<PAGE>

                                                                  EXHIBIT 3.6(b)

                                   EXHIBIT A

                             PARTNERSHIP AGREEMENT

                        AMENDED AND RESTATED AGREEMENT
                           OF LIMITED PARTNERSHIP OF
             CORAL RESERVES 1996 INSTITUTIONAL LIMITED PARTNERSHIP

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                     Page
<S>                                                                                  <C>
I.   THE PARTNERSHIP..............................................................    -1-
      1.01  Name..................................................................    -1-
      1.02  Business..............................................................    -1-
      1.03  Office................................................................    -2-
      1.04  Term..................................................................    -2-
      1.05  Agent for Service of Process..........................................    -2-

II.  DEFINITIONS..................................................................    -2-

III. PARTNERS AND CAPITAL CONTRIBUTIONS...........................................    -5-
      3.01  General Partners......................................................    -5-
      3.02  Initial Limited Partners..............................................    -5-
      3.03  Limited Partners......................................................    -5-
      3.04  Return of Capital Contributions.......................................    -6-
      3.05  Liability of Limited Partners.........................................    -6-
      3.06  Ownership of Partnership Property.....................................    -6-
      3.07  Discounted Units......................................................    -6-

IV.  PARTNERSHIP DISTRIBUTIONS AND ALLOCATIONS....................................    -6-
      4.01  Capital Account Maintenance...........................................    -6-
      4.02  Book Allocations......................................................    -8-
      4.03  Tax Allocations.......................................................   -11-
      4.04  Allocation Among Partners.............................................   -13-
      4.05  Cash Distributions....................................................   -14-
      4.06  Distribution of Net Proceeds from Sales or Other Dispositions.........   -14-

V.   DUTIES, POWERS, AND RESTRICTIONS OF THE GENERAL PARTNERS.....................   -16-
      5.01  Management............................................................   -16-
      5.02  Partnership Deposits and Disbursements................................   -20-
      5.03  Books.................................................................   -20-
      5.04  Accounting............................................................   -21-
      5.05  Other Ventures........................................................   -21-
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                                                                                  <C>
       5.06  Right to Rely on Authority of the Managing General Partner...........   -22-
       5.07  Prohibition on Management Participation by Limited Partners..........   -22-
       5.08  Liability of the General Partners; Indemnity.........................   -22-
       5.09  Removal of a General Partner.........................................   -23-

VI.   TRANSFER OF PARTNERS' INTEREST..............................................   -24-
       6.01  General Partners.....................................................   -24-
       6.02  Limited Partners.....................................................   -24-
       6.03  Section 754 Election.................................................   -25-

VII.  DISSOLUTION OF PARTNERSHIP..................................................   -26-
       7.01  Limited Partners.....................................................   -26-
       7.02  General Partners.....................................................   -26-
       7.03  Procedure............................................................   -26-
       7.04  Capital Accounts.....................................................   -27-

VIII. MISCELLANEOUS...............................................................   -27-
       8.01  Agreement in Counterparts............................................   -27-
       8.02  Notices..............................................................   -27-
       8.03  Power of Attorney....................................................   -28-
       8.04  Amendment............................................................   -28-
       8.05  Additional Documents.................................................   -28-
       8.06  Meetings.............................................................   -28-
       8.07  Validity.............................................................   -28-
       8.08  Governing Law........................................................   -28-
       8.09  Waiver...............................................................   -28-
       8.10  Federal Tax Audits...................................................   -29-
       8.11  Delivery of Certificates.............................................   -29-
             Schedule A - Limited Partners
                      B - Subscription Agreement
</TABLE>

                                      -ii-
<PAGE>

                        AMENDED AND RESTATED AGREEMENT
                           OF LIMITED PARTNERSHIP OF
             CORAL RESERVES 1996 INSTITUTIONAL LIMITED PARTNERSHIP
             -----------------------------------------------------


        AMENDED AND RESTATED AGREEMENT made as of the ____ day of
______________, 199___, by and among Coral Reserves, Inc., an Oklahoma
corporation as the Managing General Partner (the "Managing General Partner"),
Leo Woodard and John Penton, Individuals as Additional General Partners (the
"Additional General Partners") (the Managing General Partner and Additional
General Partners are collectively referred to as "General Partners"), Leo
Woodard and John Penton, Individuals as the Initial Limited Partners (the
"Initial Limited Partners"), and each of the persons (the "Limited Partners")
from time to time listed on Schedule A hereto.

                               W I T N E S E T H
                               - - - - - - - - -

        WHEREAS, the General Partners and the Initial Limited Partners have
formed a limited partnership pursuant to the provisions of the Oklahoma Revised
Uniform Limited Partnership Act (the "Partnership Act") under the name of "Coral
Reserves 1996 Institutional Limited Partnership" (the "Partnership") by filing
for record a Certificate of Limited Partnership of the Partnership with the
Oklahoma Secretary of State on November 13, 1995; and

        WHEREAS, the General Partners and the Initial Limited Partners desire to
(i) amend and restate in its entirety their agreement as set forth in the
aforesaid Certificate of Limited Partnership, (ii) effect the withdrawal of the
Initial Limited Partners and (iii) provide for the admission of the Limited
Partners as provided in this Amended and Restated Agreement of Limited
Partnership (the "Agreement");

        NOW, THEREFORE, in consideration of the foregoing premises, and the
covenants and agreements herein contained, the parties hereto do hereby certify
and swear and agree as follows:

                 I.  THE PARTNERSHIP
                     ---------------

                 1.01   Name.  The name of the Partnership shall continue to be
                        ----
Coral Reserves 1996 Institutional Limited Partnership.

                 1.02   Business.  The Partnership will carry on the business of
                        --------
acquiring, managing, improving and selling or otherwise disposing of Production
Interests, as herein defined, in oil and gas properties located in Oklahoma or
in such other states as the Managing General Partner deems appropriate and will
also engage in certain related activities.  The Partnership shall have authority
to do all things necessary or expedient to carry out its stated purposes.

                                      -1-
<PAGE>

               1.03   Office. The office of the Partnership shall be located at
                      ------
119 North Robinson, Suite 600, Oklahoma City, Oklahoma, 73102, or at such other
location in Oklahoma as the Managing General Partner may determine from time to
time upon prior written notice to the Limited Partners.

               1.04   Term. The term of the Partnership commenced on the date
                      ----
that the Partnership's Certificate and Agreement of Limited Partnership was
filed in the office of the Secretary of State of the State of Oklahoma and shall
continue until the date on which all Partnership assets are sold or otherwise
disposed. Notwithstanding the foregoing, the Partnership will terminate no
later than January 1, 2016, and may be sooner terminated in the manner provided
in Article VII hereof.

               1.05   Agent for Service of Process.  The Partnership's agent
                      ----------------------------
for service of process of the Partnership shall be Scott M. Rayburn, an
individual with a business address at 100 Park Avenue, Oklahoma City, Oklahoma,
73102, and whose residence address is 6416 Winchester Drive, Oklahoma City,
Oklahoma, 73162.

               II.    DEFINITIONS
                      -----------

               The following defined terms shall, unless the context requires
otherwise, have the meanings specified. The singular shall be deemed to refer to
the plural and the masculine gender shall be deemed to refer to the feminine and
neuter, and vice versa as the context requires.

               "Additional General Partners" means Leo Woodard and John Penton,
or any substituted or Additional General Partners admitted in accordance
herewith.

               "Affiliate" of or a person or entity "affiliated with" a
specified person or entity means a person or entity that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the person or entity specified. For the purpose of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") means the possession, directly or
indirectly, alone or in concert with others, of the power to direct or cause the
direction of the management and policies of a person or entity, whether through
the ownership of securities, by contract or otherwise.

               "Agreement" means this Amended and Restated Agreement of Limited
Partnership, as the same may be subsequently amended.

               "Capital Account" means the account described and maintained in
accordance with Paragraph 4.01.

                                      -2-
<PAGE>

               "Capital Contribution" means, with respect to each Partner, the
total amount of any money and the fair market value of any other property (other
than any debt obligations of such Partner) contributed to the Partnership by
such Partner (or the predecessor holder or holders of the Partnership interest
of such Partner) pursuant to Article III.

               "Code" refers to the Internal Revenue Code of 1986, as amended.

               "Distributable Cash" for any period means the proceeds from
Partnership operations on hand as of the end of such period, other than the
Capital Contributions, cash used to establish reserves or proceeds from
permitted borrowings or transactions described in Paragraph 4.06 hereof.

               "General Partners" means the Managing General Partner and the
Additional General Partners.

