PAINEWEBBER/GEODYNE ENERGY INCOME LIMITED PARTNERSHIP II-E
                            AGREEMENT AND CERTIFICATE
                             OF LIMITED PARTNERSHIP

       Agreement and Certificate of Limited  Partnership,  dated as of September
27, 1988, among Geodyne  Properties,  Inc., a Delaware  corporation,  as General
Partner, and Geodyne Depositary Company, a Delaware corporation, the Depositary.

       Whereas,  the parties hereto wish to form a limited partnership under the
Oklahoma Revised Uniform Limited  Partnership Act pursuant to this Agreement and
Certificate of Limited Partnership;

       Now,  Therefore,  in  consideration of the mutual promises and agreements
made  herein,  the  parties,  intending  to be legally  bound,  hereby  agree as
follows:

                                   ARTICLE ONE
                                  Defined Terms

       The  defined  terms  used in this  Agreement  shall  unless  the  context
otherwise  requires,  have the  meanings  specified  in this  Article  One.  The
singular  shall  include the plural and the  masculine  gender shall include the
feminine,  the neuter and vice versa, as the context requires. Any terms used in
this Agreement which are defined in the Production Partnership Agreement and are
not otherwise defined herein shall have the respective meanings set forth in the
Production Partnership Agreement.

       "Accountants"  shall mean Arthur Young & Company or such other nationally
recognized firm of independent  certified public accountants as shall be engaged
from time to time by the General Partner for the Limited Partnership.

       "Act" shall mean the Oklahoma Revised Uniform Limited Partnership Act, as
amended from time to time.

       "Activation" or "Activated" shall mean the date on which (i) with respect
to the  Limited  Partnership,  the Limited  Partnership  is formed and (ii) with
respect to the Production  Partnership,  the Limited Partnership shall have made
its capital contribution to the Production Partnership.

       "Affiliate"  shall mean, when used with reference to a specified  Person:
(a) any Person directly or indirectly owning, controlling, or holding with power
to vote 10% or more of the



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outstanding  voting  securities of the specified  Person;  (b) any Person 10% or
more of whose  outstanding  voting  securities are directly or indirectly owned,
controlled,  or held with power to vole by the specified Person;  (c) any Person
directly or indirectly controlling, controlled by, or under common control with,
the specified  Person;  (d) any Person who is an officer,  director,  partner or
trustee  of, or serves in a similar  capacity  with  respect  to, the  specified
Person or of which the  specified  Person is an  officer,  director,  partner or
trustee,  or with  respect  to which the  specified  Person  serves in a similar
capacity;   and  (e)  any   relative   or  spouse  of  the   specified   Person.
Notwithstanding  the  foregoing,  no Person  shall be deemed to be an  Affiliate
solely by reason of its  ownership of  depositary  units or limited  partnership
interests in a limited partnership.

       "Affiliated  Program" shall mean a drilling or income program (whether in
the  form of a  limited  partnership,  general  partnership,  joint  venture  or
otherwise) interests in which were offered to persons or entities not engaged in
a trade or business within the oil and gas industry (other than by virtue of its
participation  in an  Affiliated  Program)  and of which the General  Partner or
Affiliate serves as general partner, venturer, sponsor or manager.

       "Agreement"   shall  mean  this  Agreement  and  Certificate  of  Limited
Partnership as originally executed and as amended from time to time.

       "Capital  Account"  shall  mean,  as to any  Partner or Unit  Holder,  an
account  maintained on the books of the Limited  Partnership in accordance  with
the provisions of Section 5.3D below.

       "Capital  Contribution"  shall mean the cash contribution of a Partner to
the Limited Partnership.

       "Code" shall mean the Internal  Revenue Code of 1986,  as amended (or any
corresponding provisions of succeeding law).

       "Commissions"  shall mean the cash fees payable to the Dealer Manager and
the Selected  Dealers in connection with their  participation in the offering of
Depositary Units.

       "Consent"  shall  mean the  consent  of a Person,  given as  provided  in
Section 12.1, to do the act or thing for which the consent is solicited,  or the
act of granting such consent, as the context may require.



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       "Dealer  Manager"  shall  mean  PaineWebber   Incorporated,   a  Delaware
corporation.

       "Depositary"   shall  mean  Geodyne   Depositary   Company,   a  Delaware
corporation  and the Limited  Partner or any Person who at the time of reference
thereto has been  admitted to the  Limited  Partnership  with the consent of the
General Partner as a successor to the Interest of Geodyne  Depositary Company in
the Limited Partnership.

       "Depositary  Receipt" shall mean a certificate  issued in registered form
by the Depositary evidencing the ownership of one or more Depositary Units.


       "Depositary  Unit"  shall  mean an  increment  of the  attributes  of the
Interest  of the  Depositary  as a Limited  Partner  that is  assigned to a Unit
Holder.

       "Direct  Administrative Costs" shall mean the actual and necessary direct
costs  attributable to services  provided to the Limited  Partnership by parties
other  than the  General  Partner or its  Affiliates,  whether  incurred  by the
Limited  Partnership  directly  or  incurred  by  the  General  Partner  or  its
Affiliates,  including the annual audit fees, legal fees and expenses,  the cost
of  reviewing  tax  returns and  reports,  the cost of  evaluations  prepared by
independent  petroleum engineers pursuant to Section l0.4C of this Agreement and
all other such costs  directly  incurred  by or for the  benefit of the  Limited
Partnership.

       "Distributable   Cash"   shall   mean,   with   respect  to  the  Limited
Partnership's  operations at any time, the amount of cash assets on hand at such
time less amounts  required to be retained out of such cash assets,  in the sole
judgment of the General  Partner,  to pay costs,  expenses or other  obligations
whether then accrued or anticipated to accrue in the future.

       "Eligible Investor" shall mean a person who is an "independent  producer"
for  purposes  of the  Crude  Oil  Windfall  Profit  Tax Act of 1980  and who is
qualified to hold an interest in oil and gas leases on federal lands,  including
offshore  areas under federal laws and  regulations in effect from time to time.
As of the date hereof, the term "Eligible  Investor" means:  (a)(i) a citizen of
the United  States who has  attained  the age of majority  under the laws of the
state in which he resides,



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(ii) an  association  (including  a  partnership,  joint  tenancy  or tenancy in
common)  organized or existing  under the laws of the United States or any state
of  territory  thereof,  all of the members of which are  citizens of the United
States or (iii) a corporation  organized  under the laws of the United States or
any  state  or  territory  thereof,  of  which  corporation,  to the best of its
knowledge,  not more then 5% of the voting stock,  or of all the stock, is owned
or  controlled  by citizens of  countries  that deny to United  States  citizens
privileges to own stock in  corporations  holding oil and gas leases  similar to
the  privileges  of  non-United  States  citizens  to own stock in  corporations
holding an interest in federal leases, and, in each case, whose interest, direct
or  indirect,  in federal oil and gas leases,  applications,  offers and options
therefor does not exceed 246,000 acres in the same state,  of which no more than
200,000 acres are under option,  nor does it exceed 300,000 acres in each of the
northern and southern leasing districts of Alaska, of which no more than 200,000
acres are held under option in each of such districts;  and (b) any person other
than a person who  either  (i) sells  petroleum  products,  directly  or through
"related" persons,  through retail outlets, if gross sales of petroleum products
exceed  $5,000,000  in any calendar year or (ii) refines,  in  conjunction  with
"related"  persons,  more than  50,000  barrels of crude oil on any day during a
calendar  year. A "related"  person  includes any person in which a person has a
significant  ownership  interest (5% or more),  or which has such an interest in
the  person,  or in which a third  person  having such an interest in the person
also has an interest.

       "Fiscal Year" shall mean the calendar year.

       "General and  Administrative  Costs" shall mean all customary and routine
legal,  accounting,  data  processing,  depreciation  (other  than  depreciation
relating  to real  property),  geological,  engineering,  travel,  office  rent,
telephone, secretarial, employee compensation and benefits, and other items of a
general and administrative nature, whether like or unlike the foregoing, and any
other  incidental  expenses  reasonably  necessary to the conduct of the Limited
Partnership's  business,  and generated by the General  Partner or any Affiliate
(including the Depositary)  other than an Affiliated  Program computed on a cost
basis,  determined by the General Partner in accordance with generally  accepted
accounting  principles and subject to review by an independent public accountant
or  certified  public  accountant  in  connection  with the annual  audit of the
Limited Partnership and its Affiliates.  General and Administrative  Costs shall
not  include  any  Direct  Administrative  Costs  or  costs  of  the  Production
Partnership.



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       "General  Partner"  shall  mean  Geodyne  Properties,  Inc.,  a  Delaware
corporation,  acting in such  capacity,  and any  other  Person  admitted  as an
additional or substituted  General Partner pursuant to the provisions of Article
Six of this Agreement.

       "Geodyne  Properties" shall mean Geodyne  Properties,  Inc., a Delaware
corporation.

       "Hydrocarbons" shall mean crude oil, natural gas, condensate, natural gas
liquids and other liquid or gaseous hydrocarbons.

       "Incapacity" or "Incapacitated" shall mean the adjudication of bankruptcy
(except that, in the case of the General Partner,  the term  "bankruptcy"  shall
mean only being  subject to Chapter 7 of the  Federal  Bankruptcy  Reform Act of
1978),  of  interdiction,  of  incompetence,  or  of  insanity,  or  the  death,
dissolution or termination  (other than by merger or  consolidation  under which
the   surviving   entity   agrees  to  assume   all  of  the   obligations   and
responsibilities  of the  merged  or  consolidated  Person  set  forth  in  this
Agreement), as the case may be, of any Person.

       "Income"  shall mean the gross income of the Limited  Partnership  or the
Production  Partnership  (as the context may require) as determined  for Federal
income tax  purposes,  including all capital or Code Section 1231 gains (but not
losses).

       "Interest"  shall mean the entire  ownership  interest (which may, either
for a Partner's Capital Account or a Partner's Profits interest, be expressed as
a percentage) of a Partner in the Limited  Partnership  at any particular  time,
including the rights and  obligations  of such Partner under this  Agreement and
the Act.

       "Limited Partner" shall mean the Depositary.

       "Limited Partnership" shall mean the limited partnership formed hereby.

       "Limited  Partnership  Account"  shall mean the bank  account or accounts
established by the General Partner pursuant to Section 10.3 of this Agreement.

       "Limited  Partnership  Property"  shall mean all  interest,  property and
right of any type owned by the Limited Partnership.



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       "Managing  Partner"  shall mean Geodyne  Production  Company,  a Delaware
corporation, in such capacity, and any successor acting in such capacity.

       "Notification" shall mean a writing,  containing the information required
by this Agreement to be  communicated  to any Person,  hand delivered or sent by
registered or certified mail, return receipt requested, postage prepaid, to such
Person at the last  known  address  of such  Person,  the date of the  certified
receipt (or such other  evidence of receipt)  therefor  being deemed the date of
the giving of Notification;  provided,  however,  that any written communication
containing the information sent or delivered to the Person and actually received
by the Person shall constitute Notification for all purposes of this Agreement.

       "Organization  and  Offering  Costs"  shall  mean all costs and  expenses
incurred  by the General  Partner  and its  Affiliates  in  connection  with the
organization  and  activation  of the Limited  Partnership,  including,  without
limitation, the legal, printing,  accounting and other direct and indirect costs
incurred in connection with  preparing,  filing and recording of this Agreement,
the costs  incurred with respect to the  registration  for offer and sale of the
Depositary  Units  under  applicable  federal  and state  securities  laws,  the
wholesale  offering and marketing  fees and expenses of the Dealer Manager and a
subsidiary of the General Partner which is a registered broker--dealer and other
front-end fees (other than any organization and offering costs as defined in the
Production  Partnership  Agreement).  Organization  and Offering Costs shall not
include the Commissions  paid to the Dealer Manager or reallowed to the Selected
Dealers, but shall include fees and expenses (including expense  reimbursements)
paid to persons in connection with the offering of Depositary  Units and issuing
Depositary  Receipts,  including due diligence costs; and, subject to the Dealer
Manager's  control,  sales incentive items,  including but not limited to travel
bonuses,  and awards for account  executives  participating  in the offering and
sales  incentives and other payments  offered to  representatives  of the Dealer
Manager to promote the solicitation of subscriptions.

       "Partner" shall mean the General Partner or any Limited Partner.

       "Person" shall mean any individual,  partnership,  corporation,  trust or
other entity.



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       "Prior Limited Partnership" shall mean any limited partnership  activated
prior to the Activation of the Limited  Partnership of which depositary units or
units of limited  partnership  interest  were  offered and sold  pursuant to the
Prospectus or pursuant to the  prospectus  prepared for the  PaineWebber/Geodyne
Energy income Program I.

       "Production  Partnership" shall mean the general partnership of which the
Limited Partnership is a general partner.

       "Production  Partnership  Agreement"  shall mean the agreement of general
partnership  under which the Production  Partnership was formed, as amended from
time to time.

       "Production Partnership Well" shall mean any well in which the Production
Partnership has an interest.

       "Producing  Property  shall  mean  any  property  (or  interest  in  such
property) with a well or wells capable of producing  Hydrocarbons  in commercial
quantities or properties unitized with such properties or properties adjacent to
such  properties  which are acquired as an incidental part of the acquisition of
such properties. The term also includes well machinery and equipment,  gathering
systems,  storage facilities or processing  installations or other equipment and
property associated with the production of Hydrocarbons. Interests in properties
may  include  Working  Interests,   production  payments,  Royalties  and  other
nonworking and nonoperating interests.

       "Profits"  and  "Losses"  shall mean the income or losses of the  Limited
Partnership  for Federal  income tax purposes  determined as of the close of the
Limited  Partnership's  Fiscal Year, as well as, when the context requires,  any
tax-exempt income and nondeductible expenses.

       "Prospectus"  shall mean the prospectus  pursuant to which the Depositary
Units were offered, including all supplements or amendments thereto delivered in
such offering, if any.

       "Proved  Reserves" shall mean those  quantities of  Hydrocarbons,  which,
upon analysis of geologic and engineering data, appear with reasonable certainty
to be recoverable in the future from known Hydrocarbon reservoirs under existing
economic  and  operating  conditions.  Proved  reserves  are  limited  to  those
quantities  of  Hydrocarbons  which can be expected,  with little  doubt,  to be
recoverable commercially at current prices and



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costs,  under  existing  regulatory  practices  and with  existing  conventional
equipment and operating  methods.  Depending  upon their status of  development,
such proved reserves shall be subdivided into the following  classifications and
have the following definitions:

             (a) "Proved  Developed  Reserves"  shall mean proved reserves which
       can be expected to be  recovered  through  existing  wells with  existing
       equipment and operating methods. This classification shall include:

                   (1) "Proved  Developed  Producing  Reserves" which are proved
             developed  reserves which are expected to be produced from existing
             wells; and

                   (2)  "Proved  Developed  Non--Producing  Reserves"  which are
             proved developed reserves which exist behind the casing of existing
             wells,  or at minor depths below the present  bottom of such wells,
             which  are  expected  to be  produced  through  these  wells in the
             predictable future, where the cost of making Hydrocarbons available
             for production should be relatively small compared to the cost of a
             new well.

             Additional   Hydrocarbons  expected  to  be  obtained  through  the
       application  of  improved  recovery  techniques  are  included as "Proved
       Developed  Reserves"  only after  testing by a pilot project or after the
       operation  of an  installed  program  has  confirmed  through  production
       responses that increased recovery will be achieved.

