provide
retirement benefits for most of its employees. Plan benefits are generally based
on  years of service, age  at retirement and the  employee's compensation. It is
the Company's  policy  to  fund  defined benefit  pension  contributions,  at  a
minimum, in accordance with the requirements of the Internal Revenue Code.
 
    The cost of the Company's primary defined benefit pension plans consisted of
the following:
 
<TABLE>
<CAPTION>
                                                                                     1995       1994       1993
                                                                                   ---------  ---------  ---------
                                                                                        (MILLIONS OF DOLLARS)
<S>                                                                                <C>        <C>        <C>
Service cost (cost of benefits earned during the year)...........................  $      (6) $      (5) $      (6)
Interest cost on projected benefit obligation....................................        (36)       (36)       (38)
Actual return on plan assets.....................................................         85         (4)        59
Net amortization and deferral*...................................................        (47)        47        (17)
                                                                                         ---        ---        ---
  Net periodic pension benefit (cost)**..........................................  $      (4) $       2  $      (2)
                                                                                         ---        ---        ---
                                                                                         ---        ---        ---
</TABLE>
 
                                       22
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(14) EMPLOYEE AND RETIREE BENEFIT PLANS (CONTINUED)
------------------------
 *Estimated returns on assets are used in determining net periodic pension cost.
  Differences   between  estimated  and  actual  returns  are  included  in  net
  amortization and deferral.
 
**Does not include $1 million and $1 million curtailment loss and $4 million and
  $13 million  cost of  special termination  benefits due  to the  reduction  in
  workforce in 1995 and 1994.
 
    The  following table sets forth the  funded status and amounts recognized in
the Company's Consolidated Balance Sheets at December 31:
 
<TABLE>
<CAPTION>
                                                              1995                            1994
                                                 ------------------------------  ------------------------------
                                                   PLANS IN                        PLANS IN
                                                 WHICH ASSETS   PLANS IN WHICH   WHICH ASSETS   PLANS IN WHICH
                                                    EXCEED        ACCUMULATED       EXCEED        ACCUMULATED
                                                  ACCUMULATED   BENEFITS EXCEED   ACCUMULATED   BENEFITS EXCEED
                                                   BENEFITS         ASSETS         BENEFITS         ASSETS
                                                 -------------  ---------------  -------------  ---------------
                                                                     (MILLIONS OF DOLLARS)
<S>                                              <C>            <C>              <C>            <C>
Actuarial present value of benefit obligation:
  Vested.......................................    $    (406)      $     (86)      $    (360)      $     (81)
  Nonvested....................................          (13)             --             (15)             (2)
                                                      ------             ---          ------             ---
Accumulated benefit obligation.................         (419)            (86)           (375)            (83)
Effect of projected future salary increases....          (23)             (3)            (22)             (3)
                                                      ------             ---          ------             ---
Projected benefit obligation...................         (442)            (89)           (397)            (86)
Less plan assets at fair value*................          443              --             390              --
                                                      ------             ---          ------             ---
Projected benefit obligation less than (in
 excess of) plan assets........................            1             (89)             (7)            (86)
Unrecognized net transition obligation
 (asset).......................................          (26)             12             (32)             14
Unrecognized prior service cost (benefit)......            2              (2)             --              (2)
Unrecognized net loss..........................           50              30              61              22
Additional minimum liability...................           --             (37)             --             (31)
                                                      ------             ---          ------             ---
Accrued pension asset (liability)**............    $      27       $     (86)      $      22       $     (83)
                                                      ------             ---          ------             ---
                                                      ------             ---          ------             ---
</TABLE>
 
------------------------
 *Plan assets consist principally of  commingled trust funds, marketable  equity
  securities,  corporate  and government  debt  securities and  real  estate. At
  December 31, 1995, less than 1 percent  of plan assets was invested in  Common
  Stock of the Company.
 
**Accrued  pension liability is included  in "Accrued Liabilities" and "Deferred
  Credits and Other Liabilities" in the Consolidated Balance Sheets.
 
    As of December  31, 1995 and  1994, the projected  benefit obligations  were
determined  using weighted average assumed discount  rates of 6.75 and 8 percent
and a rate of compensation increase of 4 percent. The weighted average  expected
long-term rate of return on plan assets was 9.5 percent in 1995 and 1994. All of
these rates are subject to change in the future as economic conditions change.
 
                                       23
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(14) EMPLOYEE AND RETIREE BENEFIT PLANS (CONTINUED)
DEFINED CONTRIBUTION PENSION PLANS
 
    Defined  contribution  plans,  which  are  designed  to  provide  retirement
benefits, are available to substantially all employees. Contributions, which are
principally based on employees' compensation, are expensed as incurred.
 
    At December 31, 1995, the principal defined contribution plan is CAP,  which
is a combined stock bonus and leveraged ESOP available to substantially all U.S.
employees.  The first  5 percent  of employee  contributions are  matched by the
Company at 110 percent up  to the first $50,000 of  employee base salary and  at
100 percent thereafter. In 1994, the Company's contributions to CAP were used to
repay the debt issued to fund the purchase of Common Stock held by the leveraged
ESOP.  In  1995, stock  allocations to  employees from  the leveraged  ESOP were
suspended pending a ruling requested from the IRS; therefore, there was no  debt
service in the form of Company matching contributions made to the ESOP. Instead,
Company  matching contributions were made  using Treasury Stock. Benefit expense
recognized for defined contribution  plans amounted to  $3 million, $11  million
and $10 million for 1995, 1994 and 1993.
 
    Additional  information with respect to the leveraged ESOP portion of CAP is
as follows:
 
<TABLE>
<CAPTION>
                                                                                     1995       1994       1993
                                                                                   ---------  ---------  ---------
                                                                                        (MILLIONS OF DOLLARS)
<S>                                                                                <C>        <C>        <C>
Interest cost on ESOP debt.......................................................  $      --  $       8  $       9
Company cash contributions to the ESOP...........................................  $      --  $      13  $      10
ESOP dividends used for debt service.............................................  $      --  $      --  $       1
</TABLE>
 
HEALTH CARE AND LIFE INSURANCE BENEFITS
 
    The Company sponsors unfunded defined benefit health care and life insurance
benefit plans to substantially  all employees and  retirees. Benefits under  the
health  care  plan are  provided on  a  self-insured basis  or through  a Health
Maintenance Organization.  The health  care  plan provides  comprehensive  major
medical coverage which integrates with Medicare and contains provisions for cost
sharing  with participants  through contributions,  coinsurance, deductibles and
caps on employer  costs. Benefits  under the  life insurance  plan are  provided
through  an insurance contract. The life  insurance plan contains provisions for
retiree cost  sharing  through  contributions and  provides  benefits  based  on
preretirement  compensation with a scheduled reduction in benefits commencing at
age 66  and  termination  of  all  benefits at  age  70  for  substantially  all
participants.
 