               "Gross Annual Revenues" means revenues of the Partnership from
all sources during any given year, including, without limitation, the proceeds
of the sale of Production Interests.

               "Initial Limited Partners" means Leo Woodard and John Penton.

               "Limited Partner" means each person who has executed and
delivered to the Partnership a Subscription Agreement substantially in the form
of Schedule B annexed hereto, from the date such Subscription Agreement is
accepted by the Managing General Partner, and any person thereafter becoming a
limited partner hereof and excluding any person thereafter withdrawing as a
limited partner.

               "Majority in Interest of the Limited Partners" means such of the
Limited Partners who have made (at the time of determination) more than 50% of
the Capital Contributions made by all Limited Partners.

               "Managing General Partner" means Coral Reserves, Inc., an
Oklahoma corporation, or any substituted general partner admitted in accordance
herewith.

               "Net Income" and "Net Loss" shall mean the income or loss of the
Partnership from the operation of the Partnership's business as reported for
federal income tax purposes. Net Income or Net Loss shall not include income,
gain or loss from transactions described in Paragraph 4.06 but shall include all
distributive items under Section 702 of the Code attributable to costs, if any,
incurred by the Partnership in respect of the operation and

                                      -3-
<PAGE>

management of the Partnership's business, such as taxes, interest, financing
fees and management fees, if any.

               "Partners" refers to the General Partners and the Limited
Partners.

               "Production Interests" means (i) any interests in the gross
production of oil and gas, including royalties, overriding royalties and
production payments, as such terms are commonly used in the oil and gas
business, payable in cash, free of all costs of drilling, exploration,
production, operations and marketing and all other costs incident to the
production and sale of oil and gas, whether or not limited in duration to the
duration of the lease creating such interests, and (ii) any operating interests
under an oil and gas lease, including working interests.

               "Recapture Income" means any gain recognized by the Partnership,
or, in the case of gain required by Section 613A(c)(7)(D) of the Code to be
computed separately by a Partner (but computed without regard to any adjustment
required by Section 734 or 743 of the Code) upon the disposition of any property
or asset of the Partnership that is not capital gain because such gain
represents the recapture of deductions previously taken for federal income tax
purposes with respect to such property or assets.

               "Related Acquisition Costs" means the direct expenses incurred by
the Partnership in connection with locating, investigating, evaluating and
arranging for the acquisition of Production Interests, including, without
limitation, direct expenses of the officers and employees of the Managing
General Partner reimbursable under the terms of this Agreement, the fees and
disbursements of attorneys, accountants and petroleum engineers and geologists,
data processing costs, well testing costs and other costs associated with the
acquisition of Production Interests, but not including any portion of the fees
payable hereunder to the General Partners and the Selling Agent and their
Affiliates.

               "Selling Agent" means Canaan Securities, Inc.

               "Simulated Basis" means the adjusted tax basis of any oil and gas
property (as defined in Section 614 of the Code), determined for federal income
tax purposes immediately following the acquisition of such property by the
Partnership, as adjusted to reflect (a) additions to basis and (b) the Simulated
Depletion Allowance.

               "Simulated Depletion Allowance" means a depletion allowance
computed (in accordance with federal income tax principles) for each taxable
year with respect to each oil and gas property (as defined in Section 614 of the
Code), using the cost method of depletion. For purposes of computing the
Simulated Depletion Allowance with respect to any property, the adjusted tax

                                      -4-
<PAGE>

basis of such property shall be deemed to be the Simulated Basis in such
property and in no event shall such allowance, in the aggregate, exceed such
Simulated Basis.

               "Unrealized Gain" attributable to a Partnership property means,
as of any date of determination, the excess, if any, of the fair market value of
such property as of such date of determination over the adjusted tax basis of
such property as of such date of determination.

               "Unrealized Loss" attributable to a Partnership property means,
as of any date of determination, the excess, if any, of the adjusted tax basis
of such property as of such date of determination over the fair market value of
such property as of such date of determination.

               III.  PARTNERS AND CAPITAL CONTRIBUTIONS
                     ----------------------------------

               3.01   General Partners.  Coral Reserves, Inc., shall continue
                      ----------------
to be the Managing General Partner.  Leo Woodard and John Penton shall continue
to be the Additional General Partners. Except as set forth in Paragraph 7.04(b),
the General Partners shall not be required to make any Capital Contribution to
the Partnership.  No additional or substituted general partners, except for
entities controlled by Leo Woodard or John Penton, may be admitted to the
Partnership without the consent of all other Partners.

               3.02   Initial Limited Partners.  The Initial Limited Partners
                      ------------------------
have each made a contribution to the Partnership capital in the amount of
$10.00.  The Initial Limited Partners hereby withdraw from the Partnership and
acknowledge the return of their Capital Contribution and shall have no further
obligation to or any rights as Limited Partners in respect of the Partnership.

               3.03   Limited Partners.  (a)  Limited Partnership interests
                      ----------------
have been or will be sold to the Limited Partners whose names and addresses are
set forth on Schedule A hereto.  At least one unit at a purchase price of
$500,000 per unit (each, a "Unit") have been sold and a maximum of 10 Units, in
the aggregate, may be sold by the Partnership.  The Managing General Partner
may, in its sole discretion, elect to sell up to a maximum of 20 units.

                      (b)  The Managing General Partner may, in its sole
discretion, have an initial closing ("Closing") and admit the subscribers as
Limited Partners and the Partnership may continue to offer additional Units for
sale until the earlier of (i) the date on which all of the Units have been sold
or (ii) December 3, 1996, however, the Managing General Partner may, in its sole
discretion, elect to extend the December 3, 1996, closing date.

                                      -5-
<PAGE>

                     (c) The Managing General Partner, in its sole discretion,
may elect to accept subscriptions for fractional Units. In such event, the
purchase price of such Unit shall be proportionately reduced.

               3.04  Return of Capital Contributions. Except as otherwise
                     -------------------------------
expressly provided in this Agreement, the Capital Contributions of the Partners
will be returned to them only in the manner and to the extent provided in
Paragraph 4.06(b), and no Partner shall have the right to demand redemption of
their interest, regardless of whether they withdraw from the Partnership. No
Partner will have the right to demand or receive property other than cash in
return for their Capital Contribution.

               3.05  Liability of Limited Partners.  The liability of each
                     -----------------------------
Limited Partner to the Partnership shall be limited to the amount of their
agreed Capital Contribution, and the Limited Partners shall have no further
obligation to contribute money to, or in respect of, the liabilities or the
obligations of the Partnership, nor shall the Limited Partners be personally
liable for any obligations of the Partnership, except as may be required by the
Partnership Act.

               3.06  Ownership of Partnership Property. All property acquired by
                     ---------------------------------
the Partnership shall be deemed to be owned by the Partnership, such ownership
being subject to the other terms and provisions of this Agreement, and no
Partner, individually, shall have ownership of such property. Each Partner
hereby expressly waives the right to require partition of any Partnership
property or any part thereof.

               3.07  Discounted Units. The General Partners, the Selling Agent
                     ----------------
and other registered broker-dealers participating in the sale of the Units,
certain planning firms and individual employees and Affiliates of the foregoing,
may, at the discretion of the Managing General Partner, purchase Units for which
no commissions will be charged, and the purchase price of such Units shall be
reduced by the amount of the foregone commissions.

               IV. PARTNERSHIP DISTRIBUTIONS AND ALLOCATIONS
                   -----------------------------------------

               4.01  Capital Account Maintenance. (a) A Capital Account shall be
                     ---------------------------
established for each Partner on the books of the Partnership, which account,
shall be maintained in accordance with the provisions of Treasury Regulation
Section 1.704-1(b)(2)(iv) and, to the extent not in conflict with such
Regulations, this Paragraph 4.01(a). As to a Limited Partner, the Capital
Account shall be initially equal to the capital contribution, if any, of such
Limited Partner and, as to a General Partner, shall be initially equal to zero
and thereafter, in each case, shall be increased by (i) additional cash
contributions, if any, made by the Partner to the Partnership, (ii) the fair
market value

                                      -6-
<PAGE>

of any property contributed by the Partner to the Partnership (net of any
liability considered to be assumed by the Partnership pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(c) and any liability to which such property
is subject); and (iii) the amount of any income or gain allocated to the Partner
pursuant to Paragraph 4.02 and decreased by (i) the amount of any distributions
of cash made to the Partner, (ii) the fair market value of any property
distributed by the Partnership to the Partner (net of any liability considered
to be assumed by the Partner pursuant to Treasury Regulation Section 1.701-
1(b)(2)(iv)(c) and any liability to which such property is subject), (iii) the
amount of any losses or deduction allocated to the Partner pursuant to Paragraph
4.02 and, (iv) the amount of any allocation to the Partner of expenditures of
the Partnership (as described in Section 705(a)(2)(B) of the Code).