             (b) "Proved Undeveloped Reserves" shall mean all reserves which are
       expected  to be  recovered  from new wells on  undrilled  acreage or from
       existing  wells where a  relatively  major  expenditure  is required  for
       recompletion.  Such  reserves on  undrilled  acreage are limited to those
       drilling units offsetting  productive units which are reasonably  certain
       of  production  when  drilled;  provided  that proved  reserves for other
       undrilled  units  can  be  claimed  where  it can  be  demonstrated  with
       certainty,  based on accepted  geological,  geophysical  and  engineering
       studies and data, that there is continuity of production from an existing
       productive  formation.  No estimates for Proved Undeveloped  Reserves are
       attributable to any acreage for which improved  recovery is contemplated,
       unless the techniques to be employed have been proved effective by actual
       tests in the same area and reservoir.



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       "Remove",  "Removed"  or  "Removal"  shall mean,  with  reference  to the
removal of the General Partner, the termination of the management powers, duties
and  responsibilities  of the  General  Partner  pursuant to Section 6.5 of this
Agreement and the removal of the General Partner as a Partner.

       "Royalty" shall mean an interest,  including an overriding  royalty and a
net profits interest,  in gross production or the proceeds  therefrom which does
not  require  the  owner  thereof  to  bear  any  of  the  cost  of  production,
development, operation or maintenance.

       "Sale" shall mean any event or  transaction  that is, for federal  income
tax  purposes,  considered  a  sale,  exchange  or  abandonment  by the  Limited
Partnership of any Limited Partnership Property.

       "Selected  Dealer"  shall mean a member in good  standing of the National
Association  of Securities  Dealers,  Inc. which has been selected by the Dealer
Manager to offer and sell the Depositary Units.

       "State" shall mean the State of Oklahoma.

       "Subscription  Agreement"  shall mean the  Subscription  Agreement in the
form attached to the Prospectus as Exhibit C.

       "Subsequent  Limited  Partnership"  shall  mean any  limited  partnership
activated  after the Activation of the Limited  Partnership of which  Depositary
Units are offered and sold pursuant to the Prospectus.

       "Substituted  Limited  Partner"  shall  mean any Person  admitted  to the
Limited Partnership as a Partner pursuant to Section 7.3 or Sections 8.1 and 8.2
of this Agreement.

       "Unit  Holders"  shall mean any Person who holds  Depositary  Receipts in
accordance with Section 7.1 or Section 8.3 hereof as reflected in the records of
the Partnership and the Depositary.

       "Unit  Holders'  Subscription"  shall mean the  aggregate  dollar  amount
initially subscribed for by investors to acquire the Depositary Units.



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       "Working  Interest"  shall mean the interest  (whether  held  directly or
indirectly)  in a lease (as  defined in the  Production  Partnership  Agreement)
which is subject  to some  portion of the  expense of  production,  development,
operation or maintenance.


                                   ARTICLE TWO
                   Name, Place of Business and Office; Term


       Section 2.1.  Name, Place of Business and Office, Agent

       The   Limited   Partnership   shall   be   conducted   under   the   name
PaineWebber/Geodyne  Energy Income Limited Partnership II-E. The business of the
Limited  Partnership  may,  however,  be  conducted  under any other name deemed
necessary or desirable by the General Partner in order to comply with applicable
laws.  The office and  principal  place of business  of the Limited  Partnership
shall be c/o Geodyne  Properties,  Inc., 320 South Boston Avenue, The Mezzanine,
Tulsa,  Oklahoma  74103-3708.  The agent for  service of process on the  Limited
Partnership  shall be Geodyne  Properties,  Inc., 320 South Boston  Avenue,  The
Mezzanine,  Tulsa,  Oklahoma  74103-3708.  The  General  Partner  may change the
principal  place of business and the  location of such office and may  establish
such  additional  offices as they deem  advisable  from time to time;  provided,
however,  that in the event  the  principal  place of  business  of the  Limited
Partnership  shall be changed,  the General  Partner shall provide  Notification
thereof to the Unit  Holders.  The General  Partner  shall not be  obligated  to
provide a copy of the  Certificate  of  Limited  Partnership  as filed  with the
Oklahoma Secretary of State to the Limited Partner or Unit Holders.

       Section 2.2.  Purpose

       The business and purpose of the Limited  Partnership shall be to become a
general partner in the Production  Partnership.  Such business and purpose shall
include the doing of any and all things incident thereto or connected therewith,
including the carrying on of the business of the  Production  Partnership in the
event of its termination if it is determined by the General Partner to be in the
best interests of the Unit Holders.  The Limited Partnership shall not engage in
any other business or activity.




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       Section 2.3  Term

       The Limited Partnership shall continue in force and effect until December
31, 2001, provided that the General Partner shall extend the term of the Limited
Partnership  for up to five  periods  of two years  each in the  event  that the
Production  Partnership's term has been so extended,  or until dissolution prior
thereto pursuant to the provisions hereof.

                                  ARTICLE THREE
                          Partners and Capital Section

3.1.  General Partner

       The name, address and Capital Contribution of the General Partner are set
forth in Schedule A attached hereto and are incorporated herein.


       Section 3.2.  Limited Partner

       A. The name,  address and Capital  Contribution  of the  Depositary  as
Limited  Partner  are set  forth in  Schedule  A hereto  and are  incorporated
herein.

       B.  Neither the  Depositary  nor any Unit  Holder  shall be required to
make any additional capital contribution to the Limited Partnership.

       C. The Depositary shall engage in no business activity and shall incur no
liabilities  other than acting as Depositary for the Limited  Partnership or any
other limited  partnership in which depositary  units evidencing  assignments of
limited  partnership  interests are offered by the  Prospectus.  The  Depositary
shall not amend its Certificate of  Incorporation  or By--laws without the prior
Consent of the Limited Partnership.

       Section 3.3.  Certain Returns of Capital

       Any portion of the capital contribution of the Limited Partnership to the
Production  Partnership which is distributed to the Limited Partnership pursuant
to Section 3.4 of the  Production  Partnership  Agreement  shall be  distributed
promptly to the Unit Holders in proportion to the Depositary  Units held by them
as a return of part of their  Subscription.  In  addition,  the General  Partner
shall contribute cash to the Limited



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<PAGE>



Partnership  (with respect to which its Capital  Account will be credited) in an
amount equal to the amounts paid to the General  Partner or its Affiliates  from
the Unit Holders'  Subscriptions  in respect of Commissions and Organization and
Offering  Costs  attributable  (on a  proportionate  basis) to the amount of the
unexpended Unit Holders' Subscriptions so refunded, which cash shall be refunded
pro  rata to the  Limited  Partners  (except  that  cash  representing  refunded
Commissions shall be distributed to each Unit Holder in proportion to the manner
in which Commissions  attributable to its  subscriptions  were payable) together
with the unexpended Unit Holders' Subscriptions.

       Section 3.4.  Limited Partnership Capital

       A. No Partner shall be paid interest on any Capital  Contribution  to the
Limited  Partnership or on such Partner's Capital Account,  notwithstanding  any
disproportion therein as between Partners.

       B.  Except  as  provided  in  Sections  3.2,  3.3,  6.1  and  9.2 of this
Agreement, no Partner or Unit Holder shall have the right to withdraw or receive
any return of the Capital Contribution.  Under circumstances  involving a return
of any  Capital  Contribution,  no  Limited  Partner or Unit  Holder  shall have
priority  over any other  Limited  Partner  nor shall any Partner or Unit Holder
have the right to receive any property other than cash,  except as may otherwise
be provided in Sections 6.4 and 9.2A of this Agreement.

       Section 3.5.  Application of Capital Contributions

       A. The General Partner shall deposit in the Limited  Partnership  Account
the Capital  Contributions  attributable  to the Limited Partner and shall apply
such Capital  Contributions to (i) pay to the General Partner an amount equal to
3.5%  of the  Unit  Holders'  Subscriptions  in  consideration  of  the  General
Partner's  payment of  Organization  and Offering Costs,  (ii) pay  Commissions,
(iii) establish a reasonable  reserve for working  capital,  and (iv) contribute
the balance of the Partners' Capital Contributions to the Production Partnership
in exchange for the Limited Partnership's interest therein.

       C. The  Limited  Partnership  shall not incur any  borrowings;  provided,
however,  that  borrowings  may be  incurred  on its  behalf  by the  Production
Partnership to pay costs of the Production  Partnership allocable to the Limited
Partnership.



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<PAGE>




       Section 3.6.  Liability of Partners and Unit Holders

       A.  Except as provided in the Act,  neither the  Depositary  nor the Unit
Holders  shall be  personally  liable for any debts,  liabilities,  contracts or
obligations  of the Limited  Partnership.  To the extent  that any  distribution
pursuant  to  Sections  5.1 or 9.2 is deemed to  constitute  a return of capital
under the Act, the General  Partner  shall not seek to recover any  distribution
unless the General Partner has applied all other available  Limited  Partnership
assets  to the  payment  of  liabilities  of the  Limited  Partnership  and  the
liabilities of the Limited  Partnership,  other than to Partners,  have not been
fully paid, satisfied,  assumed or discharged.  In no event shall the Depositary
or any  Unit  Holder  be  obligated  to make  any  contribution  to the  Limited
Partnership for any purpose  whatsoever other than Capital  Contributions of the
Depositary representing the proceeds of the offering of Depositary Units.

       B. Geodyne  Properties and any General Partner  subsequently  admitted to
the Limited  Partnership  agrees that it shall remain  generally  liable for any
obligation or recourse liability of the Limited Partnership  incurred during the
period  in  which  it is a  General  Partner  and  to  the  extent  the  Limited
Partnership has incurred personal liability.

                                  ARTICLE FOUR
                                   Management

       Section 4.1.   Management and Control of the Limited Partnership

       A. The General Partner,  within the authority  granted to it under and in
accordance  with  the  provisions  of this  Agreement,  shall  have the full and
exclusive  right to manage and control the  business  and affairs of the Limited
Partnership  and to make all  decisions  regarding  the  business of the Limited
Partnership  and shall  have all of the  rights,  powers  and  obligations  of a
general partner of a limited partnership under the laws of the State.

       B. Neither the Depositary or any Unit Holder,  as such, shall participate
in the management of or have any control over the Limited Partnership's business
nor  shall  the  Depositary  or any  Unit  Holder,  as such,  have the  power to
represent,  act  for,  sign  for or bind  the  General  Partner  or the  Limited
Partnership.  The Depositary and the Unit Holders hereby consent to the exercise
by the General Partner of the powers conferred on it by this Agreement.



                                      -13-
<PAGE>




       Section 4.2.  Powers of the General Partner

       A. In addition to any other rights and powers  which the General  Partner
may possess under this Agreement and the Act, the General Partner shall have the
power,  except and subject to the extent  otherwise  provided or limited in this
Agreement:

             (i) to contribute  the balance  (after payment and retention of the
       amounts  set forth in Section  3.5) of all Capital  Contributions  to the
       Production  Partnership as required by the Limited Partnership's interest
       therein, and to execute the Production  Partnership  Agreement (including
       any  amendment  and  restatement   thereof)  on  behalf  of  the  Limited
       Partnership;

             (ii) if the Production Partnership is dissolved,  to enter into all
       transactions   contemplated  by  the  Production  Partnership  Agreement,
       subject   to  the   limitations   and   provisions   contained   therein,
       notwithstanding anything to the contrary contained herein;

             (iii)  to   maintain   the  books  and  records  of  the  Limited
       Partnership in accordance with the provisions of Section 10.1;

             (iv) subject to Sections 4.5D, 4.5E and 4.5F, to consent to certain
       actions on behalf of the Limited  Partnership  pursuant to the Production
       Partnership Agreement;

             (v) to engage in any kind of  activity  and  execute,  perform  and
       carry out contracts, agreements and other documents of any kind necessary
       or  incidental  to, or in  connection  with,  the  accomplishment  of the
       purposes of the Limited Partnership; and

             (vi) to perform all duties imposed by Sections 6221 through 6232 of
       the Code on the General  Partner as "tax matters  partner" of the Limited
       Partnership,  including (but not limited to) the following: (a) the power
       to conduct  all audits and other  administrative  proceedings  (including
       windfall  profits tax audits)  with  respect to Limited  Partnership  tax
       items;  (b) the  power to  extend  the  statute  of  limitations  for all
       Partners and Unit Holders with respect to Limited  Partnership tax items;
       (C) the power to file a petition with an appropriate federal court for



                                      -14-
<PAGE>


      review of a final Limited Partnership  administrative  adjustment; and (d)
      the power to enter into a settlement with the Internal  Revenue Service on
      behalf of, and binding upon,  the Depositary and those Unit Holders having
      less than a 1% interest in Profits  unless the  Depositary  or Unit Holder
      notifies the  Internal  Revenue  Service and the General  Partner that the
      General Partner may not act on its behalf.

       B. No person,  firm or corporation  dealing with the Limited  Partnership
shall be required to inquire into the  authority of the General  Partner to take
or refrain from taking any action or make or refrain  from making any  decision,
but any person so inquiring  shall be entitled to rely upon a certificate of the
General Partner as to its due authorization.


       Section 4.3.  Prohibited Transactions

       A.  Notwithstanding  any  other  provision  of  this  Agreement  to the
contrary, the following transactions are expressly prohibited:

             (i)   the  Limited  Partnership  shall  not make any loans to the
       General Partner or any Affiliate;

             (ii) except as expressly  contemplated hereby, no agent,  attorney,
       accountant or other  independent  consultant  or  contractor  who is also
       employed on a full-time  basis by the  General  Partner or any  Affiliate
       shall be compensated by the Limited Partnership for his services;

             (iii) there shall be no commingling of Limited  Partnership funds
       with funds of any other entity; and

             (iv) the Limited  Partnership shall not make any advance payment to
       the General Partner or its  Affiliates,  except where necessary to secure
       tax benefits of prepaid drilling costs.

       Section 4.4.  Other Agreements of the General Partner

       A. Anything in this  Agreement to the contrary  notwithstanding,  it is
agreed that:

             (i)   the General  Partner and its Affiliates  shall not take any
       action with respect to the assets or property of



                                      -15-
<PAGE>



      the  Limited  Partnership  which does not  benefit  primarily  the Limited
      Partnership,  including the  utilization of Limited  Partnership  funds as
      compensating  balances  for the  benefit  of the  General  Partner  or its
      Affiliates;

             (ii) neither the General  Partner nor any Affiliate shall render to
       the Limited  Partnership  any  services  nor sell or lease to the Limited
       Partnership any equipment or supplies unless:

                   (a)  the   General   Partner   or   Affiliate   is   engaged,
             independently  of  the  Limited  Partnership,  in the  business  of
             rendering  such  services or selling or leasing such  equipment and
             supplies to other Persons;

                   (b) the compensation, price or rental therefor is competitive
             with the compensation, price or rental of other Persons in the area
             engaged in the business of rendering comparable services or selling
             or leasing comparable equipment and supplies which could reasonably
             be made available to the Limited Partnership; and

                   (c) provided that, if the General Partner or Affiliate is not
             engaged in a business  within the meaning of subdivision  (a), then
             such  compensation,  price  or  rental  shall  be the  cost of such
             services, equipment or supplies to the General Partner or Affiliate
             or the  competitive  rate  which  could be  obtained  in the  area,
             whichever is less.

