Document:

PAINEWEBBER/GEODYNE ENERGY
                        INCOME PRODUCTION PARTNERSHIP I-F
                         AMENDED AND RESTATED AGREEMENT
                                 OF PARTNERSHIP

        Amended and Restated Agreement of Partnership,  dated as of December 17,
1986,  among  Geodyne  Production  Company,  a  Delaware  corporation,   and  PW
Production   Inc.,   a  Delaware   corporation,   as  Managing   Partners,   and
PaineWebber/Geodyne  Energy Income Limited  Partnership I-F, an Oklahoma limited
partnership, as General Partner.

        Whereas,  PaineWebber/Geodyne  Energy Income Production  Partnership I-F
has  heretofore  been  formed  as  a  general   partnership  under  the  Uniform
Partnership Act of the State of Oklahoma pursuant to an Agreement of Partnership
dated as of September 10, 1986; and

        Whereas, the parties hereto desire to amend the Agreement of Partnership
of the Production Partnership and to restate said Agreement in its entirety;

        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 Limited  Partnership  Agreement and are
not otherwise defined herein shall have the respective meanings set forth in the
Limited 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 Managing Partners for the Production Partnership.

                                      -1-
<PAGE>

        "Acquisition  Reserve  Report" shall mean a Hydrocarbon  reserve  report
made available to the Production  Partnership  prepared by a qualified petroleum
engineering  firm  acceptable to the Managing  Partners in  connection  with the
proposed acquisition of a Producing Property, which shall include statements (i)
identifying  reserves  of  Hydrocarbons  referred  to in such  report  as Proved
Developed Producing Reserves,  Proved Developed Non-Producing Reserves or Proved
Undeveloped  Reserves,  as the case may be, and identifying all computations and
determinations made for purposes of such report, including,  without limitation,
the present and future prices for  Hydrocarbons and the present and future costs
to  produce  and  develop  such  Hydrocarbons  used  in  such  computations  and
determinations,  (ii) with respect to the determination of the nature and extent
of the reserves of Hydrocarbons  reflected in such report,  that the collection,
analysis and evaluation of the basic physical data upon which such determination
is based were performed by such qualified petroleum  engineering firm or if such
data were collected by another Person, that such qualified petroleum engineering
firm has made  reasonable  inquiry with respect to the methods  employed in such
collection and is satisfied that the data so collected may be reasonably  relied
upon for the purpose of making the determination reflected in such report, (iii)
specifying the respective amounts of Proved Developed Producing Reserves, Proved
Developed  Nonproducing  Reserves,  or  Proved  Undeveloped  Reserves  contained
therein, and (iv) indicating such qualified petroleum engineering firm's opinion
as to the  respective  estimated  present  values of future net revenues of each
category of reserves  contained  therein  determined in accordance with criteria
satisfactory  to the Managing  Partners and otherwise in  accordance  with sound
engineering  and industry  practices,  including such standards and practices as
may be  promulgated  by the  Society  of  Petroleum  Engineers  of the  American
Institute of Mining and Metallurgical  Engineers. Any such report may state that
such  qualified  petroleum  engineering  firm  expresses no opinion and makes no
warranty or  representation  with  respect to the proposed  acquisition  of such
Producing Property and that such qualified petroleum engineering firm is relying
on information  furnished by the Managing Partners as to the historical  volumes
of any Hydrocarbons  actually produced and as to the proposed ownership interest
of the Production Partnership in such Producing Property.

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

                                      -2-
<PAGE>

        "Activation"  or  "Activated"  shall  mean the  date on  which  (i) with
respect to the Limited  Partnership,  the  subscribers for Units shall have been
admitted to the Limited  Partnership as Limited Partners,  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  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 vote 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.  A reference to an Affiliate of the Managing  Partners  shall include an
Affiliate  of  either  or both of the  Managing  Partners.  Notwithstanding  the
foregoing,  no Person shall be deemed to be an Affiliate solely by reason of its
ownership of 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 a  Managing  Partner or
Affiliate thereof serves as general partner or venturer.

        "Agreement"   shall  mean  this  Amended  and   Restated   Agreement  of
Partnership as amended from time to time.

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

        "Capital  Contribution" shall mean the total amount of money contributed
to the  Production  Partnership  by all Partners or any class of Partners or any
one Partner (or the predecessor

                                      -3-
<PAGE>

holders of the Interests of such Partner or Partners),  as the context requires,
net of any refunds pursuant to Section 3.4 of this Agreement.

        "Code" shall mean the Internal  Revenue Code of 1954, as amended (or any
corresponding provisions of succeeding law).

        "Commercial  Well" shall mean any Production  Partnership  Well which is
capable of producing  Hydrocarbons  in commercial  quantities,  including  those
wells  which  are  shut-in  or  which  have not been  abandoned  within  60 days
following  the  commencement  of  production.  For purposes of this  definition,
production  shall  refer to the  commencement  of the  commercial  marketing  of
Hydrocarbons,  and shall not include any spot sales of Hydrocarbon production as
a result of testing procedures.