    The  cost of health care  and life insurance benefit  plans was $15 million,
$19 million and $20 million, of which  $11 million, $14 million and $12  million
was  for retirees in  1995, 1994 and 1993.  The Company adopted  SFAS No. 106 on
January 1,  1993, and  in accordance  with  its provisions  has changed  to  the
accrual  accounting  method in  computing  postretirement health  care  and life
insurance benefit plan expense. The  Company formerly accounted for these  costs
using the pay-as-you-go (cash) method.
 
                                       24
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
(14) EMPLOYEE AND RETIREE BENEFIT PLANS (CONTINUED)
 
    The  cost, net of  retiree contributions, of  the postretirement health care
and life insurance benefit plans calculated in accordance with the provisions of
SFAS No. 106 is as follows:
 
<TABLE>
<CAPTION>
                                                                                       1995       1994       1993
                                                                                     ---------  ---------  ---------
                                                                                          (MILLIONS OF DOLLARS)
<S>                                                                                  <C>        <C>        <C>
Service cost (cost of benefits earned during the year).............................  $       1  $       1  $       1
Interest cost on the accumulated postretirement benefit obligation.................          7          8          7
Amortization of transition obligation..............................................          3          4          4
Net amortization of other components...............................................         --          1         --
                                                                                           ---        ---        ---
  Net periodic postretirement benefit cost*........................................  $      11  $      14  $      12
                                                                                           ---        ---        ---
                                                                                           ---        ---        ---
</TABLE>
 
------------------------
*Does not  include $10  million and  $13  million curtailment  loss due  to  the
 reduction in workforce in 1995 and 1994.
 
    The following table sets forth the funded status and amounts reported in the
Company's Consolidated Balance Sheets at December 31:
 
<TABLE>
<CAPTION>
                                                                                      1995       1994
                                                                                    ---------  ---------
                                                                                        (MILLIONS OF
                                                                                          DOLLARS)
<S>                                                                                 <C>        <C>
Accumulated postretirement benefit obligation:
  Retirees........................................................................  $     (87) $     (81)
  Active employees eligible to retire.............................................         (3)        (4)
  Active employees not yet eligible to retire.....................................         (9)       (10)
                                                                                    ---------  ---------
Total accumulated postretirement benefit obligation...............................        (99)       (95)
Less plan assets at fair value....................................................         --         --
                                                                                    ---------  ---------
Accumulated obligation in excess of plan assets...................................        (99)       (95)
Unrecognized net loss.............................................................          9          5
Unrecognized prior service benefit................................................         --         (5)
Unrecognized transition obligation................................................         51         70
                                                                                    ---------  ---------
  Accrued postretirement benefit liability*.......................................  $     (39) $     (25)
                                                                                    ---------  ---------
                                                                                    ---------  ---------
</TABLE>
 
------------------------
* Accrued  postretirement benefit liability is included in "Accrued Liabilities"
  and "Deferred  Credits  and Other  Liabilities"  in the  Consolidated  Balance
  Sheets.
 
    The assumed health care cost trend rate used to measure the expected cost of
benefits  covered by the plan is approximately 7 percent. Health care cost trend
rates for future years are assumed  to gradually trend downward over a  six-year
period  to meet and thereafter parallel  the projected rate of general inflation
of 4.5 percent. A 1-percent increase in the assumed health care cost trend rates
for future years would result in no  significant increase in annual cost but  an
increase  of $6 million in the accumulated postretirement benefit obligation for
the Company's health care plan.
 
    The weighted average assumed discount rates used to measure the  accumulated
postretirement  benefit obligation are 7 and 8 percent in 1995 and 1994. For the
life insurance plan, an  assumed rate of increase  of compensation of 4  percent
was used to measure the accumulated postretirement benefit obligation.
 
(15) MANAGEMENT INCENTIVE PLANS
    The  principal management incentive  plans are the  1992 Long-Term Incentive
Plan (1992  LTIP),  the  Long-Term  Incentive  Plan  (LTIP)  and  the  Executive
Long-Term Incentive Plan (ELTIP). The
 
                                       25
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(15) MANAGEMENT INCENTIVE PLANS (CONTINUED)
ELTIP  provides that  no awards may  be granted  after November 1,  1988 and was
replaced by the LTIP which provides that no awards may be granted after December
31, 1991. All previous awards  granted under both the  ELTIP and LTIP remain  in
effect  in accordance with their  terms. As of December  31, 1995, there were no
outstanding awards granted under the ELTIP. The 1992 LTIP replaced the LTIP  and
became  effective January 1, 1992. A maximum of 3,000,000 shares of Common Stock
were authorized for issuance under the 1992 LTIP.
 
    Under the  provisions  of these  plans,  stock options,  stock  appreciation
rights  and limited rights  were granted in various  tandem combinations so that
the exercise of any one of them will reduce, on a one-for-one basis, the  tandem
options  or rights. In addition, certain stock options were granted which become
exercisable (subject to the option vesting schedule) only upon the  cancellation
of the related performance shares for non-attainment of performance targets.
 
    The  following  table summarizes  information with  respect to  Common Stock
options awarded under the 1992 LTIP, the LTIP and the ELTIP:
 
<TABLE>
<CAPTION>
                                            1995                      1994                      1993
                                  ------------------------  ------------------------  ------------------------
                                   SHARES                    SHARES                    SHARES
                                    UNDER    OPTION PRICE     UNDER    OPTION PRICE     UNDER    OPTION PRICE
                                   OPTION      PER SHARE     OPTION      PER SHARE     OPTION      PER SHARE
                                  ---------  -------------  ---------  -------------  ---------  -------------
<S>                               <C>        <C>            <C>        <C>            <C>        <C>
Outstanding, January 1..........  2,456,103  $17.44-$44.13  1,914,832  $19.63-$44.13  1,491,116  $20.36-$44.13
Granted*........................    407,350     $11.81        643,900     $17.44        470,690     $19.63
Exercised**.....................         --             --         --             --         --             --
Canceled........................   (141,079) $11.81-$44.13   (102,629) $17.44-$44.13    (46,974) $20.36-$44.13
                                  ---------                 ---------                 ---------
Outstanding, December 31........  2,722,374  $11.81-$44.13  2,456,103  $17.44-$44.13  1,914,832  $19.63-$44.13
                                  ---------                 ---------                 ---------
                                  ---------                 ---------                 ---------
Exercisable, December 31**......  1,713,446  $11.81-$44.13  1,278,033  $17.44-$44.13    773,256  $24.16-$44.13
                                  ---------                 ---------                 ---------
                                  ---------                 ---------                 ---------
Available for grant, December
 31***..........................    978,663                 1,262,086                 1,835,440
                                  ---------                 ---------                 ---------
                                  ---------                 ---------                 ---------
</TABLE>
 
------------------------
  * Includes 209,300 stock options  granted in 1993  in tandem with  performance
    shares  which  become  exercisable  only upon  cancellation  of  the related
    performance shares.
 