                     (b) For purposes of computing the amount of any item of
income, gain, deduction or loss to be reflected in the Partners' Capital
Accounts, the determination, recognition and classification of any such item
shall be the same as its determination, recognition and classification for
federal income tax purposes; provided, however, that:

                         (i)    Capital Accounts shall be adjusted for Simulated
Depletion Allowance. Any Simulated Depletion Allowance deductions attributable
to a separate oil and gas property (as defined in Section 614 of the Code) shall
be computed by the Partnership using cost depletion. The Simulated Depletion
Allowance determined with respect to an oil and gas property shall, in the
aggregate, reduce the Capital Accounts of the Partners only to the extent of the
Partnership's Simulated Basis with respect to such property. The allocations of
basis, depletion deductions and amount realized from the sale or other
disposition of oil and gas properties as provided in Paragraph 4.03 required by
Section 613A(c)(7)(D) of the Code shall not affect the Capital Accounts of the
Partners.

                         (ii)   All fees and other expenses incurred by the
Partnership that can neither be deducted nor amortized under Section 709 of the
Code shall, for purposes of Capital Account maintenance, be treated as an item
of deduction and shall be allocated among the Partners pursuant to Paragraph
4.02.

                         (iii)  The computation of all items of income, gain,
loss and deduction shall be made without regard to any election under Section
754 of the Code.

                         (iv)   Immediately prior to the actual or deemed
distribution of any Partnership property (other than cash) or the distribution
of cash in redemption of a Limited Partner's interest in the Partnership, the
Capital Accounts of all Partners shall be adjusted (consistent with the
provisions hereof

                                      -7-
<PAGE>

and Section 704 of the Code) upwards or downwards to reflect any Unrealized Gain
or Unrealized Loss attributable to each Partnership property (as if such
Unrealized Gain or Unrealized Loss had been recognized upon an actual sale of
each such property, immediately prior to such distribution, and had been
allocated to the Partners at such time pursuant to Paragraph 4.02). In
determining such Unrealized Gain or Unrealized Loss, the aggregate fair market
value of Partnership properties as of any date of determination shall be
determined by the Managing General Partner using such methods of valuation as
it, in its good faith judgment, deems appropriate.

               4.02  Book Allocations. (a) For purposes of maintaining the
                     ----------------
Capital Accounts, and in determining the rights of the Partners among
themselves, each item of book income, gain, loss and deduction (computed in
accordance with Paragraph 4.01) shall be allocated (in the manner described in
Paragraph 4.02) to the Partners.

                     (b)   (i)    The Simulated Depletion Allowance shall be
allocated among the Partners in the same proportion that the Simulated Basis of
the oil and gas property (as defined in Section 614 of the Code) was allocated
among the Partners pursuant to Paragraph 4.03(b).

                           (ii)   Nonrecourse Deductions (as defined in Treasury
Regulation Section 1.704-2(b)(i)) for any fiscal year or other period shall be
allocated 99% to the Limited Partners and 1% to the Managing General Partner.

                           (iii)  Any Partner Nonrecourse Deductions (as defined
in Treasury Regulation Section 1.704-2(i)(2)) for any fiscal year or other
period shall be allocated to the Partner who bears the economic risk of loss
with respect to the Partner Nonrecourse Debt (as defined in Treasury Regulation
Section 1.704-2(b)(4)) to which such Partner Nonrecourse Deductions are
attributable in accordance with the provisions of Treasury Regulation Section
1.704-2(i).

                           (iv)   In the event that any fees paid to the General
Partners or their Affiliates pursuant to this Agreement and deducted by the
Partnership in reliance on Section 707(a) and/or 707(c) of the Code are
disallowed as deductions to the Partnership on its federal income tax return as
other than in compliance with the terms of such sections of the Code the General
Partners shall be allocated items of Partnership income, if any, in the year
such fees were paid, equal to the amount of such fees for which deductions were
thus disallowed.

                           (v)    Except as otherwise required in this Section
4.02(b), items of deduction resulting from the payment of the Organization Fees
described in Paragraph 5.01(f) hereof and expenses described in Paragraph
5.01(g) computed as a

                                      -8-
<PAGE>

percentage of each Partner's Capital Contribution shall be allocated to each
Partner who is charged with such expense and cost under such paragraphs and
Section 3.07. Depreciation deductions shall be allocated 99% to the Limited
Partners and 1% to the Managing General Partner; items of income attributable to
interest earned on capital contributions shall be allocated solely to the
Limited Partners.

                          (vi)   Except as otherwise specifically required in
Paragraph 4.02(b) (viii-xii), every item of income, gain, loss and deduction
other than those items allocated in Paragraph 4.02(b)(i-v and (vii) shall be
allocated to each Partner as follows:

        That amount of each allocable item that bears the same ratio
        to the total of such item as the Capital Contribution of a
        Limited Partner bears to the total Capital Contributions of
        all Limited Partners shall be allocated 87.5% to such
        Limited Partner and 12.5% to the General Partners (12% to the
        Managing General Partner and .25% to each of the Additional
        General Partners).

                         (vii)   Any income or gain generated from the sale or
other disposition of Production Interests or other Partnership Property in
connection with the complete liquidation of the Partnership, shall be allocated
as follows:

                                 (A)  First, an amount of income and gain equal
to the aggregate deficit balances in the Capital Account of all Partners shall
be allocated to such Partners in proportion to any such deficits to the extent
necessary to eliminate such deficits;

                                 (B)  Second, an amount of income and gain
remaining after the allocation in Paragraph 4.02(b)(vii)(A) shall be allocated
in the same proportion as a Limited Partner's Capital Contribution bears to the
total Capital Contributions of all Limited Partners 87.5% to such Limited
Partner and 12.5% to the General Partners (12% to the Managing General Partner
and .25% to each Additional General Partner).

                         (viii)  Any loss from the sale or other disposition of
a Production Interest or depreciable equipment, whether or not in liquidation,
shall be allocated with respect to Production Interests among all Partners in
proportion to their share of the Simulated Basis of such Production Interest to
the extent of their Simulated Basis and with respect to equipment, 99% to the
Limited Partners and 1% to the Managing General Partner. Thereafter, any
remaining loss will be allocated 100% to the Managing General Partner.

                                      -9-
<PAGE>

                         (ix)  Notwithstanding anything to the contrary in this
Paragraph 4.02, a Limited Partner shall not be allocated losses and deductions
to the extent that such allocation would cause or increase a deficit in the
Limited Partner's Capital Account (as adjusted for adjustments, allocations or
distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4),
(5) or (6) and additions pursuant to Treasury Regulation Section 1.704-2(g)(i)
and 2(i)(5)). To the extent any allocation of losses and deductions would cause
or increase a deficit in the Capital Account Balance of a Limited Partner, then:

                               (A)  Such amount of losses and deductions that
would cause or increase a deficit shall be allocated to the General Partners
with positive Capital Account balances in proportion to their positive Capital
Account balances until all such General Partners have been reduced to a zero
balance and any remaining losses and deductions shall be allocated to the
Managing General Partner; and

                               (B)  After any such allocation in subparagraph
(A) above, items of Partnership gross income and gain that would otherwise be
allocated to a Limited Partner for any fiscal year shall be allocated instead to
the General Partners to whom the loss or deduction was allocated under clause
(A) above (pro rata in proportion to the amount of each General Partner's
allocation of such loss or deduction), until the amount of such gross income and
gain so allocated equals the amount of loss or deduction previously so allocated
to the General Partners under clause (A) above; provided, however, that no such
allocation of gross income and gain to any General Partner shall be made under
this clause (B) if the effect of such allocation would be to cause or increase a
deficit balance in any Limited Partner's Capital Account.

                         (x)   Notwithstanding anything to the contrary in this
Paragraph 4.02, if any Limited Partner receives an adjustment, allocation or
distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4),
(5) or (6) which causes or increases a deficit Capital Account balance as
determined in (ix) above, such Limited Partner shall be allocated items of gross
income and gain in an amount and manner sufficient to eliminate such deficit
balance as quickly as possible. This Paragraph 4.02(b)(x) is intended to comply
with the qualified income offset provision contained in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently there with.