        "Consent"  shall mean the  consent  of a Person,  given as  provided  in
Section 11.1, to do the act or thing for which the consent is solicited,  or the
act of granting such consent, as the context may require.

        "Development  Drilling"  shall  mean all  drilling  and  completing,  or
plugging and abandoning  (after a determination  that a well is not a Commercial
Well), of a Production  Partnership  Well to a reservoir on a Lease or an offset
Lease, from which reservoir production is being obtained or, as determined by an
independent  petroleum  engineering  firm,  is  anticipated  to be obtainable in
commercial quantities, or the recompletion of an existing Production Partnership
Well;  provided,  however,  that  Development  Drilling  shall not  include  any
Identified Development Drilling.

        "Direct Administrative Costs" shall mean the actual and necessary direct
costs attributable to services provided to the Production Partnership by parties
other than the Managing  Partners or their  Affiliates,  whether incurred by the
Production  Partnership  directly or incurred by any of the Managing Partners or
their Affiliates,  including the annual audit fees, legal fees and expenses, the
costs of reviewing tax returns and reports,  the cost of reserve  reports (other
than the cost of  Acquisition  Reserve  Reports,  Engineering  Audit Letters and
evaluations thereof conducted on behalf of a Production Partnership) prepared by
independent  petroleum  engineering  firms,  and all other such  costs  directly
incurred by or for the benefit of the Production Partnership.

                                      -4-
<PAGE>

        "Distributable   Cash"  shall  mean,  with  respect  to  the  Production
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 Managing Partners,  to pay costs,  expenses or other obligations
whether then accrued or anticipated to accrue in the future.

        "Engineering Audit Letter" shall mean a document prepared by a qualified
petroleum  engineering  firm  acceptable to the Managing  Partners in connection
with the  proposed  acquisition  of a Producing  Property,  which shall  include
statements  indicating that (i) such qualified  petroleum  engineering  firm has
reviewed an oil and gas reserve  report  prepared  by the  engineering  staff of
Geodyne Resources,  Inc. or an Affiliate,  (ii) in the opinion of such qualified
petroleum  engineering  firm, the reserve report was prepared in accordance with
sound engineering and industry practices, including such standards and practices
as may be  promulgated  by the Society of  Petroleum  Engineers  of the American
Institute of Mining and Metallurgical  Engineers,  and (iii) with respect to the
determination of the nature and extent of the reserves of Hydrocarbons reflected
in such report,  such qualified  petroleum  engineering firm has made reasonable
inquiry with  respect to the methods  employed in the  collection,  analysis and
evaluation of the basic physical data upon which such determination is based and
is satisfied  that the data so collected may be  reasonably  relied upon for the
purpose of making the determination reflected in such report.

        "Farmout"  shall  mean an  arrangement  whereby  the owner of a Lease or
Working  Interest agrees to assign his interest in certain  specific  acreage to
the assignee,  retaining some interest such as an overriding  royalty  interest,
oil and gas payment,  offset  acreage or other type of interest,  subject to the
drilling of one or more specific  wells or other  performance  as a condition of
the assignment.

        "Fiscal Year" shall mean the calendar year.

        "General and Administrative  Costs" shall mean all customary and routine
legal,  accounting,  data  processing,  depreciation,  geological,  engineering,
travel, office rent, telephone,  secretarial,  expense reimbursements of members
of the  Management  Committee  when acting on Production  Partnership  business,
employee   compensation  and  benefits,   and  other  items  of  a  general  and
administrative  nature,  whether  like or unlike  the  foregoing,  and any other
incidental reasonable expenses

                                      -5-
<PAGE>

reasonably  necessary to the conduct of the Production  Partnership's  business,
computed on a cost basis, determined by the Managing Partners in accordance with
generally accepted  accounting  principles and reviewed by an independent public
accountant or certified  public  accountant.  General and  Administrative  Costs
shall  not  include  any costs  includable  under  the  foregoing  but which are
included  as Property  Acquisition  Costs,  Direct  Administrative  Costs,  cost
incurred  in  connection  with  Development  Drilling,   Identified  Development
Drilling and Improved Recovery projects, or Operating Costs.

        "General Partner" shall mean  PaineWebber/Geodyne  Energy Income Limited
Partnership I-F, an Oklahoma limited partnership,  acting in such capacity,  any
successor  in that  capacity,  and any other  General  Partner  admitted  to the
Production  Partnership  pursuant to the provisions of this Agreement subsequent
to the Activation of the Production Partnership.

        "Geodyne Production" shall mean Geodyne Production  Company,  a Delaware
corporation.