 ** Excludes  outstanding  stock  options  granted   in  1993  in  tandem   with
    performance  shares which become exercisable  (subject to the option vesting
    schedule) only  upon  cancellation of  the  related performance  shares.  In
    January  1996, 171,849 such stock options granted in 1993 became exercisable
    due to the cancellation of the related performance shares.
 
*** Shares available  for grant  is  net of  the  number of  performance  shares
    outstanding which were granted under the provisions of these plans.
 
    SFAS  No. 123, "Accounting for Stock-Based Compensation" which was issued in
1995 is not effective for the Company  until 1996. The statement defines a  fair
value  based method of accounting  (i.e., using an option  pricing model such as
Black-Scholes) for employee stock option or similar equity instrument plans  but
also  allows an entity to continue to measure compensation costs for those plans
using the  intrinsic  value  (the  amount  by which  the  market  price  of  the
underlying  stock  exceeds the  exercise  price of  an  option) based  method of
accounting as prescribed by APB Opinion No. 25. The Company plans to continue to
use the intrinsic value based method.
 
(16) GEOGRAPHIC SEGMENT INFORMATION
    During  1995,  sales  of  oil   to  the  Company's  top  purchaser   totaled
approximately  15  percent of  oil revenue.  During  1994, sales  of oil  to the
Company's top purchaser totaled approximately 18 percent of oil revenue.  During
1993,  sales of  oil to the  Company's top two  purchasers totaled approximately
 
                                       26
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(16) GEOGRAPHIC SEGMENT INFORMATION (CONTINUED)
12 and 10 percent of oil revenues.  Sales of gas to the Company's top  purchaser
in  1995 and 1994 totaled  approximately 12 percent of  gas revenue and for 1993
totaled 14 percent. The  Company believes that the  loss of any major  purchaser
would not have a material adverse effect on the Company's business.
 
    Financial information by segment for the years ended December 31, 1995, 1994
and 1993 are summarized as follows:
 
<TABLE>
<CAPTION>
                                                                UNITED       UNITED        OTHER
                                                                STATES       KINGDOM      FOREIGN      TOTAL
                                                              -----------  -----------  -----------  ---------
                                                                           (MILLIONS OF DOLLARS)
<S>                                                           <C>          <C>          <C>          <C>
DECEMBER 31, 1995
  Revenues
    Oil and gas.............................................  $     571     $     377    $      66   $   1,014
    Gain (loss) on sale of assets...........................        (15)          122           17         124
    Other...................................................        (15)            5            1          (9)
                                                              -----------       -----          ---   ---------
  Total Revenues............................................        541           504           84       1,129
                                                              -----------       -----          ---   ---------
  Expenses
    Operating costs.........................................        164           150           16         330
    Production taxes........................................         33            49           23         105
    Exploration costs.......................................         44             8            7          59
    Depr., depl. and amort..................................        166            96           14         276
    Miscellaneous...........................................          1             5            2           8
                                                              -----------       -----          ---   ---------
  Total Operating Expenses..................................        408           308           62         778
                                                              -----------       -----          ---   ---------
  Operating Profit*.........................................  $     133     $     196    $      22   $     351
                                                              -----------       -----          ---
                                                              -----------       -----          ---
    General and administrative expense......................                                               (64)
    Interest, net...........................................                                              (126)
    Provision for restructuring.............................                                               (25)
    Benefit for income taxes................................                                                22
    Extraordinary item......................................                                               (23)
                                                                                                     ---------
  Net Income................................................                                         $     135
                                                                                                     ---------
                                                                                                     ---------
  Capital Expenditures......................................  $     208**   $      37    $      28   $     273
                                                              -----------       -----          ---   ---------
                                                              -----------       -----          ---   ---------
  Identifiable Assets.......................................  $   1,221     $     410    $      35   $   1,666
                                                              -----------       -----          ---   ---------
                                                              -----------       -----          ---   ---------
</TABLE>
 
------------------------
 * Provision for income taxes on 1995 operating profits, calculated at statutory
   rates,  are $48 million, $65  million and $12 million  for the United States,
   United Kingdom and Other Foreign.
 
** Includes capitalized interest of $10 million.
 
                                       27
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(16) GEOGRAPHIC SEGMENT INFORMATION (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                        UNITED        UNITED        OTHER
                                                                        STATES       KINGDOM       FOREIGN      TOTAL
                                                                      -----------  ------------  -----------  ---------
                                                                                    (MILLIONS OF DOLLARS)
<S>                                                                   <C>          <C>           <C>          <C>
DECEMBER 31, 1994
  Revenues
    Oil and gas.....................................................  $     624    $     355      $     103   $   1,082
    Other...........................................................        (10)          --             --         (10)
                                                                      -----------      -----          -----   ---------
  Total Revenues....................................................        614          355            103       1,072
                                                                      -----------      -----          -----   ---------
  Expenses
    Operating costs.................................................        197          146             31         374
    Production taxes................................................         44           28             40         112
    Exploration costs...............................................         54           12             38         104
    Depr., depl. and amort..........................................        167           86             18         271
    Miscellaneous...................................................         --            1             --           1
                                                                      -----------      -----          -----   ---------
  Total Operating Expenses..........................................        462          273            127         862
                                                                      -----------      -----          -----   ---------
  Operating Profit (Loss)*..........................................  $     152    $      82      $     (24)  $     210
                                                                      -----------      -----          -----
                                                                      -----------      -----          -----
    General and administrative expense..............................                                                (68)
    Interest, net...................................................                                               (150)
    Provision for restructuring.....................................                                                (92)
    Benefit for income taxes........................................                                                 37
    Remeasurement of foreign deferred tax...........................                                                 (2)
    Extraordinary item..............................................                                                (12)
    Cumulative effect of accounting change..........................                                               (948)
                                                                                                              ---------
                                                                                                              ---------
  Net Loss..........................................................                                          $  (1,025)
                                                                                                              ---------
                                                                                                              ---------
  Capital Expenditures..............................................  $     168**  $      65***   $      48   $     281
                                                                      -----------      -----          -----   ---------
                                                                      -----------      -----          -----   ---------
  Identifiable Assets...............................................  $   1,508    $     470      $     140   $   2,118
                                                                      -----------      -----          -----   ---------
                                                                      -----------      -----          -----   ---------
</TABLE>
 
------------------------
  * Provision (benefit) for income taxes  on 1994 operating profits,  calculated
    at  statutory rates, are $55  million, $27 million and  $(3) million for the
    United States, United Kingdom and Other Foreign.
 