                         (xi)  Notwithstanding anything to the contrary in this
Paragraph 4.02, if there is a net decrease in partnership minimum gain (as
defined in Treasury Regulation Section 1.704-2(d)) during any Partnership fiscal
year, each Partner shall

                                     -10-
<PAGE>

be specially allocated items of Partnership gross income and gain for such year
(and, if necessary, subsequent years) in proportion to, and to the extent
provided in Treasury Regulation 1.704-2(f). This Paragraph 4.02(b)(xi) is
intended to comply with the Partner ship Minimum Gain chargeback provision
contained in Treasury Regulation Section 1.704-2(f) and shall be interpreted
consistently therewith.

                          (xii) Notwithstanding anything to the contrary in this
Paragraph 4.02, if there is a net decrease in Partner Minimum Gain (as defined
below) with respect to a Partner Nonrecourse Debt (as defined in Treasury
Regulation Section 1.704-2(b)(4)) during any Partnership fiscal year, any
Partner with a share of such Partner Minimum Gain attributable to such Partner
Nonrecourse Debt shall be specially allocated items of Partnership gross income
and gain for such year (and, if necessary, subsequent years) in proportion to,
and to the extent provided in Treasury Regulation Section 1.704-2(i)(4). This
Paragraph 4.02(b)(xii) is intended to comply with the Partner Minimum Gain
chargeback requirement in Treasury Regulation Section 1.704-2(i) and shall be
interpreted consistently therewith. Partner Minimum Gain shall mean, with
respect to each Partner Nonrecourse Debt, an amount equal to the Partnership
Minimum Gain determined in accordance with Treasury Regulation Section 1.704-
2(i).

               4.03  Tax Allocations. (a) For federal, state and local income
                     ---------------
tax purposes, except as otherwise provided in this Paragraph 4.03, each item of
income, gain, loss, deduction and credit of the Partnership shall be allocated
among the Partners in accordance with the corresponding book allocations thereof
as provided in Paragraph 4.02.

                     (b)  The deduction for depletion with respect to each
separate oil and gas property (as defined in Section 614 of the Code) shall be
computed for federal income tax purposes separately by the Partners rather than
the Partnership in accordance with Section 613A(c)(7)(D) of the Code. For
purposes of such computation, the proportionate share of the adjusted tax basis
of each such property (before taking into account any adjustments resulting from
an election made by the Partnership on behalf of such Partner under Section 614
of the Code) shall be allocated to the Partners in proportion to and to the
extent they bear the cost of the acquisition, and in the case of acquisitions
funded from Capital Contributions under Paragraph 3.03 shall be allocated 99% to
the Limited Partners and 1% to the Managing General Partner; provided, however,
that the Managing General Partner shall have complete discretion to make these
allocations in any reasonable manner that is consistent with Section 704(c). The
purpose and intent of these allocations is to effect the allocations required by
Section 704(c) of the Code thereunder, and this provision shall be construed and
interpreted to achieve that result. The Managing General Partner may amend any
provision of this Agreement if such

                                     -11-
<PAGE>

amendment is necessary to reflect allocations among the Partners consistent with
Section 704(c) of the Code. It is the intent of these provisions to comply with
Treasury Regulation 1.613A-3(e) and consistent therewith, upon the admission of
a Limited Partner (pursuant to Section 3.03(b) hereof) subsequent to the
Partnership's acquisition of any Production Interest (for purposes of this
Section 4.03, a "New Limited Partner"): (i) the Partnership shall allocate to
the New Limited Partner his or her share of the aggregate of the existing
Limited Partners' adjusted bases (as determined pursuant to Treasury Regulation
Section 1.613A-3(e)(3)(iii)) in each existing property in the same proportion as
the New Limited Partner's Capital Contribution bears to the total of all Limited
Partners' Capital Contributions; and (ii) each existing Limited Partner's
adjusted basis shall be reduced by the percentage of the Partnership's aggregate
basis in the property that is allocated to the New Limited Partner. Each Partner
shall separately keep records of his share of the adjusted basis in each
separate oil and gas property, adjust such share of the adjusted basis for any
cost or percentage depletion allowable with respect to such property and use
such adjusted basis in the computation of his cost depletion or in the
computation of his gain or loss on the disposition of such property by the
Partnership. It is the intent of the Partnership to comply with Regulation
Section 613A-3(e)(3). Consistent therewith, each Partner hereto agrees to
furnish to the Partnership, within 30 days of receipt of written request by the
Partnership, a written statement which clearly and accurately states the amount
of that Partner's adjusted basis or depletion deductions with respect to each
existing Partnership property. In determining depletion deductions, each Partner
must treat as actually deducted any amount disallowed and carried over as a
result of the 65 percent of income limitation of Code Section 613A(d)(1).

                    (c)  Except as otherwise required by Section 704(c) of the
Code, for the purpose of the separate computation of gain or loss by each
Partner on the sale or disposition of each separate oil and gas property (as
defined in Section 614 of the Code), the Partnership's allocable share of the
"amount realized" (as such term is defined in Section 1001(b) of the Code) from
such sale shall be allocated (A) first, to the Partners in an amount equal to
the Simulated Basis in each oil and gas property in the same proportions as such
Partners were allocated the Simulated Basis in (or attributable to) such
property (as determined in accordance with Paragraph 4.03(b)), and (B) second,
the balance to the Partners in proportion to and to the extent of their
respective share of gain from such sale under Paragraph 4.02(b).

                    (d)  To the extent of any Recapture Income resulting from
the sale or other taxable disposition of a Partnership asset, the amount of any
gain from such disposition allocated to (or recognized by) a Partner for federal
income tax purposes pursuant to the above provisions shall be deemed to be

                                     -12-
<PAGE>

Recapture Income to the extent such Partner (or its predecessor in interest) has
been allocated or has claimed any deduction directly or indirectly giving rise
to the treatment of such gain as Recapture Income. Any recapture of tax credits
shall be taken into account by those Partners to whom such credits were
allocated as required under the Code and applicable Treasury Regulations.

                     (e)  All items of income, gain, loss, deduction, credit and
basis allocation recognized by the Partnership for federal income tax purposes
and allocated to the Partners in accordance with the provisions hereof shall be
determined without regard to any election under Section 754 of the Code which
may be made by the Partnership; provided, however, such allocations, once made,
shall be adjusted as necessary or appropriate to take into account those
adjustments permitted by Sections 734 and 743 of the Code and, where
appropriate, to provide only Partners recognizing gain on Partnership
distributions covered by Section 734 of the Code with the federal income tax
benefits attributable to the increased basis in Partnership property resulting
from any election under Section 754 of the Code.

               4.04  Allocation Among Partners. (a) Except as otherwise
                     -------------------------
expressly required in this Article IV, all allocations of income, gains, losses,
deductions, credits and adjusted tax basis of depletable properties that are
allocated to the Limited Partners as a group shall be allocated among them in
proportion to their respective Capital Contributions as measured on the last day
of the appropriate period as determined pursuant to Paragraph 4.04(b).

                     (b)  Partnership income, gain, loss, deduction, credits and
Distributable Cash attributable to any interest in the Partnership or portion
thereof which has been transferred shall be allocated between the transferor and
the transferee as follows:

                          (i)    For the months prior to the transfer, to the
transferor;

                          (ii)   For the months subsequent to the transfer, to
the transferee;

                          (iii)  For the month of the transfer, to the
transferee if the transfer occurs on or before the 15th day of such month and to
the transferor if occurring after.

For purposes of the above allocation of income, gain, loss, deduction and
credit, Partnership items may be allocated equally among the months of the
Partnership's tax year without regard to Partnership operations during such
months or may be allocated according to such other method as the Managing
General Partner may choose in its absolute discretion, as then permitted by the
Code.

                                     -13-
<PAGE>

                     (c)  Partnership income, gain, loss, deduction and credit
shall be allocated among the Partners to take into account their varying
interests during the year in which Capital Contributions are made at different
times during such year in any manner determined by the Managing General Partner,
in its absolute discretion, as then permitted by the Code.

               4.05  Cash Distributions.  For at least the first year of the
                     ------------------
Partnership, Distributable Cash shall be calculated and distributed monthly, and
thereafter at least quarterly (but more frequently in the discretion of the
Managing General Partner), by the Managing General Partner to each Partner as
follows:

                     (a)  Distributable Cash in the proportion that a Limited
Partner's Capital Contribution bears to the total Capital Contributions of all
Limited Partners shall be distributed 87.5% to such Limited Partner and 12.5%
to the General Partners (12% to the Managing General Partner and .25% to each of
the Additional General Partners).