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

        "Identified   Development   Drilling"   shall  mean  all   drilling  and
completing, or plugging and abandoning (after a determination that a well is not
a Commercial Well), of a Production  Partnership Well drilled by or on behalf of
the  Production  Partnership  to a  reservoir  on a  Lease  or an  offset  Lease
constituting all or a portion of a Producing  Property or the recompletion of an
existing Production  Partnership Well, where (i) the drilling or recompletion of
such  Production  Partnership  Well  commences  after  the  acquisition  of such
Producing  Property by the Production  Partnership  and is conducted in order to
commence production of Hydrocarbons from Proved Undeveloped  Reserves identified
in the  Acquisition  Reserve  Report or  Engineering  Audit  Letter  prepared in
connection  with such Producing  Property,  (ii) the costs of development of the
Proved Undeveloped  Reserves were taken into account in such Acquisition Reserve
Report or Engineering Audit Letter in valuing such Proved  Undeveloped  Reserves
attributable to such Producing Property, and (iii) a portion of the cost paid by
the Production  Partnership  for such  Producing  Property is attributed by such
Acquisition   Reserve  Report  or  Engineering   Audit  Letter  to  such  Proved
Undeveloped  Reserves.  The term, Identified  Development  Drilling,  shall also
refer to any

                                      -6-
<PAGE>

Production  Partnership  Wells drilled or  recompleted  on a Producing  Property
subsequent  to the initial  Identified  Development  Drilling  conducted on such
Producing  Property in order to commence  production of Hydrocarbons from Proved
Undeveloped Reserves (in addition to those identified in the related Acquisition
Reserve Report or Engineering  Audit Letter) which have been  categorized by the
Managing  Partners  as Proved  Undeveloped  Reserves  by  virtue  of  production
obtained from prior Identified  Development Drilling conducted on such Producing
Property.  Any  reference  to  costs  incurred  in  connection  with  Identified
Development  Drilling  shall  include the  interest,  commitment  fees and other
financing charges and expenses of Production  Partnership borrowings incurred to
finance Identified Development Drilling.

        "Improved  Recovery"  shall mean all  methods of  supplementing  natural
forces and mechanisms of primary  recovery or otherwise  increasing the ultimate
recovery  from a Production  Partnership  Well,  including,  but not limited to,
water flooding,  pressure  maintenance,  gas cycling,  fluid injection,  polymer
flooding, chemical flooding, and the use of miscible displacement fluids.

        "Incapacity"  or   "Incapacitated"   shall  mean  the   adjudication  of
bankruptcy  (except  that,  in  the  case  of  a  Managing  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  Production  Partnership
(other than  Investment  Income) as determined  for Federal income tax purposes,
including  all  capital  or Code  Section  1231  gains  (but not  losses) of the
Production Partnership.

        "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 Production Partnership at any particular time,
including the rights and  obligations  of such Partner under this  Agreement and
the Act.

                                      -7-
<PAGE>

        "Investment  Income" shall mean all interest and dividend  income earned
on temporary investments of the Production  Partnership at any time prior to the
time at which an amount  equal to the Capital  Contributions  to the  Production
Partnership  available for the acquisition of Producing Properties have been (i)
expended or (ii) returned pursuant to Section 3.4 of this Agreement.

        "Lease"  shall mean a lease,  mineral  interest,  royalty or  overriding
royalty  covering  Hydrocarbons  (or a  contractual  right  to  acquire  such an
interest),  or an undivided  interest therein or portion thereof,  together with
all easements, permits, licenses, servitudes and rights-of-way situated upon, or
used or held for future use in connection with, the exploration,  development or
operation of such interest.

        "Limited  Partners"  shall  mean the  limited  partners  of the  Limited
Partnership or any substituted limited partners thereof.

        "Limited Partnership" shall mean the  PaineWebber/Geodyne  Energy Income
Limited Partnership I-F, an Oklahoma limited partnership.

        "Limited Partnership Agreement" shall mean the agreement under which the
Limited Partnership was formed, as amended and restated.

        "Management  Committee"  shall  mean  the  committee,  composed  of  two
representatives  from each Managing  Partner,  established  for the purposes set
forth in Sections 4.lC and 4.2A(iii) of this Agreement.

        "Management  Fee" shall mean the fee paid by the Production  Partnership
to the  Managing  Partners  pursuant  to  Section  5.2(l) of this  Agreement  in
connection with their management of the affairs of the Production Partnership.

        "Managing  Partners" shall mean Geodyne  Production  Company, a Delaware
corporation,  and PW  Production,  Inc., a Delaware  corporation,  and any other
Person  admitted as  additional  or  Substituted  Managing  Partner  pursuant to
Article Six of this Agreement.

        "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

                                      -8-
<PAGE>

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.