 ** Includes capitalized interest of $5 million.
 
*** Includes capitalized interest of $6 million.
 
                                       28
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(16) GEOGRAPHIC SEGMENT INFORMATION (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                          UNITED      UNITED        OTHER
                                                                          STATES      KINGDOM      FOREIGN      TOTAL
                                                                         ---------  -----------  -----------  ---------
                                                                                     (MILLIONS OF DOLLARS)
<S>                                                                      <C>        <C>          <C>          <C>
DECEMBER 31, 1993
  Revenues
    Oil and gas........................................................  $     700  $     265     $     115   $   1,080
    Loss on sale of assets.............................................         (7)        --            --          (7)
    Other..............................................................        (19)        --            --         (19)
                                                                         ---------  -----------       -----   ---------
  Total Revenues.......................................................        674        265           115       1,054
                                                                         ---------  -----------       -----   ---------
  Expenses
    Operating costs....................................................        194        127            32         353
    Production taxes...................................................         52          9            51         112
    Exploration costs..................................................         57         19            24         100
    Depr., depl. and amort.............................................        261        111            23         395
    Miscellaneous......................................................          1         --            --           1
                                                                         ---------  -----------       -----   ---------
  Total Operating Expenses.............................................        565        266           130         961
                                                                         ---------  -----------       -----   ---------
  Operating Profit (Loss)*.............................................  $     109  $      (1)    $     (15)  $      93
                                                                         ---------  -----------       -----
                                                                         ---------  -----------       -----
    General and administrative expense.................................                                             (85)
    Interest, net......................................................                                            (116)
    Benefit for income taxes...........................................                                              10
    Remeasurement of foreign deferred tax..............................                                               5
    Extraordinary item.................................................                                              (7)
                                                                                                              ---------
  Net Loss.............................................................                                       $    (100)
                                                                                                              ---------
                                                                                                              ---------
  Capital Expenditures.................................................  $     202  $     232**   $      19   $     453
                                                                         ---------  -----------       -----   ---------
                                                                         ---------  -----------       -----   ---------
  Identifiable Assets..................................................  $   1,861  $   1,589     $     174   $   3,624
                                                                         ---------  -----------       -----   ---------
                                                                         ---------  -----------       -----   ---------
</TABLE>
 
------------------------
 * Provision (benefit) for income taxes on 1993 operating profits, calculated at
   statutory rates, are $44 million and  $(2) million for the United States  and
   Other Foreign.
 
** Includes capitalized interest of $46 million.
 
(17) STATEMENT OF CASH FLOWS
    Amounts paid for interest and income taxes were as follows:
 
<TABLE>
<CAPTION>
                                                                                   1995       1994       1993
                                                                                 ---------  ---------  ---------
                                                                                      (MILLIONS OF DOLLARS)
<S>                                                                              <C>        <C>        <C>
Interest paid (net of capitalized interest)....................................  $     144  $     128  $     119
Income taxes paid (refunded)...................................................  $     (15) $     (11) $      14
</TABLE>
 
    During  1994, the  Company exchanged its  interests in  the undeveloped U.K.
North Sea Britannia field and certain other undeveloped domestic properties  for
Conoco's  interests in the developed U.K.  North Sea Hutton, Lyell and Murchison
fields and certain undeveloped interests. This transaction was accounted for  by
the  Company  as  a  non-cash  property  exchange,  except  for  $40  million of
associated divestment proceeds received by the Company. During 1993, the Company
recognized deferred tax liabilities of $3 million associated with  international
properties  acquisitions. In  accordance with Statement  of Financial Accounting
Standards No.  95, "Statement  of  Cash Flows,"  non-cash transactions  are  not
reflected within the accompanying Consolidated Statements of Cash Flows.
 
                                       29
<PAGE>
                              ORYX ENERGY COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(18) DEFERRED CREDITS AND OTHER LIABILITIES
    At  December 31, the  Company's deferred credits  and other liabilities were
comprised of the following:
 
<TABLE>
<CAPTION>
                                                                                       1995       1994
                                                                                     ---------  ---------
                                                                                         (MILLIONS OF
                                                                                           DOLLARS)
<S>                                                                                  <C>        <C>
Employee benefit obligations.......................................................  $      92  $      80
Deferred gains on interest rate hedges.............................................         25         32
Minority interest in consolidated subsidiaries.....................................         14         17
Accrued environmental cleanup costs................................................         20         21
Other..............................................................................         12          5
                                                                                     ---------  ---------
                                                                                     $     163  $     155
                                                                                     ---------  ---------
                                                                                     ---------  ---------
</TABLE>
 
    Environmental  cleanup  costs   have  been  accrued   in  response  to   the
identification  of  several sites  that require  cleanup based  on environmental
pollution, some  of  which  have  been designated  as  superfund  sites  by  the
Environmental  Protection  Agency  (EPA).  The  Company  has  been  named  as  a
potentially responsible party (PRP) at four sites pursuant to the  Comprehensive
Environmental  Response, Compensation and Liability Act  of 1980, as amended. At
two of  these sites,  the Company  has  been named  as a  de minimis  party  and
therefore  expects its liability  to be small.  At a third  site, the Company is
reviewing its  options and  anticipates  that it  will participate  in  steering
committee activities with the EPA. At the fourth and largest site, the Operating
Industries,  Inc. site in California, the Company has participated in a steering
committee consisting of  139 companies.  The steering committee  and other  PRPs
previously  entered into two partial consent  decrees with the EPA providing for
remedial actions which have been or are to be completed. The steering  committee
has  successfully negotiated a  third partial consent  decree which provides for
the following  remedial actions:  a  clay cover,  methane capturing  wells,  and
leachate  destruction  facilities.  The  remaining  work  at  the  site involves
groundwater evaluation and long-term operation and maintenance. The Company is a
member of the group that is responsible for carrying out the first phase of  the
work,  which is  expected to  take 5  to 8  years. Completion  of all  phases is
estimated to take up to 30 years.  The maximum liability of the group, which  is
joint  and  several for  each member  of the  group, is  expected to  range from
approximately $450 million  to $600  million, of  which the  Company's share  is
expected  to be  approximately $13 million.  Cleanup costs are  payable over the
period that the work is completed.
 
    Based on the facts outlined above and the Company's ongoing analyses of  the
actions  where it has been identified as a PRP, the Company believes that it has
accrued sufficient reserves to absorb the ultimate cost of such actions and that
such costs therefore will not have a material impact on the Company's liquidity,
capital resources or financial condition. While liability at superfund sites  is
typically  joint and several, the Company has no reason to believe that defaults
by other PRPs  will result in  liability of the  Company materially larger  than
expected.
 