       Section 4.5.  Restrictions on the Authority of the General Partner

       A. The General Partner shall not have the authority to:

             (i)   do any act in  contravention  of this  Agreement  or  which
       would  make it  impossible  to carry on the  ordinary  business  of the
       Limited Partnership;

             (ii)  confess a judgment against the Limited Partnership;

             (iii) possess  Limited  Partnership  Property or assign,  pledge or
       hypothecate  rights in specific  Limited  Partnership  Property for other
       than a Limited Partnership purpose;



                                      -16-
<PAGE>




             (iv)  admit a Person as a General  Partner  or a Limited  Partner
       except as otherwise provided herein; or

             (v) perform any act which would result in loss of the  Depositary's
       status as a limited partner under the Act or the laws of the State or the
       loss of limited  liability  under the laws of any other  jurisdiction  in
       which the Limited  Partnership is doing business,  or would subject it or
       any Unit Holder to  liability  as a general  partner in any  jurisdiction
       including use of the Depositary's or any Unit Holder's name in conducting
       the business of the Limited Partnership.

       B. The  General  Partner  shall not lease,  sell,  abandon  or  otherwise
dispose of any assets of the Limited  Partnership  to the General  Partner or to
any of its Affiliates; provided, however, that if the Limited Partnership should
own any  inventory  or other  materials,  such  inventory  or  materials  may be
transferred  to the General  Partner or any of its  Affiliates at the applicable
rates set forth in the standard form of accounting procedure then recommended by
the Council of Petroleum Accountants Societies of North America.

       C.  Without  the  consent of the  Depositary,  which  shall be given upon
receipt of the Consent of Unit Holders  owning more than 50% of the  outstanding
Depositary Units, the General Partner shall not have the authority to:

             (i) lease,  sell,  or  otherwise  dispose of at any one time all or
       substantially all of the assets of the Limited  Partnership other than in
       the ordinary course of business;

             (ii)  elect to dissolve and wind up the Limited Partnership; or

             (iii) except as set forth in Article Ten,  adopt any amendment to
       this Agreement.

       D. The General Partner shall not cause the Limited Partnership to consent
to, or join in, any amendment,  or modification  of, or supplement to, or waiver
of the  terms  of,  the  Production  Partnership  Agreement  unless:  (i) in the
judgment of the General  Partner such  amendment,  modification,  supplement  or
waiver would not materially  adversely affect the Limited  Partnership's  rights
under the then  existing  Production  Partnership  Agreement or such  amendment,
modification,



                                      -17-
<PAGE>



supplement,  or waiver is in the best interests of the Unit Holders;  or (ii) if
the conditions of Section 12.3 are  satisfied,  the Consent of the Depositary is
obtained,  which shall be given if the Consent of Unit Holders  owning more than
50% of the  outstanding  Depositary  Units is  obtained.  If the  conditions  of
Section 12.3 are satisfied,  the General  Partner shall propose any amendment to
the Production  Partnership Agreement on behalf of the Limited Partnership which
is proposed by Unit Holders  owning at least 10% of the  outstanding  Depositary
Units.

       E. Unless the conditions of Section 12.3 are satisfied and the Consent of
the Depositary is obtained,  which shall be given if the Consent of Unit Holders
owning  more  than 50% of the  outstanding  Depositary  Units is  obtained,  the
General Partner shall not have the authority to consent on behalf of the Limited
Partnership to the:

             (i)   lease,  sale or other disposition at any one time of all or
       substantially all of the assets of the Production Partnership; or

             (ii)  dissolution and winding up of the Production Partnership.

       F. Unless the conditions of Section 12.3 are satisfied and the Consent of
the Depositary is obtained,  which shall be given if the Consent of Unit Holders
owning  more  than 50% of the  outstanding  Depositary  Units is  obtained,  the
General Partner shall not have the authority to cause the Limited Partnership to
(i) remove the Managing  Partner,  or (ii) appoint a successor  Managing Partner
pursuant to Section 6.2 of the Production Partnership Agreement.

       G. No creditor who makes a  nonrecourse  loan to the Limited  Partnership
may have or acquire,  at any time as a result of making the loan,  any direct or
indirect interest in the profits, capital or property of the Limited Partnership
other than as a secured creditor.




                                      -18-
<PAGE>




       Section 4.6.   Duties and Obligations of the General Partner

       The General Partner shall:

       (i) use its best  efforts to take all actions  that may be  necessary  or
appropriate for the continuation of the Limited Partnership's valid existence as
a limited  partnership or  partnership in commendam  under the laws of the State
and the laws of any other jurisdiction in which the Limited Partnership is doing
business, and for the acquisition and holding, in accordance with the provisions
of this Agreement and applicable  laws and  regulations,  of the interest of the
Limited Partnership in the Production Partnership;

       (ii) devote to the Limited  Partnership the time that it shall deem to be
necessary to conduct the Limited Partnership's  business and affairs in the best
interests of the Limited Partnership;

       (iii) be under a fiduciary  duty and obligation to conduct the affairs of
the  Limited  Partnership  in the best  interests  of the  Limited  Partnership,
including the  safekeeping and use of all Limited  Partnership  funds and assets
(whether or not in the immediate  possession or control of the General  Partner)
and the use thereof for the benefit of the Limited Partnership;

       (iv) at all times act with  integrity  and good  faith and  exercise  due
diligence  in all  activities  relating  to the  conduct of the  business of the
Limited Partnership and in resolving conflicts of interest;

       (v) use its best efforts at all times to maintain its aggregate net worth
at a level that is sufficient to meet all present and future requirements set by
statute,  Treasury  Regulations,  the Internal  Revenue Service or the courts to
ensure that the Limited  Partnership  will not fail to be classified for Federal
income tax purposes as a partnership, rather than as an association taxable as a
corporation, on account of the net worth of the General Partner;

       (vi)  prepare or cause to be prepared and shall file on or before the due
date (or any extension thereof) any Federal, state or local tax returns required
to be filed by the Limited Partnership;



                                      -19-
<PAGE>




       (vii) cause the  Limited  Partnership  to pay any taxes  payable by the
Limited Partnership;

       (viii)  use its best  efforts  to cause  the  Limited  Partnership  to be
formed,  reformed,  qualified to do business, or registered under any applicable
assumed or  fictitious  name  statute  or similar  law in any state in which the
Limited Partnership then owns property or transacts business, if such formation,
reformation,  qualification  or  registration  is  necessary or advisable in its
counsel's  opinion to protect the limited  liability of the  Depositary  and the
Unit  Holders or to permit the Limited  Partnership  lawfully to own property or
transact business;

       (ix) from time to time, prepare and file all amendments to this Agreement
and other  similar  documents  that are required by law to be filed and recorded
for any reason, in the office or offices that are required under the laws of the
State or any other  state in which the  Limited  Partnership  is then  formed or
qualified:

       (x) do all  other  acts and  things  (including  making  publications  or
periodic  filings  of this  Agreement  or  amendments  hereto  or other  similar
documents  without the necessity of mailing or delivering copies of them to each
Unit Holder)  that may now or  hereafter be deemed by the General  Partner to be
necessary,

             (a)   for  the  perfection  and  continued   maintenance  of  the
       Limited  Partnership  as a  limited  partnership  under the laws of the
       State,

             (b) to protect the limited liability of the Depositary and the Unit
       Holders under the laws of the State and other  jurisdictions in which the
       Limited Partnership is doing business, and

             (c) to cause this  Agreement,  certificates  or other  documents to
       reflect  accurately  the  agreement of the Partners and the Unit Holders,
       the identity of the  Depositary as the Limited  Partner and the amount of
       its Capital  Contribution  made by the  Depositary  on behalf of the Unit
       Holders;



                                      -20-
<PAGE>




       (xi) monitor the  activities of the Production  Partnership  and keep the
Unit Holders informed of them in the manner provided in this Agreement;

       (xii)  from  time to time  submit  to any  appropriate  state  securities
administrator all documents, papers, statistics and reports required to be filed
with or submitted to such state securities administrator; and

       (xiii)  inform  each  Unit  Holder  of all  administrative  and  judicial
proceedings  for  an  adjustment  at  the  Limited   Partnership  or  Production
Partnership  level for  partnership  tax items and  forward to each Unit  Holder
within 30 days of receipt all notices received from the Internal Revenue Service
regarding the commencement of a partnership  level audit or a final  partnership
administrative  adjustment,  and to perform all other duties imposed by Sections
6221 through 6232 of the Code on Geodyne  Properties as "tax matters partner" of
the Limited Partnership,  including (but not limited to) the following:  (a) the
power to  conduct  all audits and other  administrative  proceedings  (including
windfall profit tax audits) with respect to Limited  Partnership tax items;  (b)
the power to extend the statute of limitations  for all Partners with respect to
Limited  Partnership  tax items;  and (c) the power to file a  petition  with an
appropriate  federal  court  for  review of a final  partnership  administrative
adjustment.

       Section 4.7.  Compensation of the General Partner

       A.  Except as provided in  Articles  Four and Five,  the General  Partner
shall  not,  either in its  capacity  as General  Partner  or in its  individual
capacity, receive any salary, fees or profits from the Limited Partnership.

       B. In  consideration  of its payment of Organization  and Offering Costs,
the General Partner shall be paid by the Limited  Partnership an amount equal to
3.5% of the Unit Holders'  Subscriptions as provided in Section 3.5. The General
Partner  shall  be  reimbursed  by  the  Limited  Partnership  for  General  and
Administrative Costs and Direct Administrative Costs incurred by it on behalf of
the Limited Partnership, and such costs shall be allocated among the Partners as
set forth in Section 5.2 of this Agreement.  The aggregate amount of General and
Administrative Costs allocable to the accounts of the Unit Holders for which the
General  Partner will be reimbursed by the Limited  Partnership and the Managing
Partner by the Production



                                      -21-
<PAGE>



Partnership  will not (i) in the first 12  months  following  Activation  of the
Limited  Partnership,  exceed  an  amount  equal  to 2.5% of the  Unit  Holders'
Subscription, and (ii) in any succeeding 12 month period, exceed an amount equal
to 1% of the Unit Holders'  Subscriptions.  All General and Administrative costs
allocable  to the accounts of the Unit Holders will be paid solely out of Income
allocable to the Unit Holders.

       To  the  extent  that  Partnership   Income  is  insufficient  to  permit
reimbursement  of such General and  Administrative  Costs in the period in which
they  are  incurred  or  accrued  or  the  amounts  actually  reimbursed  by the
Partnerships  do not  exceed the  forgoing  limitations,  such  unpaid or unused
General and Administrative Costs may be carried forward or backwards and charged
against  Income or  increase  the  maximum  amount of  reimbursable  General and
Administrative Costs for any other period. The General Partner shall be paid any
excess  of  interest  income  over the costs  incurred  in  connection  with the
maintenance of the reinvestment account referred to in Section 5.l(B)(i).

       Section 4.8.  Contracts with the General Partner and Affiliates

       All services  provided to the Limited  Partnership by the General Partner
or any  Affiliate  for which it is  compensated  shall be  embodied in a written
contract   precisely   setting  forth  the  services  to  be  rendered  and  the
compensation to be paid.  Each such contract,  other than this Agreement and the
Production Partnership  Agreement,  shall contain a provision which shall permit
termination  of the contract by the Limited  Partnership  without  penalty on 30
days' prior written notice.

       Section 4.9.  Other Operations

       The  General  Partner  and its  Affiliates  shall at all times be free to
engage in all aspects of the oil, gas and natural  resources  business for their
own accounts and for the accounts of others.  Without limiting the generality of
the foregoing,  the General  Partner and its Affiliates  shall have the right to
organize and operate  other  partnerships,  joint  ventures or other oil and gas
investment  programs  similar  to the  Limited  Partnership  or  the  Production
Partnership.

       Section    4.10.   Prosecution,   Defense  and  Settlement  of  Claims;
Indemnification



                                      -22-
<PAGE>




       A. The General  Partner  shall arrange to  prosecute,  defend,  settle or
compromise actions at law or in equity at the expense of the Limited Partnership
as may  be  necessary  to  enforce  or  protect  the  interests  of the  Limited
Partnership. The General Partner shall satisfy any judgment, decree, decision or
settlement,  first, out of any insurance proceeds available therefor,  next, out
of the Limited Partnership assets and income, and, finally, out of the assets of
the General Partner.

       B. The General Partner shall have no liability to the Limited Partnership
or to any Unit Holders for any loss  suffered by the Limited  Partnership  which
arises out of any  action or  inaction  of the  General  Partner if the  General
Partner,  in good faith,  determined that such course of conduct was in the best
interests  of the  Limited  Partnership  and  such  course  of  conduct  did not
constitute  negligence or misconduct of the General Partner. The General Partner
shall be indemnified by the Limited Partnership  against any losses,  judgments,
liabilities,  expenses and amounts paid in settlement of any claims sustained by
it in connection with the Limited  Partnership,  provided that the same were not
the result of negligence or misconduct on the part of the General  Partner.  Any
indemnification  under this Section  4.10 shall be  satisfied  solely out of the
assets  and Income of the  Limited  Partnership  and no Unit  Holders or Limited
Partners will have any liability therefor.

       C.   Notwithstanding   the  above,  the  General  Partner  shall  not  be
indemnified  for  liabilities  arising under federal and state  securities  laws
unless (i) there has been a successful  adjudication on the merits of each count
involving  securities law violations and the court approves such indemnification
and the litigation  costs thereof;  or (ii) such claims have been dismissed with
prejudice  on the  merits  by a court of  competent  jurisdiction  and the court
approves such  indemnification  and the litigation  costs  thereof.  In any such
case,  the General  Partner  shall  apprise  the court of the current  published
positions, if any, of the federal and applicable state securities administrators
regarding  indemnification of program sponsors prior to obtaining court approval
of any such indemnification.

       D. The Limited Partnership shall not incur the cost of the portion of any
insurance  which  insures any party against any liability as to which such party
is herein prohibited from being indemnified.



                                      -23-
<PAGE>




       Section 4.11.  Dealer Manager

       The Dealer Manager shall have no duties,  responsibilities or obligations
to the  Limited  Partnership,  the General  Partner or any Limited  Partner as a
consequence of its right to receive  Commissions,  except to the extent provided
under the  Securities  Act of 1933,  as  amended.  The  Dealer  Manager  has not
assumed,  and will not assume,  any  responsibility  with respect to the Limited
Partnership  nor will it be  permitted  by the  General  Partner  to assume  any
duties, responsibilities or obligations regarding the management,  operations or
any of the business affairs of the Limited Partnership subsequent to the date on
which the Limited Partnership is Activated.

                                  ARTICLE FIVE
                       Distributions, Fees and Allocations

       Section 5.1.  Distributions of Limited Partnership Funds

       A. The Distributable Cash of the Limited Partnership shall be distributed
simultaneously  to the Unit  Holders for the account of the  Depositary  (either
directly  to such Unit  Holders or as they shall  direct by their  notice to the
General Partner pursuant to the  reinvestment  option set forth in Section 5.lB)
and the General Partner promptly upon receipt of cash  distributions  formic the
Production  Partnership.  Each Unit  Holder's  or  Partner's  share of each such
distribution  shall be  determined  after giving effect to the  allocations  set
forth  in  Sections  5.2  and  5.3,  except  that  (i)  any  Distributable  Cash
attributable to the receipt by the Production  Partnership of investment  income
(as defined in the Production  Partnership  Agreement) shall be distributed 100%
to the Unit Holders and, (ii) any Distributable  Cash which is attributable to a
return  pursuant to Section 3.4 shall be  distributed  entirely to those Persons
(other  than  corporate  affiliates  of Geodyne  Resources,  Inc.  or the Dealer
Manager or any  purchasers of  Depositary  Units  therefrom  with respect to the
distribution  of cash  contributed  by the  Managing  Partner to the  Production
Partnership pursuant to Section 3.4 of the Production  Partnership  Agreement or
to the Limited  Partnership  by the General  Partner  pursuant to Section 3.4 of
this  Agreement)  who are, at the time of the  distribution,  Unit Holders.  All
distributions of Distributable Cash shall reduce  dollar-for-dollar the balances
of the Partners' and Unit Holders' Capital Accounts.