        "Operating Costs" shall mean all expenditures made and costs incurred by
the Production  Partnership  with respect to (i) the production and marketing of
Hydrocarbons from completed Production Partnership Wells, including labor, fuel,
repairs, hauling, materials,  supplies, utility charges and other costs incident
to or therefrom,  costs of maintaining  inventories incidental to the operations
of Producing  Properties,  costs of making transfers of lease and well equipment
to and from  Production  Partnership  Wells,  ad valorem  and  severance  taxes,
insurance and casualty  loss  expense,  and  compensation  to well  operators or
others for services  rendered in conducting such operations;  (ii) the interest,
commitment fees and other finance charges and expenses of Production Partnership
borrowings  incurred  in  connection  with  Development  Drilling  and  Improved
Recovery  Projects;  and  (iii)  processing  facilities,  pipelines,  gas  sales
facilities,  Improved  Recovery  projects,  and other  procedures and facilities
necessary  to produce  efficiently  the  Hydrocarbon  reserves  from a Producing
Property,  all to the  extent  such  costs  and  expenditures  are not  Property
Acquisition Costs.

        "Organization  and  Offering  Costs"  shall mean all costs and  expenses
incurred by the Managing  Partners in connection  with the  organization  of the
Production  Partnership,  including,  without limitation,  the legal,  printing,
accounting and other costs incurred in connection  with the  organization of the
Production  Partnership,  including,  without limitation,  the legal,  printing,
accounting and other costs  incurred in connection  with  preparing,  filing and
recording this Agreement.

        "Partner" shall mean any Managing  Partner or any General Partner of the
Production Partnership.

        "Payout" shall mean that time at which cash distributions have been made
by the Limited  Partnership to the Limited  Partners  pursuant to Section 5.1 of
the Limited  Partnership  Agreement  (together  with any  distributions  to such
Limited Partners pursuant to Section 3.4 of the Limited Partnership

                                      -9-
<PAGE>

Agreement),  in an  aggregate  amount  equal to the  Limited  Partners'  Capital
Contributions to the Limited Partnership.

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

        "Prior Production Partnership" shall mean a general partnership of which
PW  Production  and Geodyne  Production  are  managing  partners,  and a limited
partnership,  of which  units  of  limited  partnership  interest  were  offered
pursuant to the Prospectus,  is the other general  partner,  formed prior to the
Activation of the Production Partnership.

        "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.

        "Production  Partnership"  shall mean the general  partnership  governed
under and pursuant to this Agreement,  as said general partnership may from time
to time be constituted.

        "Production Partnership Account" shall mean the bank account or accounts
maintained by the Managing Partners pursuant to Section 9.3.

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

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

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

                                      -10-
<PAGE>

        "Property Acquisition Costs" shall mean, without duplication, the sum of
(1) the prices paid by the Production  Partnership  or a Managing  Partner or an
Affiliate  to acquire a Producing  Property  ultimately  sold to the  Production
Partnership,  including the price paid to acquire a purchase option with respect
to a Producing Property, lease bonuses and equipment costs associated therewith;
(2) title  insurance or  examination  costs,  transfer  taxes,  if any, and like
charges in connection  with the acquisition of Producing  Properties;  (3) delay
rentals and ad valorem taxes paid by the seller with respect to such property to
the date of its  transfer to the buyer;  (4) interest  actually  incurred by the
Managing  Partners or their  Affiliates  to acquire or maintain  such  Producing
Properties prior to their transfer to the Production  Partnership;  and (5) such
portion of the  Managing  Partners' or  Affiliates'  reasonable,  necessary  and
actual  expenses  for  geological,   geophysical,  seismic,  land,  engineering,
drafting,  accounting,  auditing,  legal and other like services,  including the
Production Partnership's costs incurred (to the extent consistent with generally
accepted  industry  standards) in connection  with the Production  Partnership's
review of proposed acquisitions of Producing Properties, Reports and Engineering
Audit Letters,  all allocated to the property in accordance  with the allocation
procedures  used  by the  Managing  Partners,  any of  their  Affiliates  or the
Production  Partnership;  provided that the portion of the Managing Partner's or
Affiliates'  expenses allocated to the property,  as set forth in items (3), (4)
and (5),  shall have been incurred not more than 36 months prior to the property
transaction.

        "Prospect"  shall mean an area in which the Production  Partnership owns
or intends  to own one or more oil and gas  interests,  which is  geographically
defined on the basis of  geological  data by the Managing  Partners and which is
reasonably  anticipated  by the  Managing  Partners  to  contain  at  least  one
reservoir.

        "Prospectus" shall mean the prospectus  pursuant to which the Units were
offered, and all supplements or amendments thereto, 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

                                      -11-
<PAGE>

quantities  of  Hydrocarbons  which can be expected,  with little  doubt,  to be
recoverable  commercially at current prices and 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  Nonproducing  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.  Proved  reserves for other undrilled units
        are claimed only where it can be demonstrated with reasonable 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

                                      -12-
<PAGE>

        techniques to be employed have been proved  effective by actual tests in
        the same area and reservoir.

        "PW Production" shall mean PW Production Inc., a Delaware corporation.