                                       30
<PAGE>
                              ORYX ENERGY COMPANY
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Shareholders and Board of Directors, Oryx Energy Company:
 
    We  have audited the accompanying consolidated balance sheets of Oryx Energy
Company and its Subsidiaries as  of December 31, 1995  and 1994 and the  related
consolidated  statements  of income,  cash  flows and  changes  in shareholders'
deficit for each of the three years in the period ended December 31, 1995. These
financial statements are  the responsibility  of the  Company's management.  Our
responsibility  is to express an opinion  on these financial statements based on
our audits.
 
    We conducted  our  audits in  accordance  with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence  supporting
the  amounts and disclosures in the financial statements. An audit also includes
assessing the  accounting  principles used  and  significant estimates  made  by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
    In our opinion, the financial  statements referred to above present  fairly,
in  all material  respects, the consolidated  financial position  of Oryx Energy
Company and  its  Subsidiaries  as  of  December  31,  1995  and  1994  and  the
consolidated  results of their operations  and their cash flows  for each of the
three years in the period ended  December 31, 1995 in conformity with  generally
accepted accounting principles.
 
    As  discussed in Notes 1 and 7 to the consolidated financial statements, the
Company changed its  accounting policy  for calculating  the oil  and gas  asset
ceiling  test in 1994 and its  methods of accounting for postretirement benefits
other than pensions and postemployment benefits in 1993.
 
                                          COOPERS & LYBRAND L.L.P.
 
Dallas, Texas
February 19, 1996
 
                                       31
<PAGE>
                              ORYX ENERGY COMPANY
         SUPPLEMENTARY FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
 
OIL AND GAS DATA
CAPITALIZED COSTS
 
<TABLE>
<CAPTION>
                                                                            UNITED      UNITED        OTHER
                                                                            STATES      KINGDOM      FOREIGN      TOTAL
                                                                           ---------  -----------  -----------  ---------
                                                                                       (MILLIONS OF DOLLARS)
<S>                                                                        <C>        <C>          <C>          <C>
DECEMBER 31, 1995
  Proved properties......................................................  $   3,671   $   1,184    $      90   $   4,945
  Unproved properties....................................................         38          84            4         126
                                                                           ---------  -----------       -----   ---------
  Total capitalized costs................................................      3,709       1,268           94       5,071
  Less accum. depr., depl. and amort.....................................      2,743         877           30       3,650
                                                                           ---------  -----------       -----   ---------
  Net capitalized costs..................................................  $     966   $     391    $      64   $   1,421
                                                                           ---------  -----------       -----   ---------
                                                                           ---------  -----------       -----   ---------
DECEMBER 31, 1994
  Proved properties......................................................  $   3,975   $   1,863    $     274   $   6,112
  Unproved properties....................................................         42          87           14         143
                                                                           ---------  -----------       -----   ---------
  Total capitalized costs................................................      4,017       1,950          288       6,255
  Less accum. depr., depl. and amort.....................................      3,011       1,243          159       4,413
                                                                           ---------  -----------       -----   ---------
  Net capitalized costs (Note 7).........................................  $   1,006   $     707    $     129   $   1,842
                                                                           ---------  -----------       -----   ---------
                                                                           ---------  -----------       -----   ---------
</TABLE>
 
COSTS INCURRED IN OIL AND GAS PRODUCING ACTIVITIES
 
<TABLE>
<CAPTION>
                                                                            UNITED      UNITED        OTHER
                                                                            STATES      KINGDOM      FOREIGN      TOTAL
                                                                           ---------  -----------  -----------  ---------
                                                                                       (MILLIONS OF DOLLARS)
<S>                                                                        <C>        <C>          <C>          <C>
1995
  Property acquisition costs:
    Proved...............................................................  $       6   $      --    $      --   $       6
    Unproved.............................................................          6          --           --           6
  Exploration costs......................................................         41           8           10          59
  Development costs......................................................        167*         37           25         229
                                                                           ---------  -----------       -----   ---------
      Total..............................................................  $     220   $      45    $      35   $     300
                                                                           ---------  -----------       -----   ---------
                                                                           ---------  -----------       -----   ---------
1994
  Property acquisition costs:
    Unproved.............................................................  $       4   $      --    $      --   $       4
  Exploration costs......................................................         41          11           39          91
  Development costs......................................................        144*         56**         19         219
                                                                           ---------  -----------       -----   ---------
      Total..............................................................  $     189   $      67    $      58   $     314
                                                                           ---------  -----------       -----   ---------
                                                                           ---------  -----------       -----   ---------
1993
  Property acquisition costs:
    Proved...............................................................  $      11   $      33    $      --   $      44
    Unproved.............................................................          8          --           --           8
  Exploration costs......................................................         62          15           26         103
  Development costs......................................................        147         147**          2         296
                                                                           ---------  -----------       -----   ---------
      Total..............................................................  $     228   $     195    $      28   $     451
                                                                           ---------  -----------       -----   ---------
                                                                           ---------  -----------       -----   ---------
</TABLE>
 
------------------------
 * Excludes capitalized interest  of $10  million and  $5 million  for 1995  and
   1994.
 
** Excludes  capitalized interest  of $6  million and  $46 million  for 1994 and
   1993.
 
                                       32
<PAGE>
EXPLORATION COSTS
 
<TABLE>
<CAPTION>
                                                                            UNITED      UNITED        OTHER
                                                                            STATES      KINGDOM      FOREIGN      TOTAL
                                                                           ---------  -----------  -----------  ---------
                                                                                       (MILLIONS OF DOLLARS)
<S>                                                                        <C>        <C>          <C>          <C>
1995
  Dry hole costs.........................................................  $      12   $      --    $      --   $      12
  Leasehold impairment...................................................          9          --           --           9
  Geological and geophysical.............................................         22           8            6          36
  Other..................................................................          1          --            1           2
                                                                           ---------  -----------       -----   ---------
                                                                           $      44   $       8    $       7   $      59
                                                                           ---------  -----------       -----   ---------
                                                                           ---------  -----------       -----   ---------
1994
  Dry hole costs.........................................................  $      10   $       4    $      25   $      39
  Leasehold impairment...................................................         18          --           --          18
  Geological and geophysical.............................................         25           7           13          45
  Other..................................................................          1           1           --           2
                                                                           ---------  -----------       -----   ---------
                                                                           $      54   $      12    $      38   $     104
                                                                           ---------  -----------       -----   ---------
                                                                           ---------  -----------       -----   ---------
1993
  Dry hole costs.........................................................  $      21   $       5    $      11   $      37
  Leasehold impairment...................................................          3           4            1           8
  Geological and geophysical.............................................         31           9           12          52
  Other..................................................................          2           1           --           3
                                                                           ---------  -----------       -----   ---------
                                                                           $      57   $      19    $      24   $     100
                                                                           ---------  -----------       -----   ---------
                                                                           ---------  -----------       -----   ---------
</TABLE>
 
ESTIMATED NET QUANTITIES OF PROVED OIL AND GAS RESERVES
 
    Proved reserve  quantities  were  based on  estimates  prepared  by  Company
engineers  in  accordance  with  guidelines established  by  the  Securities and
Exchange Commission  and were  reviewed by  Gaffney, Cline  & Associates,  Inc.,
independent  petroleum  engineers. The  Company considers  such estimates  to be
reasonable; however, due  to inherent  uncertainties and the  limited nature  of
reservoir  data, estimates of underground reserves  are imprecise and subject to
change over time as additional information becomes available.
 