                                      -24-
<PAGE>




       B.

             (i)  Prior  to  the  first  cash   distribution   by  the   Limited
       Partnership,  each Unit Holder will be given an  opportunity  to elect to
       have all or a portion of such Unit Holder's cash  distributions  (1) paid
       directly  to the  Unit  Holder  in cash,  or (2)  held in a  reinvestment
       account  established  for Unit  Holders of the Limited  Partnership,  any
       Prior  Limited  Partnerships  and  any  Subsequent  Limited  Partnership,
       pending the  reinvestment of such cash  distributions in a minimum amount
       of $100 (with  reinvestment  in excess of such minimum being permitted in
       whole increments of $100) in Depositary  Units of any Subsequent  Limited
       Partnership.  After  receipt  of  the  Prospectus  with  respect  to  any
       Subsequent  Limited  Partnership,  each Unit  Holder may revoke such Unit
       Holder's  prior  election to have such Unit Holder's  cash  distributions
       held in the  reinvestment  account  invested in  Depositary  Units of the
       Subsequent Limited Partnership. Such revocation shall be made by the Unit
       Holder's  delivery  to the  Limited  Partnership  of a written  notice of
       revocation.  On or before  30 days  prior to the  reinvestment  of a Unit
       Holder's cash  distributions  in a Subsequent  Limited  Partnership,  the
       General Partner shall provide each Unit Holder who has previously elected
       to have cash  distributions  from the Limited  Partnership  reinvested in
       Depositary Units of a Subsequent Limited Partnership, and who has $100 or
       more held in the  reinvestment  account on such Unit Holder's  behalf,  a
       form for the Unit Holder to provide the Limited  Partnership such written
       notice of revocation. The cash distributions of a Unit Holder held in the
       reinvestment  account  shall  at all  times be the  property  of the Unit
       Holder,  and the Unit Holder may withdraw such cash distributions held in
       the  reinvestment  account on such Unit Holder's behalf upon thirty days'
       prior written  notice to the Limited  Partnership.  No interest  shall be
       payable to Unit Holders on the amount of their cash distributions held in
       such reinvestment  account;  provided,  however, that the General Partner
       shall hold the Unit Holders harmless against any losses sustained therein
       and the General  Partner shall deposit into the  reinvestment  account an
       amount  equal to any loss  suffered by a Unit Holder prior to the earlier
       of the time the  Unit  Holder  withdraws  the Unit  Holder's  share or an
       investment in a Subsequent  Limited  Partnership is made on behalf of the
       Unit Holder.  Prior to  investment  in  Depositary  Units of a Subsequent
       Limited



                                      -25-
<PAGE>



      Partnership or distribution of such funds, monies held in the reinvestment
      account may be invested in  investments  permitted  under  Section 10.3 of
      this  Agreement.  Any  costs  and  interest  income  attributable  to  the
      maintenance of the reinvestment account shall be paid or credited,  as the
      case may be, to Geodyne Properties.

            (ii) Cash distributions  held in the reinvestment  account on behalf
      of a Unit Holder will be delivered to such Unit Holder,  and no investment
      in a Subsequent  Limited  Partnership  will be made on such Unit  Holder's
      behalf,  upon (1) a  decision  by the  General  Partner  not to offer,  or
      continue  the  offering  of,  Depositary  Units  of a  Subsequent  Limited
      Partnership  or (2) a  decision  by such  Unit  Holder  not to invest in a
      Subsequent  Limited  Partnership.  Subject  to the  Limited  Partnership's
      receipt of a Unit  Holder's  written  notice of  revocation  or withdrawal
      referred to in Section 5.lB(i),  amounts held in the reinvestment  account
      on  behalf  of a Unit  Holder  which are not  reinvested  in a  Subsequent
      Limited Partnership (either because such amount is less than $100 or is in
      excess of a whole  increment  of $100) shall  remain in such  reinvestment
      account.

             (iii) A Unit  Holder's  cash  distribution  will be  reinvested  in
       Depositary  Units  of  a  Subsequent   Limited   Partnership  only  if  a
       registration  statement  covering  interests  in the  Subsequent  Limited
       Partnership  is in effect under the  Securities act of 1933, the offering
       of  Depositary  Units is qualified  for sale under the  applicable  state
       securities  laws and the Unit Holder  meets the  appropriate  suitability
       standards.  The General  Partner may terminate its offering of Depositary
       Units in a Subsequent  Limited  Partnership  at any time and will have no
       obligation   to  continue  to  offer   Depositary   Units  or  to  permit
       reinvestment  of  Distributable  Cash  therein.  In the event the General
       Partner  or its  Affiliates  offer  limited  partnerships  other than the
       Subsequent Limited  Partnerships and provide Unit holders the opportunity
       to  reinvest  cash  distributions  from the Limited  Partnership  in such
       Depositary  Units of limited  partnerships,  the terms and  conditions of
       such  reinvestment  shall be  determined  by the  General  Partner or its
       Affiliates  in its  discretion  (which  may  differ  from the  terms  and
       conditions  of  reinvestment  in Depositary  Units of Subsequent  Limited
       Partnerships provided herein).



                                      -26-
<PAGE>




       Section 5.2.  Allocation of Profits and Losses

       A. The  Profits  and Losses and each item of Income,  gain,  loss,  cost,
deduction  and  credit  of the  Limited  Partnership  shall  be  determined  and
allocated with respect to each Fiscal Year of the Limited Partnership as of, and
within 75 days after, the end of such Fiscal Year.

       B. Direct Administrative Costs and General and Administrative Costs shall
be allocated to, and borne by, the Partners in the same amounts and  proportions
as they  would be if such costs were  incurred  or borne by only the  Production
Partnership.

       C. Except as set forth in Section 5.2B,  Profits and Losses and each item
of Income,  gain,  loss, cost,  deduction and credit of the Limited  Partnership
shall be allocated between the Partners and credited to or charged against their
Capital Accounts in the following ratio:

       Depositary (on behalf of
       the Unit Holders as a class)       99%

       Geodyne Properties                        1%

       D. The General  Partner may not be  required to  contribute  funds to the
Limited  Partnership to pay for Limited Partnership costs allocated to it except
to the extent necessary to pay costs referred to in Section 5.2B.

       E.  Notwithstanding  anything to the  contrary  that may be  expressed or
implied in this Agreement,  the interest of the General Partner in each material
item of Partnership Income, gain, loss, deduction or credit shall be equal to at
least one  percent of each such item at all times  during the  existence  of the
Partnership. In determining the General Partner's interest in such items for the
purpose of this Section 5.2E,  Depositary Units or units of limited  partnership
interest owned by the General Partner shall not be taken into account.

       F.  Notwithstanding any other provision of this Agreement,  if, under any
provision of this  Agreement,  the Capital Account of any Partner or Unit Holder
is  adjusted  to  reflect  the  difference  between  the  basis  to the  Limited
Partnership  of  Limited  Partnership  Property  and  such  Limited  Partnership
Property's fair market value, then all items of Income, gain,



                                      -27-
<PAGE>



loss, and deduction with respect to such Limited  Partnership  Property shall be
allocated  among the  Partners  and Unit  Holders  so as to take  account of the
variation  between the basis of such Limited  Partnership  Property and its fair
market value at the time of the adjustment to such Partner's  Capital Account in
accordance  with the  requirements  of subsection  704(c) of the Code, or in the
same manner as provided under subsection 704(c) of the Code.



       G. Notwithstanding anything to the contrary stated herein,

             (i) There shall be  allocated  to the  General  Partner any item of
       loss,  deduction,  credit or allowance  that,  but for this Section 5.2G,
       would have been  allocated  to any Unit Holder that is not  obligated  to
       restore any deficit  balance in such Unit  Holder's  Capital  Account and
       would have thereupon  caused or increased a deficit  balance in such Unit
       Holder's  Capital  Account  as of the  end of the  Limited  Partnership's
       taxable  year  to  which  such  allocation  related  (after  taking  into
       consideration the provisions of Section 5.3D(v));

             (ii) Any Unit Holder that is not  obligated  to restore any deficit
       balance in such Unit Holder's Capital Account who  unexpectedly  receives
       an adjustment,  allocation or  distribution  specified in Section 5.3D(v)
       hereof  shall be  allocated  items of Income  and gain in an  amount  and
       manner  sufficient  to  eliminate  such  deficit  balance  as  quickly as
       possible; and

             (iii) In the event any  allocations of loss,  deduction,  credit or
       allowance are made to the General Partner  pursuant to clause (i) of this
       Section 5.2G,  the General  Partner shall be  subsequently  allocated all
       items of Income and gain until the aggregate  amount of such  allocations
       of  Income  and  gain  is  equal  to the  aggregate  amount  of any  such
       allocations  of loss,  deduction,  credit or  allowance  allocated to the
       General Partner pursuant to clause (i) of this Section 5.2G.

       Section 5.3.  Determinations  of Allocations  and  Distributions  Among
Unit Holders

       A.  Except as set forth in Section  5.1A,  all  Profits  and Losses and
each item of Income, gain, loss, cost, deduction or



                                      -28-
<PAGE>



credit  allocated to the Unit  Holders,  as a class,  shall be allocated to each
Unit Holder in the ratio that (i) the number of Depositary  Units held of record
by each  Unit  Holder  as of the  first  day of each  month  during  the  period
("Monthly  Record Dale") bears to (ii) the aggregate  number of Depositary Units
outstanding on each such Monthly  Record Date.  Distributions  of  Distributable
Cash will be made to Unit Holders of record on specified record dates determined
prior to periodic  distributions in the ratio which (i) the number of Depositary
Units  owned of record by each Unit Holder on such record date bears to (ii) the
aggregate  number of Depositary  Units  outstanding on such record date.  Unless
otherwise  designated by the General Partner,  the record date for distributions
of Distributable Cash will be the last day of the calendar quarter to which such
distributions are attributable. Each distribution in respect of depositary Units
shall be paid by the  Limited  Partnership  only to the  Persons  who are record
holders of  Depositary  Units as of the record date set for  distribution.  Such
payment  shall   constitute  full  payment  and   satisfaction  of  the  Limited
Partnership's  liability in respect of such payment  regardless  of any claim of
any Person who may have an interest in such payment by reason of aim  assignment
or otherwise.

       B.  The  Limited  Partnership's  share  of the  Production  Partnership's
adjusted basis in each of its Producing  Properties  (allocated  pursuant to the
Managing  Partner's  and  the  Limited  Partnership's  interests  in  Production
Partnership  capital  at the date of  acquisition  of the  respective  Producing
Properties)  shall be allocated  pursuant to Section  613A(c)(7)(D)  of the Code
among the Unit Holders and Partners in proportion to the interest of each in the
Limited Partnership capital ultimately used to acquire that property.

       C. All items of Income,  gain,  loss,  deduction and credit allowable for
Federal  income tax purposes and all  recapture of such  deductions  and credits
shall be  allocated  and charged or credited to the Partners and Unit Holders in
the same manner that the revenues,  costs or expenses  giving rise to such items
of Income, gain, loss,  deduction and credit are allocated and charged.  Federal
income tax  deductions  for cost or  percentage  depletion  with  respect to any
Producing  Property  shall be determined at the Partner or Unit Holder level and
shall be determined  in the case of percentage  depletion on the same basis that
income from the Producing Property is allocated.



                                      -29-
<PAGE>




       D. Capital  Accounts shall be established and maintained for each Partner
and Unit Holder in  accordance  with tax  accounting  principles  and with valid
regulations  issued by the U.S.  Treasury  Department under subsection 704(b) of
the Code (the "704 Regulations").  To the extent that tax accounting  principles
and the 704  Regulations may conflict,  the latter shall control.  In connection
with the establishment  and maintenance of such Capital Accounts,  the following
provisions shall apply:

             (i) Each  Partner's or Unit Holder's  Capital  Account shall be (a)
       increased  by the  amount  of cash  contributed  by or on  behalf of such
       Partner or Unit Holder, the fair market value of property  contributed by
       it or on its  behalf  to the  Limited  Partnership  (net  of  liabilities
       securing  such  contributed  property  that the  Limited  Partnership  is
       considered  to assume or take  subject to under  section 752 of the Code)
       and  allocations  to it of Income and gain  (except  to the  extent  such
       Income or gain has previously  been  reflected in its Capital  Account by
       adjustments  thereto) and (b)  decreased  by the amount of  Distributable
       Cash distributed to it, the fair market value of property  distributed to
       it  by  the  Limited  Partnership  (net  of  liabilities   securing  such
       distributed  property  that such Partner or Unit Holder is  considered to
       assume or take subject to under section 752 of the Code) and  allocations
       to it of Limited  Partnership loss,  deduction (except to the extent such
       loss or deduction has previously been reflected in its Capital Account by
       adjustments  thereto) and expenditures  described in section 705(a)(2)(B)
       of the Code.

             (ii) In the event Limited Partnership  Property is distributed to a
       Partner or Unit Holder,  then, before the Capital Account of such Partner
       or Unit Holder is  adjusted  as  required  by clause (i) of this  Section
       5.3D,  the Capital  Accounts of the Partners  and Unit  Holders  shall be
       adjusted to reflect the manner in which the unrealized Income, gain, loss
       and deduction inherent in such Limited Partnership Property (that has not
       been reflected in such Capital  Accounts  previously)  would be allocated
       among the Partners  and Unit Holders if there were a taxable  disposition
       of such  Limited  Partnership  Property  for its fair market value on the
       date of distribution.

             (iii) If, pursuant to this Agreement,  Limited Partnership Property
       is reflected on the books of the Limited Partnership at a book value that
       differs from the



                                      -30-
<PAGE>



      adjusted  tax  basis  of  such  Limited  Partnership  Property,  then  the
      Partners'  and  Unit  Holders'  Capital  Accounts  shall  be  adjusted  in
      accordance  with the 704  Regulations  for allocations to the Partners and
      Unit Holders of depreciation,  depletion,  amortization, and gain or loss,
      as computed for book  purposes,  with respect to such Limited  Partnership
      Property.