        "Remove",  "Removed"  or  "Removal"  shall mean,  with  reference to the
removal of a Managing Partner, the termination of the management powers,  duties
and  responsibilities  of such Managing  Partner pursuant to Section 6.2 of this
Agreement and the removal of such Managing 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  Production
Partnership of any Production Partnership Property.

        "State" shall mean the State of Oklahoma.

        "Subscription   Agreement   and  Power  of  Attorney"   shall  mean  the
Subscription  Agreement  and  Power  of  Attorney  in the form  attached  to the
Prospectus.

        "Substituted  Partner" shall mean any Person  admitted to the Production
Partnership as a Partner pursuant to Sections 7.3 and 10.2 of this Agreement.

        "Unit" shall mean a $1,000  investment in the Limited  Partnership  by a
Limited Partner  pursuant to the terms of a Subscription  Agreement and Power of
Attorney; provided, however, that fractional Units may be acquired to the extent
provided under Section 5.lB of the Limited Partnership Agreement.

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

                                      -13-
<PAGE>

                                   ARTICLE TWO
             Continuation; Name, Place of Business and Office; Term
             ------------------------------------------------------

        Section 2.1.  Continuation
        --------------------------

        The parties hereto hereby  continue the general  partnership  heretofore
formed  pursuant to the provisions of the Act and the rights and  liabilities of
the  Partners  shall be as provided in the Act,  except as  otherwise  expressly
provided in this Agreement.

        Section 2.2.  Name, Place of Business and Office, Agent
        -------------------------------------------------------

        The   Production   Partnership   shall  be  conducted   under  the  name
PaineWebber/Geodyne  Energy Income  Production  Partnership I-F. The business of
the  Production  Partnership  may,  however,  be conducted  under any other name
deemed  necessary or desirable by the Managing  Partners in order to comply with
applicable  laws.  The office and principal  place of business of the Production
Partnership shall be c/o Geodyne  Production  Company,  320 South Boston Avenue,
The Mezzanine, Tulsa, Oklahoma 74103-3708. The Managing Partners shall record an
assumed name or fictitious  name  certificate  in the State and in each state in
which it owns  property  or  transacts  business  when deemed  necessary  by the
Managing Partners.

        The Managing Partners 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 Production  Partnership shall be changed,  the Managing
Partners shall give written notice thereof to the Limited Partners.

                                      -14-
<PAGE>

        Section 2.3   Purpose
        ---------------------

        The  business  and  purpose of the  Production  Partnership  shall be to
acquire,  own,  hold,  operate,  explore,  develop,  trade,  sell  and  exchange
Hydrocarbon  properties and interests  therein of all kinds onshore and offshore
in the continental United States,  including,  without limitation,  interests in
general or limited partnerships,  joint ventures and other entities that hold or
are formed to acquire  interests in such  properties or interests;  to engage in
development  drilling  and enhanced  recovery  operations  thereon,  to produce,
transport,  market,  purchase and trade  Hydrocarbons and products  thereof;  to
purchase, lease, own, hold, operate, sell and exchange all equipment, machinery,
facilities, systems and plans necessary or appropriate for such purposes; and to
do any and all things  necessary or proper in connection with or incident to the
foregoing activities.

        Section 2.4.  Term
        ------------------

        The  Production  Partnership  shall  continue in force and effect  until
December 31, 1999,  provided that the Management  Committee may extend such term
for up to five periods of two years each,  or until  dissolution  prior  thereto
pursuant to the provisions hereof.

                                  ARTICLE THREE
                              Partners and Capital
                              --------------------

        Section 3.1.  Managing Partners
        -------------------------------

        A. The  names,  addresses  and  Capital  Contributions  of the  Managing
Partners  are set forth in  Schedule  A  attached  hereto  and are  incorporated
herein.  The  Managing  Partners  shall  not be  required  to make  any  Capital
Contribution except as set forth in Sections 3.lB, 3.4 and 8.2C.

        B. The  Managing  Partners  shall  also  contribute  an  amount  of cash
sufficient to pay their share of costs allocated to them pursuant to Section 5.3
of this  Agreement  to the extent  that the amount of Income  allocated  to them
(and/or  the  amount of  Production  Partnership  borrowings  incurred  on their
behalf) is insufficient to pay such costs.

                                      -15-
<PAGE>

        Section 3.2.  Other General Partner
        -----------------------------------

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

        Section 3.3.  Application of Capital Contributions
        --------------------------------------------------

        The  Managing  Partners  shall  deposit  in the  Production  Partnership
Account the Capital  Contributions  of the Limited  Partnership and the Managing
Partners and apply such Capital Contributions to the payment of Organization and
Offering Costs and the Management Fee. The balance of such Capital Contributions
shall be held in the Production Partnership Account to be applied to the payment
of  Property  Acquisition  Costs and, to the extent not payable out of Income or
Investment Income,  Operating Costs,  General and Administrative  Costs,  Direct
Administrative Costs and other Production Partnership costs; provided,  however,
that such funds may be  temporarily  invested prior to the payment of such costs
in accordance with Section 9.3 of this Agreement.