    There has been no major discovery  or other favorable or adverse event  that
has  caused a significant change in estimated proved reserves since December 31,
1995.  The  Company  has  no  long-term  supply  agreements  or  contracts  with
governments  or authorities in  which it acts  as producer nor  does it have any
interest in oil and gas operations accounted for by the equity method.
 
                                       33
<PAGE>
PROVED RESERVES
<TABLE>
<CAPTION>
                                                                                                            RECOVERABLE
                                                                                                              NATURAL
                                                                                                            GAS LIQUIDS
                                                               CRUDE OIL AND CONDENSATE                    (MILLIONS OF
                                                                (MILLIONS OF BARRELS)                        BARRELS)
                                               --------------------------------------------------------  -----------------
                                                  U.S.         U.K.        OTHER FOREIGN       TOTAL           U.S.
                                               -----------  -----------  -----------------     -----     -----------------
<S>                                            <C>          <C>          <C>                <C>          <C>
BALANCE AT DECEMBER 31, 1992.................         255          189              53             497              25
  Revisions of previous estimates............          (4)          (3)              6              (1)             (1)
  Improved recovery..........................           1           --              --               1              --
  Purchases of minerals in place.............          --           13              --              13              --
  Sales of minerals in place.................         (12)          --              --             (12)             (2)
  Extensions and discoveries.................          19            2               8              29               2
  Production.................................         (21)         (13)             (6)            (40)             (3)
                                                                                                                    --
                                                      ---          ---             ---             ---
 
BALANCE AT DECEMBER 31, 1993.................         238          188              61             487              21
  Revisions of previous estimates............          (2)           1              (1)             (2)              3
  Improved recovery..........................          --           --              --              --              --
  Purchases of minerals in place.............          --           24**            --              24              --
  Sales of minerals in place.................         (22)         (19)             --             (41)             --
  Extensions and discoveries.................           6           --              23              29              --
  Production.................................         (17)         (20)             (7)            (44)             (3)
                                                                                                                    --
                                                      ---          ---             ---             ---
BALANCE AT DECEMBER 31, 1994.................         203          174              76             453              21
  Revisions of previous estimates............          (6)           1              (1)             (6)              3
  Improved recovery..........................           5           --              --               5              --
  Purchases of minerals in place.............           1           --              --               1              --
  Sales of minerals in place.................         (10)         (54)            (36)           (100)             (4)
  Extensions and discoveries.................          12           --               3              15              --
  Production.................................         (17)         (20)             (5)            (42)             (2)
                                                                                                                    --
                                                      ---          ---             ---             ---
BALANCE AT DECEMBER 31, 1995.................         188          101              37             326              18
                                                                                                                    --
                                                                                                                    --
                                                      ---          ---             ---             ---
                                                      ---          ---             ---             ---
PROVED DEVELOPED RESERVES AT DECEMBER 31
  1992.......................................         175           76              30             281              20
  1993.......................................         156           85              31             272              16
  1994.......................................         130          112              31             273              16
  1995.......................................         116           80              13             209              13
 
<CAPTION>
 
                                                           NATURAL GAS
                                                    (BILLIONS OF CUBIC FEET)
 
                                               -----------------------------------
                                                  U.S.*        U.K.        TOTAL
                                               -----------  -----------  ---------
<S>                                            <C>          <C>          <C>
BALANCE AT DECEMBER 31, 1992.................       1,510          427       1,937
  Revisions of previous estimates............           5           52          57
  Improved recovery..........................           1           --           1
  Purchases of minerals in place.............           4           --           4
  Sales of minerals in place.................         (66)          --         (66)
  Extensions and discoveries.................         168           --         168
  Production.................................        (191)         (29)       (220)
 
                                                    -----          ---   ---------
BALANCE AT DECEMBER 31, 1993.................       1,431          450       1,881
  Revisions of previous estimates............          23            4          27
  Improved recovery..........................          --           --          --
  Purchases of minerals in place.............           2            4**         6
  Sales of minerals in place.................        (115)        (248)       (363)
  Extensions and discoveries.................         188           --         188
  Production.................................        (196)         (23)       (219)
 
                                                    -----          ---   ---------
BALANCE AT DECEMBER 31, 1994.................       1,333          187       1,520
  Revisions of previous estimates............          62            5          67
  Improved recovery..........................           1           --           1
  Purchases of minerals in place.............           4           --           4
  Sales of minerals in place.................         (56)        (149)       (205)
  Extensions and discoveries.................         125           --         125
  Production.................................        (171)         (18)       (189)
 
                                                    -----          ---   ---------
BALANCE AT DECEMBER 31, 1995.................       1,298           25       1,323
 
                                                    -----          ---   ---------
                                                    -----          ---   ---------
PROVED DEVELOPED RESERVES AT DECEMBER 31
  1992.......................................       1,069          121       1,190
  1993.......................................       1,010           95       1,105
  1994.......................................         907          143       1,050
  1995.......................................         881           15         896
</TABLE>
 
------------------------
 *Natural  gas reserve volumes include  liquefiable hydrocarbons approximating 5
  percent  of  total  gas  reserves  which  are  recoverable  downstream.   Such
  recoverable  liquids also  have been included  in natural  gas liquids reserve
  volumes.
 
**Represents reserves received in  the asset exchange.  These amounts have  been
  excluded in calculating FD&A and reserve replacement (see Note 17).
 
STANDARDIZED MEASURE
 
    The  standardized measure of discounted future net cash flows from estimated
production of proved  oil and gas  reserves after income  taxes is presented  in
accordance  with the provisions of  SFAS No. 69, "Disclosures  about Oil and Gas
Producing Activities."  In computing  this data,  assumptions other  than  those
mandated  by  SFAS No.  69 could  produce  substantially different  results. The
Company cautions  against  viewing this  information  as a  forecast  of  future
economic conditions or revenues.
 