             (iv) The  Partner's  and Unit Holders'  Capital  Accounts  shall be
       reduced by a simulated  depletion  allowance  computed on each oil or gas
       property  using  either  the  cost  depletion  method  or the  percentage
       depletion method (without regard to the limitations  under the Code which
       could  apply  to less  than  all  Partners  or Unit  Holders);  provided,
       however,  that the  choice  between  the cost  depletion  method  and the
       percentage  depletion  method  shall be made by the General  Partner on a
       property-by-property  basis  and such  choice  shall be  binding  for all
       Limited  Partnership  taxable years during which such oil or gas property
       is held by the Limited  Partnership.  Such reductions for depletion shall
       not exceed the  aggregate  adjusted  basis  allocated to the Partners and
       Unit Holders with respect to such oil or gas  property.  Such  reductions
       for  depletion  shall be allocated  among the Partners' and Unit Holders'
       Capital  Accounts in the same  proportions  as the adjusted  basis in the
       particular property is allocated to each Partner or Unit Holder. Upon the
       taxable disposition of an oil or gas property by the Limited Partnership,
       the Limited  Partnership's  simulated gain or loss shall be determined by
       subtracting its simulated adjusted basis (aggregate adjusted tax basis of
       the Partners and Unit Holders less  simulated  depletion  allowances)  in
       such  property  from the  amount  realized  on such  disposition  and the
       Partners'  and  Unit  Holders  Capital  Accounts  shall be  increased  or
       reduced,  as the case may be, by the amount of the simulated gain or loss
       on such  disposition  in  proportion  to the  Partners' and Unit Holders'
       allocable shares of the total amount realized on such disposition.

            (v) For purposes of determining  the Capital  Account balance of any
      Partner or Unit  Holder as of the end of any Limited  Partnership  taxable
      year for purposes of Section 5.2G, such Partner's or Unit Holder's Capital
      Account shall be reduced by:



                                      -31-
<PAGE>




                   (a) Adjustments that, as of the end of such year,  reasonably
       are  expected  to be made  to such  Partner's  or Unit  Holder's  Capital
       Account  pursuant to paragraph  (b)(2)(iv)(k)  of the 704 Regulations for
       depletion  allowances  with  respect  to oil  and gas  properties  of the
       Limited Partnership, and

                   (b)  Allocations of loss and deduction that, as of the end of
       such year,  reasonably  are  expected to be made to such  Partner or Unit
       Holder  pursuant to Code  section  704(e)(2),  Code section  706(d),  and
       paragraph (b)(2)(ii) of section 1.751-1 of regulations  promulgated under
       the Code, and

                   (c)  Distributions   that,  as  of  the  end  of  such  year,
       reasonably  are  expected  to be made to such  Partner to the extent they
       exceed  offsetting  increases to such Partner's or Unit Holder's  Capital
       Account  that  reasonably  are expected to occur during (or prior to) the
       Limited Partnership taxable years in which such distributions  reasonably
       are expected to be made.

       E. The Capital  Accounts of those  Partners  and Unit  Holders  which are
charged with an expense shall be credited with any portion of that expense which
is finally determined,  judicially or administratively,  to be nondeductible for
Federal  income tax purposes,  less any  amortization  or  depreciation  thereof
incurred prior to the date that the credit is made.

                                   ARTICLE SIX
                   Withdrawal or Removal of General Partner

       Section 6.1.  Withdrawal of General Partner

       The General  Partner  (including  by  definition  any  successor  General
Partner)  shall  have the  right to retire or  withdraw,  upon 120 days  written
notice  to the Unit  Holders,  subject  to its  obligation  to pay all costs and
expenses  incurred by the Limited  Partnership  by virtue of such  retirement or
withdrawal.

       Section 6.2.  Assignment of General Partner Interest

       Subject  to  Section  12.3 and  Section  6.5B,  upon the  Consent  of the
Depositary, which shall be given if the Consent of Unit holders owning more than
50% of the  outstanding  Depositary  Units is obtained,  the General Partner may
assign or transfer its



                                      -32-
<PAGE>



General  Partner  Interest  to a person  who shall  become a  successor  General
Partner; provided, however, that no such consent shall be required in connection
with an assignment or transfer pursuant to the merger, consolidation or transfer
of all or substantially all of the assets of the General Partner.

       Section 6.3.  Removal of General Partner

       A. Subject to Section  12.3,  upon the Consent of the  Depositary,  which
shall  be given if the  Consent  of Unit  Holders  owning  more  than 50% of the
outstanding  Depositary  Units is  obtained,  the  power  shall be vested in the
Depositary to (a) remove the General Partner and (b) cause the General  Partner,
on behalf of the Limited Partnership, to Remove the Managing Partner.

       B. (i) If the Unit  Holders  elect  to  Remove  the  General  Partner  as
       permitted under this Section,  and further elect to continue the business
       of the Limited  Partnership with one or more successor  General Partners,
       the  removed  General  Partner  shall not be  Removed  until a  successor
       General Partner has been selected by the Unit Holders and admitted to the
       Limited Partnership pursuant to Section 11.2.

             (ii)  Notwithstanding  Section 3.7B, any General  Partner who shall
       withdraw or be Removed from the Limited  Partnership shall be released by
       any successor General Partner from all liability for Limited  Partnership
       debts and obligations  incurred by the Limited  Partnership  prior to the
       time of such Removal.

       6.4   Option to Purchase Interest from Former General Partner

       In the event the General Partner  withdraws or is Removed and a successor
General Partner selected, the incoming General Partner and the departing General
Partner shall, by mutual agreement,  select an independent  petroleum consultant
to value the departing  General Partner's  Interest in the Limited  Partnership.
The incoming General Partner, or the Limited Partnership,  shall have the option
to purchase at least 20% of the interests of the departing  General  Partner for
the  value  determined  by the  independent  appraisal.  The  departing  General
Partner's  Interest  in the  Limited  Partnership  shall be  transferred  to the
successor General Partner, and the successor General Partner shall assign to the
departing  General Partner a portion of Limited  Partnership  Income,  costs and
Distributable



                                      -33-
<PAGE>



Cash as and when such items are allocated or distributed, as the case may be, by
the  Limited  Partnership  equal to the  percentage  interest  of the  departing
General Partner in the Limited  Partnership  prior to Removal,  less the portion
purchased by the successor General Partner or the Limited Partnership.

       6.5   Power to Admit Successor General Partner

       A. If the General Partner has withdrawn or been Removed,  the power shall
be vested in the Unit Holders to Consent to the admission of a successor General
Partner  meeting  the  requirements  of  Section  6.5B to take the  place of the
departing  General  Partner upon the Consent of the  Depositary,  which shall be
given if the Consent of Unit  Holders  owning  more than 50% of the  outstanding
Depositary Units is obtained.

       B. If there is admitted to the Limited  Partnership  a successor  General
Partner,  such  admission  shall not become  effective  unless  (a) the  Limited
Partnership shall have received a certificate,  duly executed by or on behalf of
such  proposed  successor  General  Partner,  to  the  effect  that:  (i)  it is
experienced in performing (or employs  sufficient  personnel who are experienced
in  performing)  functions  of the type then being  performed  by the  departing
General Partner and (ii) it has a net worth  sufficient to satisfy the net worth
requirements of the Code, Treasury Regulations,  the Internal Revenue Service or
the courts applicable to a general partner in a limited  partnership in order to
ensure that the Limited  Partnership  will not fail to be classified for Federal
income tax purposes as a  partnership,  and (iii) such Person,  if other than an
individual,  has the authority to become a successor  General  Partner under the
terms of this Agreement;  and (b) the proposed  successor  General Partner shall
have (i) become a party to, and adopted all of the terms and conditions of, this
Agreement and (ii) paid all reasonable legal fees of the Limited Partnership and
filing  and  publication  costs in  connection  with such  Person's  becoming  a
successor General Partner.

       Section 6.6.  Incapacity of the General Partner

       A. In the event of the  Incapacity  of the General  Partner,  the Limited
Partnership  shall  be  dissolved.   However,  within  90  days  thereafter  the
Depositary,  upon  the  Consent  of Unit  Holders  owning  more  than 50% of the
outstanding  Depositary Units, may elect to reconstitute the Limited Partnership
prior to application of the liquidation provisions of Section 9.2.



                                      -34-
<PAGE>




       B. Upon the  Incapacity  of the  General  Partner,  the Person who is its
legal  representative  shall  have all the rights of a General  Partner  for the
purpose of settling or managing  its estate and such power as the  Incapacitated
General Partner  possessed to assign all or any part of its Interest and to join
with such assignee in satisfying  conditions precedent to such assignee becoming
a Substituted Partner.

       Section  6.7.   Termination  of  Contracts  with  General   Partner  or
Managing Partner

       Subject to and upon  fulfilling the conditions of Section 12.3, the power
shall be vested in the Unit Holders to terminate  any or all  contracts  between
the General  Partner or any Affiliate and the Limited  Partnership,  or to cause
the General  Partner,  on behalf of the Limited  Partnership,  to terminate  any
contracts  between the  Managing  Partner or any  Affiliate  and the  Production
Partnership,  and select, or cause the General Partner, on behalf of the Limited
Partnership,  to select, as the case may be, a replacement  Person therefor upon
the  Consent  of the  Depositary,  which  shall be given if the  Consent of Unit
Holders owning more than 50% of the outstanding Depositary Units is obtained.

                                  ARTICLE SEVEN
       Assignment of Limited Partner Interests to Unit Holders

       Section 7.1 Assignments of the Interests of the Depositary.

       A. Pursuant to Sections 7.1B and 13.1, the Depositary shall issue to each
Person purchasing one or more Depositary Units a Depositary  Receipt  evidencing
such Depositary Units. The Limited Partnership shall recognize as a Unit Holder,
for the  number  of  Depositary  Units for which  the  Limited  Partnership  has
received  proceeds,  each  Person  to whom the  Depositary  issues a  Depositary
Receipt as of the date  provided  in Section  13.1 or  otherwise  as the General
Partner shall determine in accordance with the provisions of this Agreement.

       B.  The  Depositary,  by the  execution  of this  Agreement,  irrevocably
assigns to the Unit Holders all of the  Depositary's  rights and interest in and
to the  Interests,  except  as  otherwise  provided  herein,  as of the  date of
Activation of the Limited  Partnership.  The rights and interest so  transferred
and assigned shall include, without limitation, the following:



                                      -35-
<PAGE>




             (i) all  rights to  receive  distributions  of  uninvested  Capital
       Contributions pursuant to Section 3.3 and the right to receive rebates of
       Commissions and Organization and Offering Costs pursuant to Section 3.3;

             (ii)  all rights to receive  distributions of Distributable  Cash
       pursuant to Section 5.1;

           (iii) all rights in respect of  allocations  of  Profits,  Losses and
       each other item of Income,  gain, loss,  deduction and credit pursuant to
       Sections 5.2 and 5.3;

             (iv) all  rights in respect of  allocations  to Capital  Accounts
       pursuant to Section 5.3;

             (v)   except as provided in Section  7.3B,  all rights to receive
       any  proceeds of  liquidation  of the Limited  Partnership  pursuant to
       Section 9.2;

             (vi) all  rights to  inspect  books and  records  and to  receive
       reports pursuant to Article Ten;

             (vii) the right to bring derivative actions pursuant to the Act (in
       the event any such action  must be brought in the name of the  Depositary
       as a Limited Partner,  the Depositary agrees to bring such action, at the
       expense of the Unit holder(s) requesting such action); and

           (viii) all rights which  limited  partners  have,  or may have in the
       future,  under this  Agreement or the Act,  except as otherwise  provided
       herein.

       C. The General Partner,  by the execution of this Agreement,  irrevocably
consents  to and  acknowledges  that (i) the  foregoing  assignment  pursuant to
Section 7.1B by the  Depositary to the Unit Holders of the  Depositary's  rights
and  interest  in the  Interests  is  effective  and (ii) the Unit  Holders  are
intended to be  third-party  beneficiaries  of all rights and  privileges of the
Depositary in respect of the Interests. The General Partner covenants and agrees
that,  in  accordance  with  the  foregoing  transfer  and  assignment,  all the
Depositary's  rights and  privileges in respect of Interests may be exercised by
the Unit Holders, including, without limitation, those listed in Section 7.lB.



                                      -36-
<PAGE>




       D. The Depositary, by execution of this Agreement, irrevocably commits to
exercise its voting rights as the Limited  Partner in accordance with directions
it receives from the Unit Holders such that it will vote a  proportionate  share
of its  Interest  as the owner,  as shown on the books of the  Depositary,  of a
corresponding Depositary Unit shall direct in writing, by proxy or otherwise.

       E. The  Depositary may transfer its Interest as the Depositary to another
Person only with the Consent of the General  Partner and Unit  Holders  owning a
majority of the outstanding Depositary Units.

       F. All  Persons  becoming  Unit  Holders  will by their  payment  for and
acceptance of Depositary Receipts agree to comply with and be bound by the terms
and  conditions of and will be entitled to all rights of Unit Holders under this
Agreement.

       G. Other than pursuant to Sections  7.lB,  7.lE and 7.2, the Depositary
shall  not  transfer,  assign,  encumber,  pledge  or  hypothecate  any of its
Interest.

       Section 7.2  Rights of Unit Holders

       A. In accordance  with the transfer and  assignment  described in Section
7.1B, it is the intention of the parties hereto that Unit Holders shall have the
same rights and obligations  that Limited Partners have under this Agreement and
under the Act. The fiduciary  duties and  obligations of the General  Partner to
the Limited  Partner under the Act and this  Agreement  shall extend to the Unit
Holders.

       B. Without  limiting the  generality of Section 7.2A,  persons who become
Limited Partners pursuant to Section 7.3 below and Unit Holders shall share pari
passu on the basis of one Limited Partner  Interest for one Depositary Unit, and
shall be  considered  as a single  class,  with respect to all rights to receive
distributions and allocations pursuant to this Agreement.

       C. Limited  Partners  (other than the  Depositary) and Unit Holders shall
vote on all  matters in respect of which they are  entitled  to vote  (either in
person, by proxy, or by written  consent),  as a single class, with each Limited
Partner  Interest  and each  Depositary  Unit  entitled  to one vote;  provided,
however, that the Depositary shall vote on behalf of and only as directed by the
Unit Holders.



                                      -37-
<PAGE>




       Section  7.3.   Conversion  of  Depositary  Units  into  Limited  Partner
Interests.  Subject to the consent of the General Partner,  which consent may be
granted or withheld in its absolute  discretion,  any Unit Holder who desires to
convert his Depositary  Units into an equal number of Limited Partner  Interests
may do so following  Activation of the Limited  Partnership by delivering to the
Depositary  all (but no less  than  all) of his  Depositary  Receipts  (properly
endorsed),  an executed  subscription  agreement and transfer application (which
are available  upon request from the General  Partner),  accompanied  by written
instructions  which  set forth an  intention  to  become a  Substituted  Limited
Partner and request admission as such to the Limited Partnership,  together with
such other instruments or documents as the General Partner or the Depositary may
deem  necessary or desirable,  including the written  acceptance and adoption by
such  Unit  holder  of the  provisions  of this  Agreement  and  the  execution,
acknowledgment  and  delivery  to the  General  Partner  of a  special  power of
attorney,  the form and  content  of which are  reasonably  satisfactory  to the
General Partner.  Such Depositary  Receipts shall be accompanied by a payment to
the Limited  Partnership  by such Unit Holder of a fee (not to exceed  $100) for
legal and  administrative  costs  and  recording  fees.  Unit  Holders  becoming
Substituted  Limited  Partners  will  be  admitted  to the  Limited  Partnership
quarterly,  or as  promptly  as  possible  after  the  commencement  of the next
calendar  quarter.  Persons who effect such  conversion will receive one Limited
Partner  Interest for each  Depositary Unit they convert and will not be able to
re-exchange  their Limited Partner  Interests for Depositary  Units. The Capital
Account of the  Depositary  shall be reduced by an amount  equal to the  Capital
Account of such  former  Unit  Holder and such  amount  will be  credited as the
former Unit  Holder's  new Capital  Account as a  Substituted  Limited  Partner.
Depositary  Units which have been converted into Limited Partner  Interests will
be cancelled and will not be reissued.  Except as specifically  stated or as the
context  otherwise  requires,  references in all but Articles Seven and Eight of
this Agreement to Unit Holders shall include Substituted Limited Partners and to
Depositary Units shall include Limited Partner Interests of Substituted  Limited
Partners.