                     (b)  If any Partner shall not withdraw the whole or any
part of his share of Distributable Cash, such Partner shall not be entitled to
receive any interest thereon, nor shall any such cash thus not withdrawn be
deemed an increase in such Partner's share of the capital of the Partnership
without the express, written consent of all other Partners.

                     (c)  For Partners admitted under Paragraph 3.03(b), a
Limited Partner shall be treated as a Limited Partner for the month with respect
to the distributions referenced in Paragraph 4.05(a) if they acquire their
interest on or before the last day of the month.

               4.06  Distribution of Net Proceeds from Sales or Other
                     ------------------------------------------------
Dispositions. (a) Except as provided in Paragraph 4.06(b), any net insurance
------------
proceeds, any net proceeds of a condemnation, sale, exchange or other
disposition of a Production Interest or any portion of Partnership property or
interest therein, other than the disposition of all Partnership assets upon
dissolution and liquidation, shall be distributed in the following order of
priority:

                           (i)   First, to the creditors of the Partnership in
payment of the unpaid liabilities of the Partnership to the extent required
under agreements with such creditors; and

                           (ii)  Next, to the setting up or replacing of any
reserves which the Managing General Partner may deem reasonably necessary for
any anticipated, contingent or unforeseen liabilities or obligations of the
Partnership arising

                                     -14-
<PAGE>

out of, or in connection with, the conduct of the Partnership's business;

                           (iii)  Next, with respect to proceeds from the
condemnation, sale, exchange or other disposition of a Production Interest, to
the Partners in proportion to and to the extent of their respective share of the
Simulated Basis of the Production Interests; and

                           (iv)   Next, any remaining net proceeds in the
proportion that a Limited Partner's Capital Contribution bears to the total
Capital Contributions of all Limited Partners shall be distributed 87.5% to such
Limited Partner and 12.5% to the General Partners (12% to the Managing General
Partner and .25% to each of the Additional General Partners).

                     (b)   After provisions have been made for payment of any
unpaid liabilities of the Partnership to the extent required under agreements
with creditors and the setting up of a liquidation reserve, all amounts
distributed in liquidation of the Partnership or of the interest of one or more
Partners, shall be distributed in accordance with positive Capital Account
balances of the Partners, the interest of which are being liquidated (as
determined after taking into account all Capital Account adjustments for the
taxable year to reflect the allocation of gain or loss attributable to the
transaction giving rise to such proceeds and Unrealized Gain and Unrealized Loss
pursuant to Paragraph 4.01(b)(iv)) in proportion to such positive Capital
Account balances. Distributions pursuant to this Paragraph 4.06(b) shall be made
by the end of such taxable year (or, if later, within 90 days after the date of
such liquidation).

                     (c)   In the event that any reserves have been established
pursuant to the terms of this Agreement, distribution of such reserves will be
made to the Partners who received allocations of income or gain from the sale of
Production Interests corresponding to cash contributed to the reserves at the
time such reserves were created in proportion to such allocations of income or
gain from the sale of Production Interests, or, in the case of a liquidation
reserve, in proportion to the positive Capital Account balances of the Partners
after adjustment for the allocations of gain or loss arising from the
liquidating sale and Unrealized Gain or Unrealized Loss.

               V.    DUTIES, POWERS, AND RESTRICTIONS OF THE GENERAL PARTNERS.
                     ---------------------------------------------------------

               5.01  Management.  To the extent permitted by law, and subject
                     ----------
to the terms of this Agreement, the Managing General Partner shall have full
charge of the conduct of the Partnership's business in all respects and shall
have the following specific powers which it agrees to exercise in a commercially

                                     -15-
<PAGE>

reasonable manner giving due consideration to its fiduciary obligation to the
other Partners:

                    (a)  Acquisition of Production Interests. The Managing
                         ------------------------------------
General Partner is authorized and agrees to use its best efforts to acquire
Production Interests in oil and gas properties located in Oklahoma or such other
states as it deems appropriate, on such terms and conditions as it believes are
in the best interest of the Partnership, subject to the following limitations:

                         (i)    The Managing General Partner will endeavor to
diversify the Partnership's investments to the extent deemed to be in the best
interests of the Partnership by investing in properties in different geographic
locations and by balancing investments between properties having predicted high
rates of production in the early years, with possibly lower rates in later
years, and properties with more consistent levels of production over a longer
term.

                         (ii)   The Managing General Partner will endeavor to
reduce the risks of investment further by limiting the amount of Partnership
funds committed to any single property and will in no event commit in excess of
10% of the total capital of the Partnership to Production Interests in a single
well without the consent of a Majority in Interest of the Limited Partners.

                         (iii)  The Managing General Partner will evaluate each
property which is considered for acquisition using such information as is
available, including, for example, reserve reports, well logs, and pressure and
production records. In the event no current reserve report exists in respect of
any property in which the Managing General Partner intends to acquire an
interest, the Managing General Partner may cause such a report to be prepared.
The Managing General Partner may engage such consultants or other technical
advisors at the expense of the Partnership as it deems necessary or advisable to
advise the Partnership regarding acquisitions or dispositions of Production
Interests.

                         (iv)   Production Interests may be purchased from the
General Partners or an Affiliate, but only if the purchase price does not exceed
the fair market value of such interest. All Production Interests purchased from
the General Partners or an Affiliate will be acquired by the Partnership on
terms which conform substantially to industry practice.

                         (v)    Prior to the use of the Capital Contributions in
the manner contemplated by this Agreement, the Managing General Partner shall
invest such Capital Contributions in either United States treasury bills or
other

                                     -16-
<PAGE>

securities guaranteed by the United States government, or in a separately
designated interest-bearing account or certificate of deposit of a major United
States bank, and any interest thereon shall be the property of the Partnership;
provided, however, that the Managing General Partner shall distribute to the
Limited Partners all Capital Contributions which have not been used to purchase
Production Interests or otherwise used to cover Partnership expenses or for the
establishment of reserves permitted hereunder by December 3, 1998, together with
any interest earned thereon, in the proportion in which such Capital
Contributions were made by the Limited Partners.

                    (b)  Other Operations. The Managing General Partner will not
                         ----------------
cause the Partnership to engage in any exploratory or developmental drilling or
any related drilling or production enhancement activities except to the extent
provided herein.

                         (i)    The Managing General Partner may cause the
Partnership to engage in the drilling of offset wells or the reworking,
recompletion, deepening or plugging back of existing wells to the extent such
activities are incident to the operation of leases in which the partnership owns
a Production Interest and such activities are, in the determination of the
Managing General Partner, in the best interests of the Partnership.

                         (ii)   The Managing General Partner may cause the
Partnership to engage in secondary or tertiary recovery operations and other
production enhancement techniques to the extent such activities are incident to
the operation of leases in which the Partnership owns a Production Interest and
such activities are, in the determination of the Managing General Partner, in
the best interests of the Partnership.

                         (iii)  The activities described in subparagraphs (i)
and (ii) may, in the discretion of the Managing General Partner, be financed out
of Partnership capital, Partnership borrowing permitted under Paragraph 5.01(e)
or out of Partner ship revenues from Production Interests.

                    (c)  Sale of an Oil and Gas Interest. The Managing General
                         -------------------------------
Partner may, on behalf of the Partnership, sell or otherwise dispose of any
Production Interest owned by the Partnership upon such terms and conditions as
it believes to be in the best interests of the Partnership; provided, however,
that:

                         (i)    Without the prior written consent of a Majority
in Interest of the Limited Partners, the Partnership shall not sell or otherwise
dispose of Partnership assets which had, at the time of their acquisition, a
fair market value in excess of 50% of the initial capital of the Partnership;

                                     -17-
<PAGE>

                         (ii)   Any Production Interest which is transferred to
an Affiliate by the Partnership shall be for a consideration not less than the
fair market value thereof; and

                         (iii)  The Partnership may farm out a Production
Interest if the Managing General Partner determines that (a) the Partnership
lacks sufficient funds to drill on the Property in which it owns such Production
Interest, or (b) the best interests of the Partnership would otherwise be served
by such transaction.