        Section 3.4.  Certain Returns of Capital
        ----------------------------------------

        Any  portion of the  Capital  Contribution  of the  Limited  Partnership
(except for necessary  operating  capital) that has not been expended or that is
not, or in the determination of the Managing Partners, will not be committed for
expenditure  by the  second  anniversary  of the  Activation  of the  Production
Partnership will promptly be refunded to the Limited  Partnership as a return of
part of its Capital  Contribution  at the earlier of such  determination  or the
second anniversary of the Activation of the Production  Partnership.  Such funds
will be deemed to have been committed for expenditure by such date to the extent
they are payable under  contractual  agreements or  understandings  in effect on
such date, or have been applied to a reasonable  working capital reserve or have
been set  aside as a  condition  to  obtaining  any  financing  in the form of a
compensating balance or similar arrangement.  In addition, the Managing Partners
shall contribute cash to the Production Partnership (with respect to which their
Capital Accounts will be credited) in an amount equal to the amount paid to the

                                      -16-
<PAGE>

Managing   Partners  in  respect  of  the  Management  Fee  attributable  (on  a
proportionate  basis) to the  unexpended  amount  of  Capital  Contributions  so
refunded,  which cash shall be refunded to the Limited Partnership together with
the unexpended  Capital  Contributions  so refunded.  Geodyne  Production and PW
Production  shall be responsible for the obligation of the Managing  Partners to
contribute  cash to the Production  Partnership  pursuant to this Section 3.4 in
the relative  percentages which they allocated between themselves the payment of
the  Management  Fee  pursuant  to Section  5.2.  All amounts so refunded to the
Limited Partnership shall reduce dollar for dollar its Capital Account.

        Section 3.5.  Production Partnership Capital
        --------------------------------------------

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

        B. The Production  Partnership shall not redeem any Partner's  Interest.
Except as provided in  Sections  3.4,  6.1,  6.2 and 8.2 of this  Agreement,  no
Partner  shall have the right to  withdraw  or receive any return of the Capital
Contribution.   Under   circumstances   involving   a  return  of  any   Capital
Contribution, no Partner shall have the right to receive any property other than
cash,  except as may  otherwise be provided in Sections 6.1, 6.2 and 8.2 of this
Agreement.

        Section 3.6.  Liability of Partners
        -----------------------------------

        Each Partner signatory hereto or subsequently admitted to the Production
Partnership  agrees that it shall remain  generally liable for any obligation or
recourse liability of the Production  Partnership  incurred during the period in
which it is a Partner.  However,  all present and future  Partners  hereby agree
among  themselves to  contribute to each other the amount of funds  necessary to
effectuate a sharing of such  Production  Partnership  obligations  and recourse
liabilities  in  proportion  to each  Partner's  share of such  obligations  and
liabilities at the time of their accrual.

                                      -17-
<PAGE>

                                  ARTICLE FOUR
                          Rights, Powers and Duties of
                          ----------------------------
                              The Managing Partners
                              ---------------------

        Section 4.1.  Management and Control of the Production Partnership
        ------------------------------------------------------------------

        A. Subject to Section 4.lC of this  Agreement  and to the Consent of the
Limited  Partnership  as and  when  required  by this  Agreement,  the  Managing
Partners,  within the authority granted to them 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 Production  Partnership  and to make
all decisions  regarding the business of the  Production  Partnership  and shall
have all of the rights, powers and obligations of managing general partners of a
general  partnership  under the laws of the State.  The Managing  Partners shall
exercise those powers as a fiduciary to the Limited Partnership.

        B. No other Partner shall  participate  in the management of or have any
control over the Production  Partnership's  business nor shall any other Partner
have the power to represent,  act for, sign for or bind the Managing Partners or
the  Production  Partnership.  The Limited  Partnership  hereby  Consents to the
exercise  by the  Managing  Partners  of the  powers  conferred  on them by this
Agreement.

        C.  The  Managing  Partners'   management   authority  with  respect  to
significant  Production Partnership actions shall be exercised by the Management
Committee,  including without limitation such actions as: (i) the acquisition of
a Producing  Property or an option to  purchase a Producing  Property,  provided
that Geodyne Production shall have the authority to acquire