                                      -38-
<PAGE>




                                  ARTICLE EIGHT

             Transferability of Limited Partner Interests
                              and Depositary Units

       Section  8.1.  Assignments  of  Limited  Partner  Interests  by Limited
Partners Other than the Depositary.

       A. Each  Substituted  Limited  Partner  may  assign his  Limited  Partner
Interests by a duly exercised,  written  instrument of assignment,  the terms of
which  are not in  contravention  of any of the  provisions  of this  Agreement;
provided  that no  Substituted  Limited  Partner may sell,  assign,  transfer or
exchange any Limited Partner Interests:

             (1) if such sale,  assignment,  transfer  or  exchange  would be in
       violation of any applicable  federal or state  securities laws (including
       any applicable  suitability standard and the restrictions on transfer set
       forth in Rule  260.l4l.ll  of Title 10 of the  California  Administrative
       Code) or would  cause the  Limited  Partnership  to be taxed as an entity
       other than a partnership under the Code;

             (2)  except  for  transfers  by gift or  inheritance,  intra-family
       transfers,  transfers  resulting from family  dissolutions,  transfers to
       Affiliates or transfers of such transferor's  entire remaining holding of
       Limited  Partner  Interests,  if the transferor  would hold less than ten
       (10) Limited Partner Interests.

       B. Any attempted sale, assignment,  transfer or exchange in contravention
of the provisions of this Section 8.1 shall, unless otherwise  determined by the
General Partner in its sole discretion, be void and deemed ineffectual and shall
not bind or be recognized by the Limited Partnership.

       C.  The  Limited  Partnership  need not  recognize  for any  purpose  any
assignment of the Limited  Partner  Interests of a Substituted  Limited  Partner
unless there shall have been filed with the Limited  Partnership and recorded on
the Limited  Partnership's books a duly executed and acknowledged  instrument of
assignment, and such instrument evidences the written acceptance by the assignee
of all of the terms  and  provisions  of this  Agreement,  represents  that such
assignment was made in accordance  with all applicable  laws and regulations and
in all other  respects  is  satisfactory  in form and  substance  to the General
Partner.



                                      -39-
<PAGE>




       D. An assignment  of Limited  Partner  Interests in  accordance  with the
terms of this  Agreement  shall be  recognized  by the  Limited  Partnership  as
effective  only from and after the date on which  the  Limited  Partnership  has
received the written  instrument of assignment of the Limited Partner Interests.
The Limited  Partnership  and the General Partner shall be entitled to treat the
assignor of such Limited Partner  Interests as the absolute owner thereof in all
respects,  and shall incur no liability  for any  allocation  of Profit or Loss,
distribution,  or  transmittal  of  reports  or notice  required  to be given to
Limited  Partners  hereunder  which is made in good faith to such assignor until
such time as the  written  instrument  of  assignment  has been  received by the
Limited Partnership and recorded on its books.

       Section 8.2.  Substituted Limited Partners.

       A. The  consent  of the  General  Partner  shall be  required  before the
assignee  of any Limited  Partner  Interest  shall be admitted as a  Substituted
Limited  Partner,  which  consent  may be  withheld  in the  sole  and  absolute
discretion of the General Partner.

       B. No  person  shall  have the right to  become a  Substituted  Limited
Partner in place of his assignor  unless all of the following  conditions  are
first satisfied:

             (1)  a  duly  executed  and  acknowledged   written  instrument  of
       assignment  complying  with  Section  8.1 shall  have been filed with the
       Limited  Partnership and recorded on its books,  which  instrument  shall
       specify the Limited  Partner  Interests  being assigned and set forth the
       intention of the assignor  that the  assignee  succeed to the  assignor's
       interest as a Substituted Limited Partner in his place;

             (2) the  transferor  and  his  assignee  shall  have  executed  and
       acknowledged  such other  instruments  as the  General  Partner  may deem
       necessary or desirable to effect such substitution, including the written
       acceptance  and  adoption  by the  assignee  of the  provisions  of  this
       Agreement, as the same may be amended, and his execution,  acknowledgment
       and delivery to the General  Partner of a special power of attorney,  the
       form and  content of which are  reasonably  satisfactory  to the  General
       Partner; and



                                      -40-
<PAGE>




             (3) a transfer  fee  sufficient  to cover all  reasonable  expenses
       connected with such substitution (not to exceed $50) shall have been paid
       to the Limited Partnership.

       C. By  executing or adopting  this  Agreement,  each Limited  Partner and
Substituted Limited Partner and, by the purchase of a Depositary Unit, each Unit
Holder hereby consents to the admission of Substituted  Limited  Partners by the
General Partner in accordance with the foregoing.

       Section 8.3  Transferability of Depositary Units.

       A.  Depositary  Units  may  be  transferred  only  as  provided  in  this
Agreement.  The Depositary Units shall be evidenced by Depositary Receipts which
shall be issued in registered form only and shall be transferable subject to the
same  restrictions  and  conditions  applicable to transfers of Limited  Partner
Interests set forth in Section 8.1A above.  The  Depositary  shall not recognize
transfers  of  Depositary  Units  except by a transfer  of  Depositary  Receipts
therefor.  Unit Holders who are residents of the State of  California  must meet
the  restrictions  on transfers set forth in Rule  260.14l.ll of Title 10 of the
California  Administrative  Code. Except as provided in Section 8.4, no transfer
of  Depositary  Receipts  will  be  recorded  or  otherwise  recognized  by  the
Depositary or Limited  Partnership for any purpose  whatsoever  unless and until
the transferee has certified to the Depositary  that it is an Eligible  Investor
and,  unless  the  transfer  is among  members  of the  immediate  family of the
transferor Unit Holder,  paid a transfer fee to reimburse the Depositary for all
actual,  reasonable and necessary  expenses (not to exceed $50 per  transaction)
incurred in connection with the transfer.

       B. A transferee who has accepted  delivery of a Depositary  Receipt shall
be  deemed to have  agreed  to comply  with and be bound by all of the terms and
conditions of this Agreement.

       Section 8.4  Eligible Investors

       A. If the General  Partner  determines  that a Unit Holder or Substituted
Limited  Partner is not an  Eligible  Investor  (i) then the Unit  Holder  shall
immediately  be divested of its rights to Consent on matters  submitted  to Unit
Holders and Substituted  Limited Partners (and no such Depositary Units shall be
Consented by the  Depositary  or otherwise  deemed  outstanding  for purposes of
Consents of Unit Holders under this Agreement), and



                                      -41-
<PAGE>



(ii) if such Person is subject to a higher rate of windfall profits tax than the
rate imposed  upon other Unit  Holders and  Substituted  Limited  Partners,  the
General Partner shall adjust actual cash distributions payable to such Person in
order to reflect  accurately  any varying rate of windfall  profits tax imposed.
Any amounts so  withheld  shall be deemed to have been  distributed  and the tax
shall be treated as paid by the Person.

       B. If at any time (i) the Limited Partnership, the General Partner or the
Depositary  receives an opinion of counsel to the effect that the citizenship or
other status of a Unit Holder or Substituted  Limited  Partner may result in the
forfeiture  or  cancellation  of  a  federal  Lease  or  otherwise  affects  the
eligibility  of the  Production  Partnership  to hold federal Leases or (ii) the
Limited  Partnership,  the General Partner or the Depositary is named a party in
any  judicial  or  administrative  proceeding  that  seeks the  cancellation  or
forfeiture  of any  property  in which the  Limited  Partnership  or  Production
Partnership has an interest because of the citizenship (or any other status that
subjects the  Production  Partnership  to the risk of losing its  eligibility to
acquire or hold interests in federal  Leases) of any one or more Unit Holders or
Substituted Limited Partners,  the General Partner may notify the Unit Holder or
Substituted Limited Partner and purchase the Depositary Units or Limited Partner
Interests of such Unit Holder or Substituted  Limited  Partner,  as the case may
be, at such time and for such amount as the General Partner may determine in its
sole  discretion.  Nothing in this Section 8.4 shall  prevent a Unit Holder from
transferring its Depositary Units or Limited Partner Interests prior to the date
set for such purchase by the General Partner.  At any time after it can and does
certify  that it has  become  an  Eligible  Investor  a Unit  Holder  may,  upon
application  to  the  General  Partner,  retain  all of  the  economic  benefits
attributable to its Depositary Units or Limited Partner  Interests,  as the case
may be.

                                  ARTICLE NINE
                   Dissolution, Liquidation and Termination
                           of the Limited Partnership

       Section 9.1.  Events Causing Dissolution

       A. The Limited  Partnership  shall be dissolved  upon the  happening of
any of the following events:

             (i)  the  expiration  of  its  term,   without  any  continuation
       thereof as set forth in Section 2.3;



                                      -42-
<PAGE>




             (ii) the  Incapacity  of the  General  Partner.  However,  within
       ninety days thereafter the Unit Holders may elect to  reconstitute  the
       Limited Partnership prior to application of the liquidation  provisions
       of Section 9.2;

             (iii)  the  Sale  or  other  disposition  at  one  time  of  all or
       substantially  all of the assets of the Limited  Partnership  existing at
       the time of such Sale (including the liquidation or redemption other than
       in kind of its interest in the Production Partnership);

             (iv) the  election to dissolve the Limited  Partnership  (a) by the
       General  Partner  (which  election  shall be Consented to by Unit Holders
       owning more than 50% of the outstanding  Depositary Units), or (b) by the
       Consent  of  Unit  Holders  owning  more  than  50%  of  the  outstanding
       Depositary Units;

             (v) ninety days after the Removal or withdrawal of the sole General
       Partner (unless a successor is elected pursuant to Section 6.5);

             (vi)  the   dissolution   and   liquidation   of  the  Production
       Partnership  without  the  continuance  of its  business by the Limited
       Partnership pursuant to Section 4.2A(ii); or

             (vii) the happening of any other event causing the  dissolution  of
       the  Limited  Partnership  under the laws of the State,  except  that the
       Incapacity  of the  Depositary  or any Unit Holder shall not dissolve the
       Limited  Partnership  and the seizure of the  Interest of the  Depositary
       shall not dissolve the Limited Partnership.

       B. Dissolution of the Limited  Partnership  shall be effective on the day
on which  the event  occurs  giving  rise to the  dissolution,  but the  Limited
Partnership  shall not terminate until the General Partner has recorded a notice
of  dissolution of the Limited  Partnership  with the office of the Secretary of
State of the State and shall have  complied with the laws of the other states in
which its does  business  and the assets of the  Limited  Partnership  have been
distributed as provided in Section 9.2.

       C. Nothing contained in this Agreement shall impair,  restrict or limit
the  rights  and  powers  of the  Partners  under the laws of the State or any
other jurisdiction in which the



                                      -43-
<PAGE>



Limited Partnership is doing business to reform and reconstitute themselves as a
limited  partnership  following  dissolution of the Limited  Partnership  either
under  provisions  identical  to those  set  forth  herein  or under  any  other
provisions.

       D. If the Limited  Partnership  is  dissolved as a result of an event set
forth in Sections  9.lA(ii),  (v) or (vi), Unit Holders owning a majority of the
outstanding  Depositary  Units may  appoint  an interim  manager of the  Limited
Partnership,  who shall have and may exercise only the rights, powers and duties
of a general partner necessary to preserve Limited Partnership assets, until (a)
a successor  General Partner is elected  pursuant to Section 6.5, if the Limited
Partnership  is  reconstituted,  or (b) the Limited  Partnership  is  liquidated
pursuant to Section  9.2. The interim  manager  shall not be liable as a general
partner  to the  Depositary  or Unit  Holders  and shall,  while  acting in such
capacity,  be  entitled to the same  indemnification  rights as are set forth in
Section 4.10.

       Section 9.2.  Liquidation

       A. Upon dissolution of the Limited Partnership,  its liabilities shall be
paid in the order provided  herein.  The General  Partner shall sell the Limited
Partnership's  property so that such disposition is in the best interests of the
Unit  Holders,  and  shall  execute  all  amendments   terminating  the  Limited
Partnership. In connection with any such Sale, the General Partner shall attempt
to obtain the best prices for such  property.  Pending  such Sales,  the General
Partner  shall have the right to continue to operate and  otherwise to deal with
Limited Partnership  property. In the event the Limited Partnership is dissolved
on account of the  Incapacity  or Removal of the  General  Partner,  the Limited
Partnership  shall elect, in accordance with the provisions of Article Twelve, a
person (the "Liquidating  Agent") to perform the function of the General Partner
in liquidating the assets of the Limited Partnership and winding up its affairs,
and  shall  pay to such  Liquidating  Agent  its  reasonable  fees and  expenses
incurred in  connection  therewith.  Gain or loss  realized on the Sale or other
disposition of the Limited Partnership's assets will be credited to (in the case
of gain)  or  charged  against  (in the case of  loss)  each  Partner's  or Unit
Holder's  Capital Account to the extent allocable to such Partner or Unit Holder
under  Sections 5.2 and 5.3. Any  liquidation of the Limited  Partnership  shall
take  place out of court and  without  application  being made  therefor  to the
Secretary of State of the State.



                                      -44-
<PAGE>




       The  Liquidating  Agent shall agree not to resign at any time  without 15
days'  prior  written  notice and (if other  than the  General  Partner)  may be
removed at any time,  with or without  cause,  by notice of removal  approved by
Unit  Holders  owning a  majority  of the  outstanding  Depositary  Units.  Upon
dissolution,  removal,  or resignation of the Liquidating Agent, a successor and
substitute  Liquidating Agent (who shall have and succeed to all rights,  powers
and duties of the original  Liquidating Agent) shall, within 30 days thereafter,
be selected by Unit  Holders  owning a majority  of the  outstanding  Depositary
Units. The right to appoint a successor or substitute  Liquidating  Agent in the
manner  provided  herein shall be recurring  and  continuing  for so long as the
functions and services of the Liquidating Agent are authorized to continue under
the provisions hereof, and every reference herein to the Liquidating Agent shall
be deemed  to refer  also to any such  successor  substitute  Liquidating  Agent
appointed in the manner herein  provided.  The Liquidating  Agent shall have and
may exercise,  without  further  authorization  or Consent of any of the parties
hereto,  all of the powers conferred upon the General Partner under the terms of
this Agreement (but subject to all of the  applicable  limitations,  contractual
and  otherwise,  upon the exercise of such powers,  other than the limitation on
sales set forth in Section  4.5B) to the extent  necessary  or  desirable in the
good  faith  judgment  of the  Liquidating  Agent to carry  out the  duties  and
functions of the liquidating  Agent hereunder for and during such period of time
as shall be reasonably  required in the good faith  judgment of the  liquidating
Agent to complete the winding-up and  liquidation of the Limited  Partnership as
provided for herein.

       Notwithstanding   the   provision  of  Section  9.1  which   require  the
liquidation of the assets of the Limited  Partnership,  but subject to the order
or priorities set forth herein, if on dissolution of the Limited Partnership the
General Partner or Liquidating  Agent  determines that an immediate sale of part
or all of the Limited Partnership's assets would be impracticable or would cause
undue loss to the Unit Holders, the General Partner or Liquidating Agent may, in
its absolute  discretion,  defer for a reasonable  time the  liquidation  of any
assets except those necessary to satisfy  liabilities of the Limited Partnership
(other than those to Partners).