    The  standardized measure has been prepared assuming year-end selling prices
adjusted for future fixed and  determinable contractual price changes,  year-end
development and production costs,
 
                                       34
<PAGE>
year-end  statutory tax rates  adjusted for future  tax rates already legislated
and a 10 percent annual discount rate. The year-end realized prices were $17.95,
$15.31 and $11.75 per barrel  of oil and $2.27, $1.82  and $2.03 per mcf of  gas
for 1995, 1994 and 1993.
 
<TABLE>
<CAPTION>
                                                                       UNITED     UNITED      OTHER
                                                                       STATES     KINGDOM    FOREIGN     TOTAL
                                                                      ---------  ---------  ---------  ---------
                                                                                (MILLIONS OF DOLLARS)
<S>                                                                   <C>        <C>        <C>        <C>
1995
  Future cash inflows...............................................  $   6,558  $   2,237  $     548  $   9,343
  Future production and development costs...........................     (2,618)    (1,661)      (353)    (4,632)
  Future income tax expenses........................................     (1,289)      (129)       (47)    (1,465)
                                                                      ---------  ---------  ---------  ---------
  Future net cash flows.............................................      2,651        447        148      3,246
  Discount at 10 percent............................................     (1,060)       (61)       (68)    (1,189)
                                                                      ---------  ---------  ---------  ---------
  Standardized measure..............................................  $   1,591  $     386  $      80  $   2,057
                                                                      ---------  ---------  ---------  ---------
                                                                      ---------  ---------  ---------  ---------
1994
  Future cash inflows...............................................  $   5,729  $   3,631  $   1,140  $  10,500
  Future production and development costs...........................     (2,950)    (2,627)      (894)    (6,471)
  Future income tax expenses........................................       (847)       (80)       (70)      (997)
                                                                      ---------  ---------  ---------  ---------
  Future net cash flows.............................................      1,932        924        176      3,032
  Discount at 10 percent............................................       (689)      (240)       (73)    (1,002)
                                                                      ---------  ---------  ---------  ---------
  Standardized measure..............................................  $   1,243  $     684  $     103  $   2,030
                                                                      ---------  ---------  ---------  ---------
                                                                      ---------  ---------  ---------  ---------
</TABLE>
 
SUMMARY OF CHANGES IN THE STANDARDIZED MEASURE
 
<TABLE>
<CAPTION>
                                                                                  1995       1994       1993
                                                                                ---------  ---------  ---------
                                                                                     (MILLIONS OF DOLLARS)
<S>                                                                             <C>        <C>        <C>
Balance, beginning of year....................................................  $   2,030  $   1,428  $   2,408
Increase (decrease) in discounted future net cash flows:
  Sales of oil and gas production, net of related costs.......................       (579)      (596)      (606)
  Revisions to estimates of proved reserves:
    Prices....................................................................        671      1,040     (1,389)
    Development costs.........................................................         20        390          3
    Production costs..........................................................         67       (865)        99
    Quantities................................................................         71         14         --
    Other.....................................................................       (140)       292        (89)
  Extensions, discoveries and improved recovery, less related costs...........        345        233        111
  Development costs incurred during the period................................        229        219        321
  Purchases of reserves in place..............................................         12         89         53
  Sales of reserves in place..................................................       (536)       (83)       (59)
  Accretion of discount.......................................................        219        177        298
  Income taxes................................................................       (352)      (308)       278
                                                                                ---------  ---------  ---------
Balance, end of year..........................................................  $   2,057  $   2,030  $   1,428
                                                                                ---------  ---------  ---------
                                                                                ---------  ---------  ---------
</TABLE>
 
                                       35
<PAGE>
QUARTERLY FINANCIAL INFORMATION
 
<TABLE>
<CAPTION>
                                                                                   QUARTER ENDED
                                                              --------------------------------------------------------
                                                               MARCH 31      JUNE 30     SEPTEMBER 30     DECEMBER 31     TOTAL
                                                              -----------  -----------  ---------------  -------------  ---------
                                                                        (MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<S>                                                           <C>          <C>          <C>              <C>            <C>
Revenue:
  1995......................................................   $     293    $     285      $     345       $     206    $   1,129
                                                              -----------       -----          -----           -----    ---------
                                                              -----------       -----          -----           -----    ---------
  1994
    As reported.............................................   $     260    $     255      $     271
    Restatement of other revenues for accounting change.....          --           --              2
                                                              -----------       -----          -----
    As restated.............................................   $     260    $     255      $     273       $     284    $   1,072
                                                              -----------       -----          -----           -----    ---------
                                                              -----------       -----          -----           -----    ---------
Gross profit:*
  1995......................................................   $      84    $      68      $      45       $      50    $     247
                                                              -----------       -----          -----           -----    ---------
                                                              -----------       -----          -----           -----    ---------
  1994......................................................   $      50    $      53      $      45       $      76    $     224
                                                              -----------       -----          -----           -----    ---------
                                                              -----------       -----          -----           -----    ---------
Net income (loss):
  1995
    Before extraordinary item...............................   $      13    $      25      $     108       $      12    $     158
    Extraordinary item......................................          --          (14)            (1)             (8)         (23)
                                                              -----------       -----          -----           -----    ---------
                                                               $      13    $      11      $     107       $       4    $     135
                                                              -----------       -----          -----           -----    ---------
                                                              -----------       -----          -----           -----    ---------
  1994**
    As reported
      Before extraordinary item.............................   $    (140)   $     (41)     $     (44)
      Extraordinary item....................................          --           --            (12)
                                                              -----------       -----          -----
                                                               $    (140)   $     (41)     $     (56)
                                                              -----------       -----          -----
                                                              -----------       -----          -----
    As restated
      Before extraordinary item and cumulative effect of
       accounting change....................................   $     (60)   $      (7)     $     (12)      $      14    $     (65)
      Extraordinary item....................................          --           --            (12)             --          (12)
      Cumulative effect of accounting change................        (948)          --             --              --         (948)
                                                              -----------       -----          -----           -----    ---------
                                                               $  (1,008)   $      (7)     $     (24)      $      14    $  (1,025)
                                                              -----------       -----          -----           -----    ---------
                                                              -----------       -----          -----           -----    ---------
</TABLE>
 