                    (d)  Miscellaneous. The Managing General Partner shall have
                         -------------
authority to take all such other action as may be necessary to carry out the
business of the Partnership, including but not limited to the following:

                         (i)    To arbitrate, compromise, settle, sue on or
defend any claim of or against the Partnership;

                         (ii)   To insure the Partnership against such risks and
hazards and in such amounts as it shall determine;

                         (iii)  To designate depositories for the funds of the
Partnership and to make deposits therein and withdrawals therefrom in accordance
with Paragraph 5.02;

                         (iv)   To establish reserve accounts reasonable in
amount, to provide for any contingent or unforeseen liabilities or obligations
of the Partnership, and to invest the funds held in such reserve account in
United States treasury bills or other securities guaranteed by the United States
Government, or in a separately designated interest-bearing bank account, or
certificate of deposit;

                         (v)    To employ, engage, retain and oversee any
persons, firms or corporations to act as account ants or lawyers or other
personnel, and to pay such fees and other amounts in connection therewith, as it
may deem necessary or desirable;

                         (vi)   To file for record a Certificate of Limited
Partnership or any amendment thereto in the appropriate office;

                         (vii)  To execute, acknowledge and deliver any and all
instruments which may be deemed necessary or convenient to effect the foregoing;

                                     -18-
<PAGE>

                    (viii) To pay all Partnership fees and expenses of any kind,
including, without limitation, the fees and expenses related to developing the
Production Interests;

                    (ix)   Subject to the restriction set forth in Paragraph
5.01(e)(i), to borrow funds on behalf of the Partnership and to secure such
borrowings with Partnership assets;

                    (x)    To enter into any transactions with Affiliates
(including, without limitation, retaining Affiliates to manage operations at the
site of any property in which the Partnership has a Production Interest),
provided that the terms of such transactions are at least as favorable to the
Partnership as those which would have been available from unaffiliated third
parties; and

                    (xi)   To perform all other necessary business and take such
other actions permitted by law as may be necessary, advisable or expedient to
carry on the business of the Partnership.

               (e)  Restrictions.  Notwithstanding anything contained in this
                    ------------
Agreement to the contrary, the Managing General Partner shall not, without the
prior written consent of a Majority in Interest of the Limited Partners, do any
of the following:

                    (i)    Borrow funds in excess of 30% of the total Capital
Contributions of the Limited Partners to finance Partnership activities
(including acquiring and developing Production Interests); or

                    (ii)   Confess a judgment against the Partnership.

               (f)  Organization and Property Acquisition Fees.  For services
                    ------------------------------------------
rendered in connection with the organization of the Partnership, the selection
of oil and gas properties and negotiation of acquisition contracts and the
negotiation of the relationship with the Selling Agent the Managing General
Partner shall receive a fee in the amount of 3% of the Capital Contributions
of each Limited Partner, payable simultaneously with the acceptance by the
Partnership of such Capital Contributions.

               (g)  Syndication Expenses.  The Managing General Partner is
                    --------------------
authorized to pay the Selling Agent brokerage commissions in the amount of 3% of
the purchase price of the Units. The Managing General Partner is further
authorized to enter into an agreement with the Selling Agent pursuant to which
the Selling Agent will be paid.

                                     -19-
<PAGE>

               (h)  Reimbursement of Expenses.  The Managing General Partner
                    -------------------------
will be reimbursed by the Partnership for out-of-pocket expenses incurred in its
capacity as Managing General Partner.  In addition, the Managing General Partner
will be reimbursed out of Partnership funds for the Partnership's allocable
share to the extent incurred by the Managing General Partner of overhead
expenses, including office rent and salaries for clerical staff and appropriate
production supervisory personnel, and any other overhead expenses which the
Managing General Partner deems reasonable.  The reimbursement to the Managing
General Partner for overhead expenses will in no event exceed three (3%) percent
of Distributable Cash.

          5.02 Partnership Deposits and Disbursements.  In order to insure that
               --------------------------------------
the books of the Partnership accurately reflect the receipts and disbursements
of the Partnership, all receipts of the Partnership, including Capital
Contributions from the Partners, will be deposited and maintained in the name of
the Partnership in such bank account(s) as shall be designated by the Managing
General Partner. The Managing General Partner will disburse only from funds in
said Partnership account any and all fees and all other Partnership expenses and
obligations, including any and all obligations owed to the Managing General
Partner.

          5.03 Books.  (a)  The Managing General Partner will maintain or cause
               -----
to be maintained full and accurate books and records of the Partnership, and all
Partners will have the right to inspect and examine the same at reasonable times
and upon reasonable notice. The books will be kept on an accrual basis, and the
fiscal year of the Partnership will be the calendar year.

               (b)  The records to be kept at the Partnership's office in
Oklahoma shall include, without limitation, (i) a current list of the full name
and last known business address of each Partner set forth in alphabetical order;
(ii) a copy of the Certificate of Limited Partnership and all certificates of
amendment thereto, together with executed copies of any powers of attorney
pursuant to which any certificate has been executed, (iii) copies of the
Partnership's federal, state and local tax returns and reports, if any, for the
three most recent years, and (iv) copies of any then effective written
Partnership Agreement and any financial statements of the Partnership for the
three most recent years.

          5.04 Accounting.  The books will be closed and balanced at the end of
               ----------
each fiscal year, but the Partnership will not have an audit prepared unless
requested to do so by a Majority in Interest of the Limited Partners. The
Managing General Partner will, to the extent possible, furnish to each Partner,
within 90 days after the close of each fiscal year, a Schedule K-1 (or any
successor form thereto), and within 230 days after the close of each fiscal
year, copies of the Partnership's annual financial

                                     -20-
<PAGE>

statements, including a written balance sheet and statement of income or loss.
Such financial statements will contain a report of said accountants which shall
include: (a) a statement that an audit, if required, of such financial
statements has been made in accordance with generally accepted auditing
standards on the accounting basis used by the Partnership for making its federal
income tax returns; (b) a statement of the opinion of such accountant with
respect to the financial statements and the accounting principles and practices
reflected therein and in regard to the consistency of the application of the
accounting principles; and (c) an identification of any matters to which the
accountant takes exception and a statement, to the extent practicable, of the
effect of each such exemption on such financial statements. Such financial
statements will also indicate the share of the Partners of the Net Income, Net
Loss and other relevant fiscal items of the Partnership for such fiscal year.
The Managing General Partner also agrees to arrange for the preparation of all
tax returns required to be filed for the Partnership. Each Partner shall be
entitled to receive, upon request, copies of all federal, state and local income
tax returns and information returns, if any, which the Partnership is required
to file. The Managing General Partner will engage on behalf of the Partnership a
firm of qualified certified public accountants to prepare Partnership tax
returns and to conduct the audits required under this Agreement.

          5.05 Other Ventures.  Subject to their fiduciary obligations to the
               --------------
Partnership, any of the Partners may engage in or possess an interest in other
business ventures of every nature and description, independently or with others,
whether or not such activities compete with the business of the Partnership, and
neither the Partnership nor the other Partners shall have, nor have the right to
acquire, any right by virtue of this Agreement in and to such independent
ventures or to the income or profits derived therefrom.

          5.06 Right to Rely on Authority of the Managing General Partner.  In
               ----------------------------------------------------------
no event shall any person dealing with the Managing General Partner or its
representatives with respect to any property of the Partnership be obligated to
ascertain that the terms of this Agreement have been complied with, or be
obligated to inquire into the necessity or expediency of any act or action of
the Managing General Partner or its representatives; and every contract,
agreement, promissory note, or the instrument or document executed by the
Managing General Partner on behalf of the Partner ship shall be conclusive
evidence in favor of any and every person relying thereon or claiming thereunder
that (a) at the time of the execution and/or delivery of such instrument or
document, this Agreement was in full force and effect, (b) such instrument or
document was duly executed in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership and all of the Partners hereof,
and (c) the Managing General Partner or its representatives were duly authorized
and empowered to execute and

                                     -21-
<PAGE>

deliver any and every such instrument or document for and on behalf of the
Partnership.

          5.07 Prohibition on Management Participation by Limited Partners. (a)
               -----------------------------------------------------------
No Limited Partner, except for a Limited Partner who is also a General Partner,
shall participate in the management of the Partnership's business. (b) Except as
otherwise provided herein, no Limited Partner (other than any Limited Partner
who is also a General Partner) shall receive any compensation for services
rendered to the Partnership.

          5.08 Liability of the General Partners; Indemnity. The General
               --------------------------------------------
Partners and their Affiliates shall have no liability to the Partnership or to
any Partner for any loss suffered by the Partnership which arises out of any
action or inaction of the General Partners if the General Partners, in good
faith, determined that such course of conduct was in the best interests of the
Partnership and such course of conduct did not constitute negligence or
misconduct of the General Partners. The General Partners and their Affiliates
will be indemnified by the Partnership against any losses, judgments,
liabilities, and amounts paid in settlement of any claims sustained by them in
connection with the Partnership, provided that the same were not the result of
negligence or misconduct on the part of the General Partners.