       B. In settling  accounts after  dissolution,  the assets of the Limited
Partnership  shall  be paid out in the  following  order:  (i) to third  party
creditors,  in the order or priority  as provided by law;  (ii) to the General
Partner and any Liquidating



                                      -45-
<PAGE>



Agent for any expenses of the Limited  Partnership paid by or payable to them to
the  extent  they  are  entitled  to  reimbursement  therefor  pursuant  to this
Agreement;  (iii) to all of the Unit  Holders  in the amount  equivalent  to the
amount of their  positive  Capital  Account  balances (as  adjusted  pursuant to
Section 9.2A) on the date of  distributions;  (iv) to the General Partner in the
amount  equivalent  to the amount of its positive  Capital  Account  balance (as
adjusted  pursuant  to Section  9.2A) on the date of  distribution;  and (v) the
balance, if any, shall be paid to the Partners and Unit Holders in the manner in
which Income is then being allocated.

       C. If the General  Partner has a deficit  balance in its Capital  Account
following the distribution(s)  provided for in Section 9.2B above, as determined
after taking into account all adjustments to its Capital Account for the taxable
year of the Limited  Partnership  during which such  distribution(s)  occur,  it
shall  restore the amount of such  deficit  balance to the  Limited  Partnership
within 90 days and such amount shall be  distributed  to the other  Partners and
Unit Holders in accordance with their positive Capital Account balances.

       D. Notwithstanding  anything to the contrary in this Agreement,  upon the
dissolution  and  termination  of the  Partnership,  the  General  Partner  will
contribute  to the  Partnership  the lesser of: (a) the  deficit  balance in its
capital  account;  or (b)  the  excess  of 1.01  percent  of the  total  Capital
Contribution  of the Depositary over the capital  previously  contributed by the
General Partner.

                                   ARTICLE TEN
          Books and Records; Accounting; Tax Elections; etc.

       Section 10.1.  Books and Records

       The books and records of the Limited Partnership,  including  information
relating  to the  sale by the  General  Partner  or any  Affiliates  of goods or
services to the Limited  Partnership,  and a list of the names and addresses and
Depositary Units of all Unit Holders, shall be maintained by the General Partner
at the principal  office of the Limited  Partnership  for a period of five years
following  the  close of the  Fiscal  Year to which  they  relate  and  shall be
available  for  examination  there by any  Partner  or Unit  Holder  or its duly
authorized  representatives at any and all reasonable times. Any Partner or Unit
Holder,  or its  duly  authorized  representatives,  upon  paying  the  costs of
collection, duplication and mailing, shall be entitled for any



                                      -46-
<PAGE>



proper purpose to a copy of the list of names and addresses and Depositary Units
of the Unit Holders.  The Limited  Partnership may maintain such other books and
records  and may  provide  such  financial  or other  statements  as the General
Partner in its discretion deems advisable.

       Section 10.2.  Accounting Basis for Tax and Reporting Purposes;  Fiscal
Year

       The books and records of the Limited  Partnership  for tax purposes,  for
purposes of this Agreement and for the purpose of reports to the Partners, shall
be kept on the accrual basis. The Fiscal Year of the Limited  Partnership  shall
be the calendar year to the extent permissible and the General Partner shall use
its best efforts to obtain any necessary approvals therefor.

       Section 10.3  Bank Accounts

       The  General  Partner  shall  maintain a bank  account or  accounts to be
maintained by the General Partner on behalf of the Limited  Partnership with any
bank in the United  States  having total assets in excess of  $100,000,000.  The
General Partner shall not deposit Limited  Partnership  funds in an account with
any bank in an  aggregate  amount in excess of 5% of such bank's  total  assets.
Withdrawals   shall  be  made  only  in  the  regular   course  of  the  Limited
Partnership's  business on such  signature or signatures as the General  Partner
may  determine.  All deposits and other funds not needed in the operation of the
business may be deposited in interest-bearing accounts, certificates of deposit,
money market funds (including those managed or marketed by the Dealer Manager or
its Affiliates) or invested in short term United States  Government  obligations
maturing within one year,  commercial paper of United States corporations having
the  highest  credit  rating  granted by Moody's  Investors  Services,  Inc.  or
Standard & Poors Corporation, or other similar highly liquid investments.

       Section 10.4.  Reports

       A. The General  Partner  shall close the Limited  Partnership's  books of
account  promptly at the close of each Fiscal Year and an annual  examination of
the Limited Partnership's financial statements shall be performed at the expense
of the Limited Partnership by the Accountants. The General Partner shall furnish
to the Unit  Holders  an annual  report  within 120 days after the close of each
Fiscal Year of the Limited Partnership commencing with the Fiscal Year in which



                                      -47-
<PAGE>



the Limited  Partnership  was  Activated.  If requested  by a Unit  Holder,  the
General Partner shall also furnish such Unit Holder with a report within 75 days
after the end of the first six months of the Fiscal  Year in which such  request
was made, or within 75 days after the request is made,  whichever is later. Such
report will contain at least the following information:

             (i)  Financial  statements  for the Limited  Partnership's  and the
       Production  Partnership's accounts,  including a balance sheet, statement
       of income,  statement  of changes in partners'  capital and  statement of
       changes in financial  position prepared on an accrual basis in accordance
       with generally accepted accounting principles and accompanied by a report
       of the Accountants  together with their opinion thereon,  except that the
       semi-annual financial statements need not be audited;

             (ii) A summary itemization,  by type and/or classification,  of the
       total fees and compensation,  including any overhead reimbursement,  paid
       by the Limited  Partnership  or Production  Partnership  or indirectly on
       their  behalf,  to the  General  Partner  or  Managing  Partner  and  any
       Affiliate;

             (iii)  A  description  of  each  Producing  Property   acquisition,
       including the costs therefor, in which the Production Partnership owns an
       interest,  except  succeeding  reports need contain only material changes
       (including  all  farmouts,   development   drilling,   improved  recovery
       operations and  abandonments),  if any,  regarding  Producing  Properties
       already  reported  upon.  In the case of wells  that have been  abandoned
       after production has commenced,  a statement  justifying such abandonment
       shall be included if the General Partner or an Affiliate is the operator.
       In the case of farmouts,  the statement shall include a justification  of
       the farmout,  location,  time, to whom made, and a general description of
       terms;

             (iv) A  schedule  reflecting  a list of the  wells  drilled  by the
       Production Partnership on behalf of the Limited Partnership and the costs
       thereof;

       B. Within 60 days after the end of each fiscal  quarter  each Unit Holder
will receive a "participant  statement" which summarizes his allocable  interest
in the  Limited  Partnership.  The  participant  statement  will detail the Unit
Holder's cash receipts and disbursements for the Unit Holder's Depositary Units.



                                      -48-
<PAGE>




       C. Within 120 days after the end of the Fiscal Year  following the Fiscal
Year in  which  Activation  of the  Limited  Partnership  occurs,  and  annually
thereafter,  the General Partner shall furnish to the Unit Holders a computation
as of the end of the immediately  preceding  Fiscal Year, based upon engineering
reports  prepared by one or more  qualified  independent  petroleum  engineering
firms with respect to Producing  Properties  containing Proved Reserves equal to
at least 80% of the Proved  Reserves  of the  Production  Partnership  (with the
computation as to any balance of the Production  Partnership's  Proved  Reserves
being based upon petroleum  engineering  reports prepared by the General Partner
or an Affiliate),  of the total estimated Proved Developed  Producing  Reserves,
Proved Developed  Non--Producing  Reserves and Proved Undeveloped Reserves owned
by the Production Partnership, the estimated dollar value thereof stated in then
existing prices and escalated  prices (as provided by the General  Partner).  In
addition, the computation shall include an estimate of the time required for the
extraction  of such  reserves  and the present  worth of such  reserves  and the
estimate shall contain a statement  that because of the time period  required to
extract such reserves the present value of revenues to be obtained in the future
is less than if immediately receivable.

       D.  In  addition  to the  report  described  in  Section  10.4C  of  this
Agreement,  if an event occurs to the  knowledge  of the General  Partner or its
Affiliates  leading to a reduction or an increase of such  Reserves of more than
10 percent,  excluding reduction as a result of normal production, an additional
computation  and estimate  similar to that  described in Section  10.4C shall be
sent to each Unit Holder as soon as possible.

       E. By March 15 of each year, the General Partner will furnish a report to
each Unit Holder  containing such  information as is pertinent for completion of
his respective Federal, state, and other income tax returns.

       F. The General  Partner shall file on a timely basis with the  Securities
and  Exchange  Commission  all  filings  required  to be  made  by  the  Limited
Partnership and Production  Partnership  pursuant to the Securities Act of 1933,
the Securities  Exchange Act of 1934, and the rules and regulations  promulgated
thereunder. The General Partner shall make available to any Unit Holder upon the
Unit Holder's request, copies of any report filed by or on behalf of the Limited
Partnership  or the  Production  Partnership  with the  Securities  and Exchange
Commission. The General Partner shall cause a copy of the report



                                      -49-
<PAGE>



sent to the Unit Holders under paragraphs A, C, D and E hereof to be sent to the
California Commissioner of Corporations.

       G.  The  General  Partner  agrees  to make  all  relevant  financial  and
engineering  reports  available  for  review by a Unit  Holder on request at the
offices of the Limited Partnership.

       Section 10.5.  Elections

       The  General  Partner  shall cause the  Limited  Partnership  to make all
elections required or permitted to be made by the Limited  Partnership under the
Code and not otherwise  expressly provided for in this Agreement,  in the manner
that the General Partner believes will be most advantageous to the Unit Holders,
except  that (i) the General  Partner  shall not be required to make an election
under Section 754 of the Code or  corresponding  provisions of applicable  state
income tax laws,  and (ii) the General  Partner  shall make the  election  under
Section  263(c) of the Code to expense all intangible  drilling and  development
costs in the initial Limited Partnership Federal income tax return filed for the
Fiscal Year in which such costs are incurred.




                                 ARTICLE ELEVEN
                                   Amendments

       Section 11.1.  Proposal and Adoption of Amendments Generally


       A. Notwithstanding anything to the contrary contained herein, the General
Partner  may,  without  prior  notice or consent of any Unit  Holder,  amend any
provision of this  Agreement  (including  an  amendment  to admit an  additional
General Partner or a successor General Partner in the event of the withdrawal or
Removal of the General Partner) if, in its opinion, such amendment does not have
a material adverse effect upon the Unit Holders. Amendments to this Agreement to
reflect the addition or  substitution of a Limited Partner or the admission of a
successor  General  Partner shall be made at the time and in the manner referred
to in Section 11.2. Any other amendment to this Agreement may be proposed by the
General Partner or holders of at least 10% of the outstanding  Depositary Units.
The Unit Holder or Unit Holders proposing such amendment shall submit a



                                      -50-
<PAGE>



Notification  containing (a) the text of such amendment,  (b) a statement of the
purpose of such  amendment,  and (c) an opinion of counsel  obtained by the Unit
Holder  or Unit  Holders  proposing  such  amendment  to the  effect  that  such
amendment is permitted by the Act, will not impair the limited  liability of the
Unit Holders,  and will not adversely affect the  classification  of the Limited
Partnership  as a  partnership  for  federal  income tax  purposes.  The General
Partner  shall,  within 15 days after receipt of any proposal under this Section
ll.1A,  give  Notification  to all Partners  and Unit  Holders of such  proposed
amendment,  of such  statement  of  purpose  and of  such  opinion  of  counsel,
together,  in the  case of an  amendment  proposed  by  other  Partners  or Unit
Holders,  with the views,  if any, of the General  Partner  with respect to such
proposed amendment.

       B.  Amendments to this Agreement  shall be adopted if: (i) in the case of
amendments referred to in Section 11.2, the conditions specified in Section 7.lE
shall have been  satisfactorily  completed and the Limited Partnership shall not
have been furnished with an opinion of counsel to the Limited Partnership to the
effect that such  amendment  will  adversely  affect the  classification  of the
Limited  Partnership as a partnership  for Federal income tax purposes;  (ii) in
the case of amendments referred to in Section 11.2, the conditions  specified in
Section 6.5B shall have been satisfactorily  completed;  or (iii) in the case of
all  other  amendments,  such  amendment  shall  have been  Consented  to by the
Depositary,  which  Consent will be given if the Consent of Unit Holders  owning
more than 50% of the  outstanding  Depositary  Units is  obtained  (unless  such
Consent is not required pursuant to Section 11.1A of this Agreement);  provided,
however,  that no such amendment may: (a) enlarge the obligations of any Partner
or Unit  Holder  under this  Agreement  or convert  the  Interest of any Limited
Partner into the Interest of a General  Partner or modify the limited  liability
of any  Limited  Partner  without the  Consent of such  Partner;  (b) modify the
method provided in Article Five of determining  and allocating or  distributing,
as the case may be, Profits, Losses, Distributable Cash and each item of Income,
gain,  loss,  cost,  deduction or credit  without the Consent of each Partner or
Unit Holder  adversely  affected by such  modification;  (c) amend Sections 4.9,
4.10,  6.1, 6.2, 6.3 or 6.4 without the Consent of the General  Partner;  or (d)
amend  Sections 2.3,  4.3,  4.4,  4.5, 4.6, this Article  Eleven or Section 12.3
without  the  Consent  of the  Depositary,  which  Consent  will be given if the
Consent of Unit Holders owning at least two-thirds of the outstanding Depositary
Units is obtained.



                                      -51-
<PAGE>




       C. Upon the adoption of any  amendment to this  Agreement,  the amendment
shall be  executed  by the  General  Partner  and the  Depositary  and  shall be
recorded  in the proper  records  of the State and any other  state in which the
Limited Partnership is then doing business.


       Section 11.2.  Amendments on Admission or Removal of Partners

       If this  Agreement  shall be amended to reflect the withdrawal or Removal
of the  General  Partner  and the  continuation  of the  business of the Limited
Partnership,  such  amendment  shall be signed  by the  remaining  or  successor
General Partner and by the Removed General Partner.

                                 ARTICLE TWELVE
                          Consents, Voting and Meetings

       Section 12.1.  Method of Giving Consent

       Any Consent of a Unit Holder required by this Agreement may be given by a
Unit  Holder as  follows:  (i) at a meeting,  in person,  by a written  proxy or
signed  writing  directing the manner in which it desires that its vote be cast,
which writing must be received by the General Partner prior to such meeting,  or
(ii) without a meeting,  by a signed  writing  directing  the manner in which it
desires that its vote be cast,  which writing must be received by the Depositary
prior to the date upon which the vote of Unit  Holders  are to be  counted.  Any
Partner or Unit Holder may waive notice of or  attendance  at any meeting of the
Unit  Holders and Partners and may execute a signed  written  consent.  Only the
votes of Unit  holders  of  record  on the date of  Notification,  whether  at a
meeting or otherwise,  shall be counted. The laws of the State pertaining to the
validity  and use of  corporate  proxies  shall  govern the  validity and use of
proxies given by Unit Holders.