                                      -18-
<PAGE>

Producing  Properties and options to acquire  Producing  Properties  without the
approval  of  the  Management  Committee,  provided  further  that  (a)  Geodyne
Production does not expend an aggregate amount of Production  Partnership  funds
with  respect  to  the  acquisition  of  Producing  Properties  whose  aggregate
acquisition price,  together with the anticipated aggregate acquisition price of
Producing  Properties  subject to such purchase options,  is in excess of 20% of
the Limited Partnership's Capital Contribution, and (b) no single acquisition of
Producing Properties by Geodyne Production pursuant to this proviso shall exceed
10% of the Limited Partners' capital  contributions to the Limited  Partnership;
(ii) the incurrence of  indebtedness;  (iii) the  determination of the amount of
and the distribution of Distributable Cash to the Partners; (iv) the engaging in
and making  decisions  with  respect  to any  Development  Drilling,  Identified
Development  Drilling and Improved  Recovery  operations;  (v) the sale or other
transfer of any Producing Property that constitutes a significant portion of the
assets of the Production  Partnership;  and (vi) the determination not to extend
the term of the  Production  Partnership  as set  forth in  Section  2.4 of this
Agreement.  The  Management  Committee  shall  have the  power to  delegate  its
management  authority  with  respect to any  "significant"  action to a Managing
Partner  at such  times and under  such  conditions  as it may decide in its own
discretion.

        The Managing Partners' management authority respecting all other actions
which are in the ordinary course of the Production  Partnership's operations may
be exercised by either  Managing  Partner  without the  concurrence of the other
Managing Partner,  provided that the Managing Partner exercising such management
authority  shall,  upon  inquiry  by the  other  Managing  Partner,  notify  the
inquiring  Managing Partner of the nature of such actions undertaken without the
concurrence of the inquiring  Managing Partner.  The Management  Committee shall
have the authority (i) to determine  that the  "significant"  actions  specified
herein shall no longer be "significant" actions for the purposes of this Section
4.1C and to amend this Agreement  pursuant to Section l0.1A of this Agreement to
reflect  such  determination,  and  (ii) to  determine  which  other  Production
Partnership  operations,  other than those specified  herein,  are "significant"
actions for purposes of this Section 4.1C.

                                      -19-
<PAGE>

        Section 4.2.  Authority of the Managing Partners
        ------------------------------------------------

        A. In  addition  to any other  rights  and  powers  which  the  Managing
Partners may possess  under this  Agreement  and the Act, the Managing  Partners
shall,  except and subject to the extent  otherwise  provided or limited in this
Agreement,  have all specific rights and powers required or appropriate to their
management  of  the  Production   Partnership's   business   which,  by  way  of
illustration  but not by way of limitation,  shall include the following  rights
and powers to:

            (i) expend  the  Capital  Contributions  of the  Partners  and apply
      Production   Partnership  revenues,   subject  to  Section  4.3C  of  this
      Agreement, in furtherance of the business of the Production Partnership;

            (ii)  acquire,  explore,  develop,  manage and  operate  Hydrocarbon
      properties and interests therein (including  interests in corporations and
      partnerships  owning  Hydrocarbon  properties if in the Managing Partners'
      judgment  such  purchase is a necessary  or  advisable  step in  acquiring
      interests  in  producing  properties  held  by  any  such  corporation  or
      partnership,  provided,  no such  purchase will be made for the purpose of
      investment in the securities of any such  corporation or partnership,  the
      Production Partnership will not conduct or participate in a hostile tender
      offer,  and no such purchase  will be made unless there is assurance  that
      sufficient  control of the  corporation or partnership  can be obtained in
      the initial acquisition to liquidate it, and it is determined the purchase
      would not thereby render the Production  Partnership an investment company
      within the meaning of the  Investment  Company Act of 1940,  and  provided
      further the Production  Partnership's interest in the underlying assets of
      any such  corporation  or  partnership is distributed as soon as practical
      thereafter to the Production  Partnership in redemption for the Production
      Partnership's  interest in such  corporation or  partnership) of all kinds
      and acquire units of limited partnership  interest tendered to the General
      Partners  pursuant  to the  terms of any right of  presentment  of a Prior
      Limited  Partnership  (as  defined in the Limited  Partnership  Agreement)
      (provided  that the Production  Partnership  shall not expend an aggregate
      amount in excess of 10% of the Limited  Partnership's Capital Contribution
      to acquire such units) and hold all such property, interests and units in

                                      -20-
<PAGE>

      the  name  of the  Production  Partnership;  provided,  however,  that  in
      connection therewith, the Managing Partners shall,  contemporaneously with
      the  acquisition  of a  Producing  Property,  or as  soon  as  practicable
      thereafter,  file or cause  to be filed  for  recordation  an  appropriate
      conveyance or agreement evidencing the Production  Partnership's  interest
      in such  Producing  Property  in the  jurisdiction  where  such  Producing
      Property is located  pursuant to such  jurisdiction's  Uniform  Commercial
      Code and/or in the real  property  records of the clerk or recorder of the
      county  in which  the  Producing  Property  is  situated;  and,  provided,
      further, that filings of such conveyances or agreements shall also be made
      as the Managing  Partners  believe  necessary to establish the  Production
      Partnership's  priority of interest;  and,  provided,  further,  Producing
      Properties  may be  held  temporarily  in the  name of a  nominee  for the
      Production  Partnership if such action is deemed necessary by the Managing
      Partners to facilitate acquisition;