                                       36
<PAGE>
QUARTERLY FINANCIAL INFORMATION
 
<TABLE>
<CAPTION>
                                                                               QUARTER ENDED
                                                      ---------------------------------------------------------------
                                                      MARCH 31     JUNE 30    SEPTEMBER 30    DECEMBER 31     TOTAL
                                                      ---------  -----------  -------------  -------------  ---------
                                                              (MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<S>                                                   <C>        <C>          <C>            <C>            <C>
Net income (loss) per share of common stock:
  1995
    Before extraordinary item.......................  $     .13   $     .25     $    1.04      $     .12    $    1.54
    Extraordinary item..............................         --        (.14)         (.01)          (.08)        (.22)
                                                      ---------       -----        ------          -----    ---------
                                                      $     .13   $     .11     $    1.03      $     .04    $    1.32
                                                      ---------       -----        ------          -----    ---------
                                                      ---------       -----        ------          -----    ---------
  1994**
    As reported
      Before extraordinary item.....................  $   (1.44)  $    (.43)    $    (.45)
      Extraordinary item............................         --          --          (.12)
                                                      ---------       -----        ------
                                                      $   (1.44)  $    (.43)    $    (.57)
                                                      ---------       -----        ------
                                                      ---------       -----        ------
    As restated
      Before extraordinary item and
       cumulative effect of accounting
       change.......................................  $    (.62)  $    (.08)    $    (.13)     $     .14    $    (.68)
      Extraordinary item............................         --          --          (.12)            --         (.12)
      Cumulative effect of accounting
       change.......................................      (9.77)         --            --             --        (9.73)
                                                      ---------       -----        ------          -----    ---------
                                                      $  (10.39)  $    (.08)    $    (.25)     $     .14    $  (10.53)
                                                      ---------       -----        ------          -----    ---------
                                                      ---------       -----        ------          -----    ---------
</TABLE>
 
------------------------
 * Gross  profit  equals  oil  and  gas revenues  plus  gas  plant  margins less
   production  cost,   exploration   cost  and   depreciation,   depletion   and
   amortization.
 
** See Notes 1 and 7.
 
                                       37
<PAGE>
                              ORYX ENERGY COMPANY
                        DIRECTORS OF ORYX ENERGY COMPANY
 
Jerry W. Box
 Executive Vice President and Chief
  Operating Officer
 
William E. Bradford
 Dresser Industries, Inc.
 President and Chief Executive Officer
 
Robert B. Gill
 J.C. Penney Company, Inc.
 Retired Vice Chairman of the Board
 
David S. Hollingsworth
 Hercules Incorporated
 Retired Chairman of the Board and Chief
  Executive Officer
 
Robert L. Keiser
 Chairman of the Board, Chief Executive
  Officer, and President
 
Edward W. Moneypenny
 Executive Vice President, Finance, and Chief
  Financial Officer
 
Charles H. Pistor, Jr.
 Southern Methodist University
  Retired Vice Chair
 
Paul R. Seegers
 Seegers Enterprises
 President
 Centex Corporation
  Retired Chairman of the Board and Chief
    Executive Officer
 
Ian L. White-Thomson
 U.S. Borax Inc.
 President and Chief Executive Officer
 
COMMITTEES OF THE BOARD
 
AUDIT COMMITTEE
 
Paul R. Seegers, Chairman
William E. Bradford
Robert B. Gill
Ian L. White-Thomson
 
BOARD POLICY AND NOMINATING COMMITTEE
 
Charles H. Pistor, Jr., Chairman
William E. Bradford
Paul R. Seegers
 
COMPENSATION COMMITTEE
 
David S. Hollingsworth, Chairman
Robert B. Gill
Ian L. White-Thomson
 
EXECUTIVE COMMITTEE
Robert L. Keiser, Chairman
Jerry W. Box
Edward W. Moneypenny
Charles H. Pistor, Jr.
 
MLP COMMITTEE
Jerry W. Box
Robert L. Keiser
Edward W. Moneypenny
 
PRINCIPAL OFFICERS OF ORYX ENERGY COMPANY
 
Jerry W. Box
 Executive Vice President and Chief
  Operating Officer
 
David F. Chavenson
 Treasurer
 
Sherri T. Durst
 General Auditor
 
Frances G. Heartwell
 Vice President, Human Resources
  and Administration
 
Robert L. Keiser
 Chairman of the Board, Chief Executive
  Officer, and President
 
William C. Lemmer
 Vice President, General Counsel and
  Secretary
 
Edward W. Moneypenny
 Executive Vice President, Finance, and Chief
  Financial Officer
 
Robert L. Thompson
 Comptroller and Corporate Planning
  Director
 
                                       38
<PAGE>
                              ORYX ENERGY COMPANY
                OF INTEREST TO ORYX ENERGY COMPANY SHAREHOLDERS
 
<TABLE>
<S>                  <C>                                         <C>
PRINCIPAL OFFICE     TRANSFER AGENT AND REGISTRAR                ANNUAL MEETING
 
13155 Noel Road      Chemical Mellon Shareholder Services, LLC   Thursday, May 2, 1996
Dallas, Texas 75240  Shareholder Relations Department            9:00 a.m.
                     P.O. Box 3068                               Cityplace Conference Center
                     New York, N.Y. 10116-3068                   2711 North Haskell
                     1-800-648-8393                              Dallas, Texas 75204
</TABLE>
 
    For  further  information about  the meeting,  please contact  the Company's
Secretary at our principal office.
 
PUBLICATIONS AVAILABLE TO SHAREHOLDERS
 
    We will be  pleased to  furnish the  following reports  to shareholders  who
write to Shareholders Relations at our principal office, or call 1-800-846-ORYX:
 
    Quarterly Report -- a review of new developments and quarterly financial and
    operating  results,  published  for  quarters  ending  in  March,  June  and
    September
 
    Form 10-K -- Annual Report for 1995 filed with the SEC (excluding exhibits)
 
    Exhibits are available upon request at a reasonable charge.
 
INTERNET ADDRESS
 
    Oryx Annual and Quarterly  Reports can be viewed  at the following  address:
http://www.oryx.com
 
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
 
    The  Company's notice of annual meeting,  proxy statement and proxy card are
mailed about one month before the annual meeting.
 
MARKET FOR ORYX ENERGY COMMON STOCK AND RELATED SECURITY MATTERS
 
    The Common Stock, $1 par value, of the Company trades on the New York  Stock
Exchange under the symbol "ORX." The following table sets forth the high and low
sales  prices, as reported on the New York Stock Exchange Composite Transactions
quotations, and the dividends paid for the periods indicated:
 
<TABLE>
<CAPTION>
                                                                                HIGH        LOW      DIVIDENDS
                                                                               -------    -------   -----------
<S>                                                                            <C>        <C>       <C>
1995:
  First quarter.............................................................   $13 1/4    $ 9 7/8    $      --
  Second quarter............................................................   $14 3/4    $12        $      --
  Third quarter.............................................................   $14 3/4    $12 5/8    $      --
  Fourth quarter............................................................   $14        $10 3/4    $      --
1994:
  First quarter.............................................................   $20        $15 7/8    $      --
  Second quarter............................................................   $18 1/4    $14 3/8    $      --
  Third quarter.............................................................   $16        $13 7/8    $      --
  Fourth quarter............................................................   $15 1/8    $10 5/8    $      --
</TABLE>
 
    The Company had 32,438 holders of record of Common Stock as of February  26,
1996.
 
                                       39