          All amounts paid by the Partnership to the General Partners by reason
of the foregoing indemnification provisions of the Agreement will be paid out of
Partnership assets and in no event shall any Limited Partner have any personal
liability on account thereof.

          Notwithstanding the foregoing, the General Partners and their
Affiliates and any person acting as a Broker-Dealer shall not be indemnified for
liabilities arising under federal and state securities laws unless (a) there has
been a successful adjudication on the merits of each count involving securities
laws violations; (b) such claims have been dismissed with prejudice on the
merits; or (c) a Court of competent jurisdiction approves a settlement of the
claims against a particular indemnitee.

          In any claim for indemnification for federal or state securities law
violations, the party seeking indemnification shall place before the Court the
position of the Securities and Exchange Commission and the Massachusetts
Securities Division with respect to the issue of indemnification for securities
law violations.

          The Partnership may advance the legal expenses and other costs
incurred in connection with any threatened, pending or contemplated action, suit
or proceeding to which the General Partners were or are a party or are
threatened to be made a party by reason of the fact that they are or were the
General Partners of

                                     -22-
<PAGE>

the Partnership, provided that the following three conditions are satisfied: (a)
the legal action relates to the performance of duties or services by the General
Partners on behalf of the Partnership; (b) the legal action is initiated by a
third party who is not a Limited Partner; and (c) the General Partners undertake
to repay any funds advanced under this subparagraph to the Partnership in any
case in which the General Partners would not be entitled to indemnification
under this paragraph.

          The 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.


          5.09 Removal of a General Partner.  (a)  Without limiting any rights
               ----------------------------
of the Limited Partners otherwise provided at law or in equity, any General
Partner may be removed as general partner of the Partnership at any time by a
vote of 75% in interest of the Limited Partners for (i) fraud, gross negligence
or willful misconduct; or (ii) a material default by it in the performance of
its obligations to the Partnership under this Agreement.

               (b)  The Limited Partners agree that they will not exercise their
right to remove or enforce any of their rights against the General Partners
until such time as they have given written notice to the General Partners of
their intention to exercise such right and the default, or act or action
allegedly constituting fraud, gross negligence or willful misconduct relating
thereto and have provided such General Partner with a reasonable time
thereafter, not less than 30 days, within which to cure the default. If such
default is cured within the permitted time, the rights of the Limited Partners
under this Paragraph 5.09 with respect to that particular default will
terminate.

               (c)  Any removal of any General Partner under this Paragraph 5.09
shall not relieve such removed General Partner from its obligations to the
Partnership incurred prior to such removal nor shall it deny such removed
General Partner the rights provided in Paragraph 7.02(b). Upon such removal the
Partnership shall file an amendment to this Agreement evidencing the removal of
the General Partner as General Partner of the Partnership.

          VI.  TRANSFER OF PARTNERS' INTEREST
               ------------------------------

          6.01 General Partners.  A General Partner may not assign or transfer
               ----------------
any portion of its interest in the Partnership without the consent of a
Majority in Interest of the Limited Partners. If a General Partner wishes to
assign or transfer any portion of its interest, it must give written notice of
such intention to the Limited Partners. Each Limited Partner shall have ten

                                     -23-
<PAGE>

business days to reply after such notice has been sent, and any Limited Partner
who does not vote against such assignment or transfer within such period shall
be deemed to have consented to such transfer or assignment.  Notwithstanding the
foregoing, however, any such partial assignment or transfer shall not
discharge the General Partner from any liability or obligation to the
Partnership by reason of such partial assignment or transfer.  The foregoing
shall not be deemed to prohibit a General Partner from assigning without the
consent of the Limited Partners all or a portion of its interest in the income
and profits of the Partnership to an Affiliate.

          6.02 Limited Partners.  (a)  No Limited Partner may assign or transfer
               ----------------
their Partnership interest and have such transferee admitted as a substituted
Limited Partner in respect of such interest without the prior written consent of
the Managing General Partner. Any Limited Partner who desires to secure
permission to transfer their interest shall notify the Managing General Partner
in the manner referred to in Paragraph 8.02 hereof. The Managing General Partner
may withhold its consent to any proposed transfer in its sole discretion and
will in no event give such consent if the proposed transfer violates applicable
federal or state securities laws or other laws or regulations.

               (b)  Any Limited Partner who desires to transfer their interest
shall arrange for their transferee to be bound by the provisions of this
Agreement by having such transferee execute such documents as shall be required
by the Managing General Partner to make the transferee a party to this Agreement
and by delivering the same to the Managing General Partner together with any
such other information that may be required by counsel to the Managing General
Partner to determine whether the proposed transfer violates applicable federal
or state securities or other laws or regulations. The Managing General Partner
in no event will give its consent to any proposed transfer unless and until the
Partnership receives payment in full from the proposed transferee of any and
all reasonable legal, accounting and other charges and fees incurred by the
Partnership and its counsel in connection with any such transfer. If and when
the consent of the Managing General Partner provided for in this Paragraph is
secured, the transferee shall become a substituted Limited Partner as to the
interest thus transferred.

               (c)  Anything contained herein to the contrary notwithstanding,
no transfer or assignment of interests in the Partnership shall be effective if,
in the opinion of counsel to the Partnership, (i) such transfer would result in
the termination of the Partnership pursuant to Section 708 of the Code, (ii) it
would result in the Partnership being classified as an association taxable as a
corporation or publicly traded partnership for federal income tax purposes, and
any such transfer shall be effected in such manner as may be necessary to
maintain such continuity or the

                                     -24-
<PAGE>

classification of the Partnership as a partnership for federal income tax
purposes.

                        (d) Any transferee of an interest in the partnership
shall succeed to the transferor's Capital Account as of the date of such
transfer and shall be deemed to have re ceived the cash distributions received
by the transferor and, upon admission to the Partnership, shall be deemed to
have made the Capital Contribution made by the transferor.

                        (e) Notwithstanding anything contained herein to the
contrary, the Partnership shall not participate in the establishment of, or
inclusion of Units thereon, an established securities market within the meaning
of Treasury Regulation Section 1.7704-1(b) or a secondary market or the
substantial equivalent thereof within the meaning of Treasury Regulation Section
1.7704-(c), and the Partnership shall not recognize any transfers made on any
such market by redeeming the transferor Partner (in the case of a redemption or
repurchase by the Partnership) or admitting the transferee Partner or otherwise
recognizing any rights of the transferee, such as a right of the transferee to
receive Partner ship distributions (directly or indirectly) or to acquire an
interest in the capital or profits of the Partnership.

                 6.03   Section 754 Election.  In the event of a transfer of
                        --------------------
all or part of the interest of a Limited Partner in the Partnership by sale or
exchange or on the death of a Limited Partner, upon the request of the
transferee of such interest the Managing General Partner shall cause the
Partnership to elect, pursuant to Section 754 of the Code, or corresponding
provision of subsequent law, to adjust the basis of the Partnership property as
provided by Section 734 or 743 of the Code. This and all other elections
required or permitted to be made by the Partnership under the Code shall be made
by the Managing General Partner in such manner as in the Managing General
Partner's reasonable judgment will be most advantageous to the Limited Partners.

                 VII.  DISSOLUTION OF PARTNERSHIP
                       --------------------------

                 7.01   Limited Partners.  Neither the death or dissolution of a
                        ----------------
Limited Partner nor an act of bankruptcy by a Limited Partner will dissolve the
Partnership or terminate the Partnership's business, but the rights of such
Partner to receive Partnership distributions and allocation will, on the
happening of such an event, devolve upon such Partner's legal representative or
successor in interest, as the case may be, subject to the terms and conditions
of this Agreement, and the Partnership shall continue as a limited partnership.
Such Partner's representative or successors in interest shall be liable for all
of the obligations of such Partner hereunder.

                                     -25-
<PAGE>

               7.02   General Partners.  (a)  An act of bankruptcy, removal
                      ----------------
or withdrawal of, or assignment for the benefit of creditors by any General
Partner shall dissolve the Partnership. Notwithstanding anything in this
Paragraph 7.02 to the contrary, if there is at least one remaining General
Partner, then the business of the Partnership may be continued without
dissolution and winding up if such General Partner(s) agrees.  Additionally, the
Partner  ship may be continued without dissolution and winding up if, within
ninety (90) days after an event specified in this Paragraph 7.02, all the
Partners agree in writing to continue the business of the Partnership without
dissolving and winding up and to appoint, effective as of the date of
bankruptcy, removal or withdrawal, one or more additional General Partners if
necessary.  A Majority in Interest of the Limited Partners shall select from the
General Partners a Managing General Partner. The General Partners (or their
legal representatives, as the case may be) are hereby deemed to consent to the
continuation of the business of the Partnership by the appointment of the new
general partner(s).