       Section 12.2.  Meetings of Partners and Unit Holders

       The General Partner may at any time call a meeting of the Unit Holders or
for a vote,  without a meeting,  of the Unit  Holders on matters  upon which the
Unit Holders are entitled to provide  their  Consent,  and shall call for such a
meeting or vote upon receipt by the General  Partner of a request  therefor made
by Unit Holders owning at least 10% of the outstanding



                                      -52-
<PAGE>



Depositary Units as of the date of receipt of such Notification.  Within 15 days
of the receipt of the  Notification,  the General  Partner shall notify all Unit
Holders of record as of the date of the Notification as to the time and place of
the meeting,  if called, and the general nature of the business to be transacted
thereat,  or if no such meeting has been called,  of the matter or matters to be
voted upon and the date upon which the votes will be counted.  Any Unit  Holders
meeting or the date upon which such  votes,  without a meeting,  will be counted
(regardless  of whether the General  Partner has called for such meeting or vote
upon the  request of Unit  Holders or has  initiated  such  event  without  such
request) shall be not less than 30 or more than 60 days following mailing of the
Notification  thereof by the General  Partner.  All  expenses  of the  meetings,
voting and such Notification shall be borne by the Limited Partnership.

       Section 12.3.  Limitations on Requirements for Consents

       Notwithstanding anything to the contrary contained in this Agreement, the
powers of the Unit Holders set forth in Sections 4.50,  4.5E,  4.5F, 6.3A, 6.6A,
6.7  and  12.5  shall  not be  deemed  to be  granted  to the  Unit  Holders  or
exercisable  by them unless and until  counsel for the  Limited  Partnership  or
counsel  designated  by Unit  Holders  owning  at least  10% of the  outstanding
Depositary Units shall have delivered to the Depositary an opinion to the effect
that  neither the grant nor the exercise of those  powers is  prohibited  by the
Act, will impair the limited  liability of the Depositary or the Unit Holders or
will affect the  classification of the Limited  Partnership as a partnership for
Federal income tax purposes.

       Section 12.4.  Submissions to Unit Holders

       The General  Partner shall give all the Unit Holders  Notification of any
proposal or other matter  required by any provisions of this Agreement or by law
to be submitted for the  consideration  and approval of the Unit  Holders.  Such
Notification shall include any information required by the relevant provision of
the Agreement or by law.

       Section 12.5.  Acting without Concurrence of General Partner

       Except as limited by Sections  12.3 and 11.1B,  Unit Holders  owning more
than  50% of  the  outstanding  Depositary  Units,  without  the  necessity  for
concurrence by the General Partner, may cause the Depositary to vote to:



                                      -53-
<PAGE>




       (a) amend the Agreement or cause the Production  Partnership  Agreement
to be amended;

       (b)  dissolve  the  Limited   Partnership   or  cause  the   Production
Partnership to be dissolved;

       (c)  remove the  General  Partner  or cause the  Managing  Partner of the
Production  Partnership  to be removed and elect a new General  Partner or cause
the Production Partnership to elect a new Managing Partner;

       (d) approve or  disapprove  the sale of all or  substantially  all of the
assets of the Limited Partnership or cause the Production Partnership to sell or
not to sell all or substantially all of its assets; or

       (e)  cancel or amend  the terms of any  contract  for  services  with the
General  Partner or any Affiliate or cause the Production  Partnership to do so,
which shall be without penalty, provided 30 days written notice is given.


                                ARTICLE THIRTEEN
                                 The Depositary

       Section 13.1  Depositary Receipts.

       A. Within 45 days of the  Activation of the  Partnership,  the Depositary
shall execute and forward to each Unit Holder Depositary Receipts evidencing the
ownership by the Unit Holder as of the date of Activation the  Depositary  Units
for which such Unit Holder subscribed.

       B.  Pursuant  to the terms of  Section  8.3,  upon  receipt of a properly
executed  application for transfer,  the Depositary  shall within three business
days execute and forward Depositary Receipts to the respective transferees.

       C.  Depositary  Receipts may be endorsed with,  have  incorporated in the
text  thereof or be  accompanied  by such legends or  recitals,  attachments  or
changes,  not  inconsistent  with the  provisions of this  Agreement,  as may be
required to comply with any  applicable  law or regulation or with the rules and
regulations  of any securities  exchange upon which the Depositary  Units may be
listed,  or to conform with any usage with respect  thereto,  or to indicate any
special limitation or



                                      -54-
<PAGE>



restriction to which any particular  Depositary  Unit may be subject,  or as may
for any  other  reason be  required.  Each  Depositary  Receipt  shall  bear the
Depositary's  corporate  seal  and  shall  be duly  executed  on  behalf  of the
Depositary by the manual or facsimile  signature of the duly authorized officers
of the Depositary.  No Depositary Receipt shall be entitled to any benefit under
this Agreement or be valid for any purpose  unless it bears such  signatures and
corporate seal.

       C. All Depositary  Receipts  executed by the Depositary shall be numbered
consecutively.  The Unit Holder of each  numbered  Depositary  Receipt  shall be
registered on the books of the Depositary maintained pursuant to Section 13.3A.

       D. Upon  surrender  by the Unit  Holder  in person or by duly  authorized
attorney  of one or  more  Depositary  Receipts  at the  Depositary's  principal
office,  or at any other office it may designate for the purpose,  for split--up
or  combination,  the Depositary  shall,  subject to the terms and conditions of
this Agreement and the Depositary  Receipt,  execute and deliver one or more new
Depositary  Receipts in authorized  denominations  as requested,  evidencing the
same  aggregate  number  of  Depositary  Units as  evidenced  by the  Depositary
Receipt(s) surrendered.

       E. If any Depositary Receipt is mutilated, destroyed, lost or stolen, the
Depositary shall execute and deliver a Depositary Receipt in like form and tenor
in  exchange  and  substitution  for the  mutilated,  destroyed,  lost or stolen
Depositary Receipt; provided, that the Depositary may require the Unit Holder to
(i) surrender any mutilated  Depositary Receipt,  (ii) file with the Depositary,
in a form and  manner  satisfactory  to it,  proof of the  destruction,  loss or
theft, and of such Unit Holder's ownership,  of the Depositary Receipt and (iii)
furnish to the Depositary  reasonable  indemnification  (including posting of an
indemnity bond) satisfactory to the Depositary.

       F. As a condition  precedent to the  execution  and  delivery,  transfer,
split--up,  combination,  surrender,  conversion  or exchange of any  Depositary
Receipt,  the  Depositary  may  require  (i)  payment  of a sum  sufficient  for
reimbursement of any tax or other governmental charge with respect thereto, (ii)
production of proof satisfactory to it as to the identity and genuineness of any
signature or endorsement  or as to the due  authorization  of the action,  (iii)
filing of such  information  and execution of such  documents by the  transferor
and/or the  transferee  as may be required by this  Agreement or the  Depositary
Receipt or otherwise is deemed necessary or appropriate by the Depositary



                                      -55-
<PAGE>



and  (iv)  compliance  with  such  other  conditions  as  may be  imposed  under
applicable laws and regulations.  The Depositary shall be entitled to rely upon,
and  shall  not have any  liability  to the  Limited  Partnership,  the  General
Partner,  any Unit Holder or any other Person with respect to the content of any
proof  submitted  to it  pursuant  to this  Section  l3.lF,  and  shall  have no
obligation to inquire as to the truth and accuracy  thereof  (except for acts or
omissions resulting from the Depositary's gross negligence).

       G.  All  Depositary  Receipts  surrendered  to the  Depositary  shall  be
cancelled.  The Depositary  shall retain all cancelled  Depositary  Receipts and
other  instruments,  documents and records in  accordance  with the policies and
regulations  of the  Depositary,  federal  securities  laws  and the  rules  and
regulations  of any  securities  exchange  or market  upon which the  Depositary
Receipts may be listed or quoted.

       Section 13.2  Depositary as Transfer Agent and Registrar.  The Depositary
shall also be the  transfer  agent and  registrar  for the  Depositary  Receipts
unless  prohibited  by law,  regulation or any  applicable  rule of a securities
exchange or market. In its capacity as such, subject to the terms and conditions
of this  Agreement,  the  Depositary  shall  transfer  record  ownership  of the
Depositary  Units by  bookkeeping  entry on the  books  and  records  maintained
pursuant to Section l3.3A.

       Section 13.3  Duties of Depositary

       A. In performing its duties hereunder the Depositary shall:

             (i)  maintain at its  principal  office a current  list of the full
       name and last known home or  business  address of each Unit  Holder,  set
       forth in alphabetical order which list shall be available during ordinary
       business hours for examination and copying at the reasonable request, and
       at the expense, of any Unit Holder or his duly authorized representative,
       or copies of such list may be requested in writing for any proper purpose
       by any Unit Holder or his duly authorized  representative;  provided that
       the  reasonable  costs of  fulfilling  such  request,  including  copying
       expenses,  shall be paid by the  Unit  Holder  making  such  request.  In
       addition,  the Depositary  shall, as required,  furnish to the Securities
       and Exchange Commission, any report, financial statement or communication
       received from the Limited Partnership or the General Partner that is made
       generally available to Unit Holders;



                                      -56-
<PAGE>




             (ii)  keep  all  records  required  to be  kept,  for  the  periods
       specified, and shall file with the Securities and Exchange Commission all
       materials required to be so filed,  under the Securities  Exchange Act of
       1934, by virtue of its status as Depositary. A copy of any material filed
       by the Depositary with the Securities and Exchange  Commission shall also
       be provided to the Limited Partnership within two business days after its
       filing. To the extent that any such filing requires  information from the
       Limited  Partnership or the General Partner,  such  information  shall be
       furnished to the Depositary by the General Partner in sufficient quantity
       and a sufficient time in advance of the date the filing is required to be
       made to enable the Depositary to comply with such requirements; and

             (iii)  keep  books at its  corporate  office  for the  transfer  of
       Depositary Receipts. The books shall be open during normal business hours
       for inspection by the Unit Holders.  The Depositary may,  however,  close
       the  transfer  books,  at any  time or from  time to  time,  when  deemed
       expedient  by it  in  connection  with  the  performance  of  its  duties
       hereunder.

       B. Upon the request of the Limited  Partnership,  the Depositary shall as
promptly as  practicable  furnish to the Limited  Partnership  a list, as of the
date specified in such request,  of the names,  addresses and social security or
taxpayer identification numbers of all Unit Holders.

       Section 13.4 Depositary Not a Trustee, Issuer, etc. The Depositary is not
a trustee and it is intended that the Depositary, in its capacity as depositary,
shall not be deemed to be an "issuer" or  "underwriter"  of securities under the
federal  securities laws or applicable state securities laws; it being expressly
understood  and agreed  that the  Depositary,  in its  capacity  as the  limited
partner of the Limited Partnership, is acting only in a ministerial capacity.

       Section 13.5  Indemnification of the Depositary

       The Depositary  shall be  indemnified  by the Limited  Partnership to the
same extent and subject to the same  conditions and  restrictions as provided in
Section  4.10 of this  Agreement  with  respect  to the  indemnification  of the
General Partner.



                                      -57-
<PAGE>




       Section 13.6  Limitation of Expense Reimbursements

       The expenses of the  Depositary  otherwise  reimbursable  to it under the
terms of this  Agreement  and the fees payable to it hereunder  shall not exceed
the lesser of (i) an amount equal to 90% of the competitive price which would be
charged by  non--affiliated  persons  rendering  similar services in the same or
comparable  geographic location or (ii) the costs and expenses of the Depositary
incurred in rendering such services.

                                ARTICLE FOURTEEN
                            Miscellaneous Provisions

       Section 14.1.  Notification  to the Limited  Partnership or the General
Partner

       Any Notification to the Limited  Partnership or the General Partner shall
be sent to the principal office of the Limited Partnership, as set forth in this
Agreement. Except as provided herein, any Notification to a Unit Holder shall be
sent to its last known address.

       Section 14.2.  Binding Provisions

       The covenants and agreements  contained  herein shall be binding upon and
inure to the benefit of the heirs,  executors,  administrators,  successors  and
assigns of the respective parties hereto.

       Section 14.3.  Applicable Law

       This  Agreement  shall be construed and enforced in  accordance  with the
laws of the State.

       Section 14.4.  Separability of Provisions

       If for any  reason  any  provision  or  provisions  hereof  which are not
material to the purposes or business of the Limited  Partnership  or of the Unit
Holders'  Depositary  Units are  determined  to be invalid  and  contrary to any
existing or future law,  such  invalidity  shall not impair the  operation of or
affect those portions of this Agreement that are valid.

       Section    14.5.    Appointment    of   the    General    Partner    as
Attorney-in-Fact



                                      -58-
<PAGE>




       The  Depositary,   by  the  execution  of  this  Agreement,   irrevocably
constitutes  and  appoints  the General  Partner,  its true and lawful agent and
attorney--in--fact with full power and authority in its name, place and stead to
execute,  acknowledge,  deliver,  swear to,  file and record at the  appropriate
public offices such documents, instruments and conveyances that may be necessary
or  appropriate  to carry out the  provisions  or  purposes  of this  Agreement,
including  without  limitation:  (i)  all  certificates  and  other  instruments
(including counterparts of this Agreement), and any amendment thereof, including
any  amendment  substituting  a Limited  Partner  pursuant  to Section  7.lE and
Section 8.2, that the General Partner deems appropriate to form, reform, qualify
or continue the Limited Partnership (or a new partnership with substantially the
same  provisions  as the Limited  Partnership)  as a limited  partnership  (or a
partnership in which the Partners will have limited liability comparable to that
provided by the Act) in the  jurisdiction  in which the Limited  Partnership may
conduct business;  (ii) all amendments and other instruments  necessary to admit
into the Limited  Partnership  additional or  substituted  Partners  pursuant to
Section 11.2; (iii) all instruments  that the General Partner deems  appropriate
to reflect a change or  modification  of the Limited  Partnership  in accordance
with  the  terms  of  this  Agreement  (including  those  necessary  to  reflect
additional   Capital   Contributions);   and  (iv)  all  conveyances  and  other
instruments   that  the  General  Partner  deems   appropriate  to  reflect  the
dissolution and termination of the Limited Partnership.

       Section 14.6.  Entire Agreement

       This Agreement  constitutes the entire agreement among the parties.  This
Agreement  supersedes any prior agreement or understanding among the parties and
may not be modified or amended in any manner other than as set forth herein.

       Section 14.7.  Paragraph Titles

       Article and section  titles are for  descriptive  purposes only and shall
not control or alter the meaning of this Agreement as set forth in the text.

       Section 14.8.  Counterparts

       This  Agreement may be executed in several  counterparts,  all of which
together shall constitute one agreement binding on all



                                      -59-
<PAGE>



parties  hereto,  notwithstanding  that all the parties have not signed the same
counterpart  except that no  counterpart  shall be binding  unless signed by the
General Partner.

                                          GEODYNE PROPERTIES, INC., as
                                          General Partner

                                          By:   /s/ Michael E. Luttrell
                                                ------------------------
                                                Michael E. Luttrell
                                                Executive Vice President

                                          GEODYNE DEPOSITARY COMPANY,
                                          as the Limited Partner

                                          By:   /s/ Michael E. Luttrell
                                                ------------------------
                                                Michael E. Luttrell
                                                Executive Vice President



                                      -60-
<PAGE>



                                   SCHEDULE A

                                 General Partner


Name and Address                          Capital Contributions
----------------                          ---------------------

Geodyne Properties, Inc.                              $100
320 South Boston Avenue
The Mezzanine
Tulsa, Oklahoma 74103-3708


                                 Limited Partner

Name and Address                          Capital Contributions
----------------                          ---------------------

Geodyne Depositary Company                      $22,882,100.00
320 South Boston Avenue
The Mezzanine
Tulsa, Oklahoma 74103-3708



                                      -61-