                      (b) From and after the date of any event set forth in
Paragraphs 5.09 and 7.02(a), the bankrupt, removed or withdrawn General Partner
or its legal representatives, as the case may be, shall be a limited partner of
the Partnership and shall continue to hold its interest in Partnership
allocations and distributions in such capacity.

               7.03   Procedure.  Upon dissolution or termination of the
                      ---------
Partnership, the assets of the Partnership shall be liquidated as promptly as
possible, but in an orderly and businesslike manner so as not to involve undue
sacrifice and in the manner provided for in Paragraph 4.06 hereof, and the
Managing General Partner shall cause to be prepared by the firm of certified
public accountants then retained by the Partnership a statement setting forth
the assets and liabilities of the Partnership as of the date of dissolution,
which statement shall be furnished to all of the Partners.  Upon the dissolution
or termination of the Partnership, the net proceeds from the liquidation of the
assets of the Partner  ship and any capital gain or capital loss relating
thereto shall be distributed as provided in Paragraph 4.06(b) hereof.

               7.04   Capital Accounts.  (a)  For the purposes of any
                      ----------------
applicable state law, upon the dissolution or termination of the Partnership,
any negative Capital Account balances of the Partners shall in no event be
considered to be an asset of the Partnership and in no event shall the Partners
have any obligation to make any repayment thereof or contribution of capital in
respect thereto except as provided in Paragraph 7.04(b) hereof.

                      (b) Notwithstanding any other provisions of this
Agreement, upon dissolution or termination of the Partnership, or upon the
liquidation of a General Partner's inter est in the Partnership, the General
Partner will be required to

                                     -26-
<PAGE>

contribute to the Partnership capital an amount equal to the deficit balance, if
any, in their Capital Accounts on the date of dissolution or termination. Any
contribution required to be made by a General Partner under this Paragraph
7.04(b) shall be made by the end of the tax year in which such dissolution,
termination or liquidation occurs (or, if later, within 90 days after the date
of such dissolution, termination or liquidation).

                    VIII.  MISCELLANEOUS
                           -------------

                    8.01   Agreement in Counterparts.  This Agreement may be
                           -------------------------
executed in counterparts, each of which, when so executed, shall be deemed an
original, but all of which, taken together, shall constitute one and the same
agreement, binding upon the parties hereto, their heirs, executors,
administrators, successors and permitted assigns.

                    8.02   Notices.  All notices and demands under this
                           -------
Agreement shall be in writing, mailed, postage prepaid, by certified or
registered mail, return receipt requested, directed to the parties at their
respective addresses set forth in this Agreement, and to the Partnership at its
office set forth and the same shall be deemed to have been given and made four
days following the date thus mailed. Any Limited Partner may change their
address by giving written notice to the Managing General Partner stating their
new address. Any General Partner may change his address by giving written notice
to all other Partners. The business address of the Partnership, the Managing
General Partner and the Additional General Partners is 119 North Robinson, Suite
600, Oklahoma City, Oklahoma, 73102.

                    8.03   Power of Attorney.  The Subscription Agreement
                           -----------------
contains a special power of attorney granted by the Limited Partners to the
president of the Managing General Partner. In the event of any conflict between
the provisions of this Agreement and any document executed or filed by the
Managing General Partner pursuant to the Special Power of Attorney granted in
the Subscription Agreement, this Agreement shall govern.

                    8.04   Amendment.  This Agreement may be modified or
                           ---------
amended at any time by a writing signed by all the General Partners and by a
Majority in Interest of the Limited Partners. No modification or amendment of
this Agreement, however, shall change the interest of any Partner in the
capital, profit or cash distributions of the Partnership or his rights of
contribution or withdrawal with respect thereto, or amend Paragraph 1.04 or
Article VII hereof or this Paragraph 8.04 without the express, written consent
of each Partner materially affected thereby.

                    8.05   Additional Documents.  Each party hereto agrees to
                           --------------------
execute, with acknowledgement or affidavit, if required by the Managing General
Partner, any and all documents and writings

                                     -27-
<PAGE>

which may be necessary or expedient in connection with the creation of the
Partnership and the achievement of its purposes, specifically including the
Partnership's Certificate of Limited Partner ship and all amendments thereto or
cancellation thereof.

                    8.06   Meetings.  Upon the written request of a Majority in
                           --------
Interest of the Limited Partners, the Managing General Partner will call a
meeting of the Partners to be held at the Part  nership's office in Oklahoma or
such other location as is agreed to by the Partners requesting such meeting
within a reasonable time after such request.

                    8.07   Validity.  In the event that any provision of this
                           --------
Agreement shall be held to be invalid, the same shall not affect in any respect
whatsoever the validity of the remainder of this Agreement.

                    8.08   Governing Law.  This Agreement shall be construed
                           -------------
according to, and the management of the Partnership shall be governed by, the
laws of the State of Oklahoma.

                    8.09   Waiver.  The waiver by any party hereto of the
                           ------
breach of any term, covenant, agreement or condition herein contained shall not
be deemed a waiver of any subsequent breach of the same or any other term,
covenant, agreement or condition here in, nor shall any custom, practice or
course of dealings arising among the parties hereto in the administration hereof
be construed as a waiver or diminution of the right of any party hereto to
insist upon the strict performance by any other party of the terms, covenants,
agreements and conditions herein contained.

                    8.10   Federal Tax Audits.  (a)  Each Limited Partner does
                           ------------------
hereby appoint and designate the Managing General Partner as tax matters partner
("TMP"), as such term is defined in the Code and the regulations thereunder.
The TMP is authorized to take all action on behalf of the Partnership and the
Partners permitted under the Code.  The Partnership may engage its account  ants
or attorneys to assist the TMP in discharging its duties hereunder.

                         (b) The TMP shall be entitled to an indemnity from the
Partnership (subject to Paragraph 5.08) for any act performed by it within the
scope of its duties as tax matters partner, except for the negligent or willful
acts or failures to act as a tax matters partner, provided that any indemnity
under this Paragraph shall be provided out of and to the extent of Partnership
assets only and no Limited Partner shall have any personal liability on account
thereof.

                         (c) The TMP shall notify all Partners of the
commencement of any administrative proceeding by the

                                     -28-
<PAGE>

Internal Revenue Service and shall keep all Partners currently advised of
developments in any such proceedings.

               (d) Notwithstanding anything to the contrary contained in this
Paragraph 8.10, the TMP shall have no authority to bind any Limited Partner by
any settlement agreement entered into by the TMP and the IRS, unless such
Limited Partner has expressly notified the TMP in writing that the TMP is so
authorized. Within thirty (30) days after the TMP has received notice from the
IRS of a final partnership administrative adjust ment, the TMP shall notify all
of the Limited Partners of such final administrative adjustment and the effect
it will have on their individual tax returns on a per Unit basis. Such
notification shall also include information concerning the Limited Partners'
right to request the same settlement terms from the IRS.

               (e) All reasonable expenses incurred by the TMP in connection
with any administrative proceeding before the IRS and/or judicial review of such
proceeding, including reasonable attorneys' fees, shall be deemed a Partnership
operating expense.

               (f) Any Partner other than the TMP who wishes to participate in
the administrative proceedings at the Partnership level may do so, but any
legal, accounting or other expenses incurred by such Partner in connection
therewith shall not be deemed a Partnership expense but shall be paid by such
Partner.

          8.11  Delivery of Certificates.  The Managing General Partner shall
                ------------------------
not be required to deliver or mail to any Limited Partner a copy of any
Certificate of Limited Partnership or amendment thereto unless such Partner
specifically requests such certificate(s).

          IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the day and in the year first above written.


                                     GENERAL PARTNERS
                                     ----------------

                                     CORAL RESERVES, INC.



                                By:  _______________________________________
                                     Leo Woodard, President



                                     _______________________________________
                                     Leo Woodard, Individually

                                     -29-
<PAGE>

                                    _________________________________________
                                    John Penton, Individually



                                    LIMITED PARTNERS
                                    ----------------


                                    _________________________________________
                                    Leo Woodard, Withdrawing
                                    Initial Limited Partner


                                    _________________________________________
                                    John Penton, Withdrawing
                                    Initial Limited Partner


                                    _________________________________________
                                    Leo Woodard, as attorney-in-fact
                                    for the Limited Partners whose
                                    names are listed on Schedule A

                                     -30-