            (iii) execute such  instruments and agreements,  to do such acts, to
      employ  such  persons and to contract  for such  services as the  Managing
      Partners  determine are necessary or appropriate to conduct the Production
      Partnership's  business,  including  (x) the  employment  of any  Managing
      Partner or any Affiliate as an operator,  (y) the entering into management
      and  advisory  contracts,  and (z)  the  establishment  of the  Management
      Committee to  exercise,  pursuant to Section  4.lC of this  Agreement,  or
      supervise the exercise of the Managing  Partners' powers set forth in this
      Agreement,  subject to any  restrictions  contained in the Act and in this
      Agreement,  and to provide for any reasonable  compensation  to be paid to
      the Persons comprising the Management Committee pursuant to such contracts
      as the Managing Partners shall deem necessary and appropriate;

            (iv) execute, in the name of the Production  Partnership,  contracts
      for the sale of  Hydrocarbons  and division  orders and transfer orders as
      necessary  or  incident  to  the  sale  of  production  on  behalf  of the
      Production Partnership;

                                      -21-
<PAGE>

            (v)  produce,  treat,  transport  and market  Hydrocarbons,  execute
      processing contracts,  transportation  contracts, and enter into contracts
      for the marketing or sale of Hydrocarbons  and other marketing  agreements
      in the name of the Production Partnership, whether or not extending beyond
      the term of the Production Partnership;

            (vi) execute offers for United States and any state Leases on behalf
      of the Production  Partnership;  execute and file requests for approval of
      assignments  of interests in United States and any state Leases,  together
      with any and all contracts for the option, sale or purchase of such Leases
      or the sale or purchase of any products therefrom; to execute any plans of
      development  under unit  agreements,  conveyances,  subleases,  mortgages,
      deeds of trust, affidavits or reports concerning the drilling of wells and
      production,  designations of operator,  Lease bonds,  operator's bonds and
      consents of surety; and in general to do all things necessary or desirable
      on behalf of the  Production  Partnership  regarding  any United States or
      state Leases or offers therefor;  provided,  however,  that the Production
      Partnership shall have the authority to acquire or otherwise deal with any
      such interests  respecting  Leases  located in "offshore  waters" (as that
      term is  generally  understood  in the oil and gas  industry)  only on the
      condition that the  Production  Partnership  shall not  participate in any
      Development  Drilling or  Identified  Development  Drilling  in  "offshore
      waters" which are not state-owned waters;

            (vii) enter into any partnership agreement,  sharing arrangement, or
      joint  venture with any Person  acceptable  to the  Managing  Partners and
      which is engaged in any business or  transaction  in which the  Production
      Partnership  is  authorized  to  engage,   provided  that  the  Production
      Partnership shall not be deemed thereby to be an "investment  company" for
      purposes of the Investment Company Act of 1940, as amended;

            (viii)   enter  into  and  execute   drilling   contracts,   Farmout
      agreements,   operating  agreements,   unitization   agreements,   pooling
      agreements,  unit or pooling designations,  recycling contracts, dry hole,
      bottom hole and acreage contribution letters and agreements, participation
      agreements,   agreements   and   conveyances   respecting   rights-of-way,
      agreements respecting surface and

                                      -22-
<PAGE>

      subsurface  storage and any other agreements  customarily  employed in the
      oil and gas  industry in  connection  with the  acquisition,  exploration,
      development,  operation,  or  abandonment  of any Leases,  and any and all
      other  instruments or documents  considered by the Managing Partners to be
      necessary  or  appropriate  to  conduct  the  business  of the  Production
      Partnership;

            (ix) pay or elect not to pay delay rentals on Production Partnership
      Properties as  appropriate  in the judgment of the Managing  Partners,  it
      being understood that the Managing Partners will not be liable for failure
      to make  correct or timely  payments of delay  rentals if such failure was
      due to any reason other than negligence or lack of good faith;

            (x) subject to Section 4.3B of this Agreement,  abandon or otherwise
      dispose  of any  interest  in  Hydrocarbon  properties  acquired  for  the
      Production  Partnership upon such terms and for such  consideration as the
      Managing Partners may determine;

            (xi) sell production  payments payable out of all or any part of any
      one or  more  of  the  Producing  Properties  acquired  by the  Production
      Partnership and to devote and expend the proceeds of any such sale for any
      of the purposes of the  Production  Partnership  for which the proceeds of
      borrowings may be applied;

            (xii) borrow  monies from time to time,  for the purpose and subject
      to the limitations  stated in Section 4.3C of this Agreement,  in the form
      of recourse or nonrecourse borrowings, or otherwise to draw, make, execute
      and  issue   promissory   notes  and  other  negotiable  or  nonnegotiable
      instruments and evidences of  indebtedness,  and to secure the payments of
      the sums so borrowed  and to mortgage,  pledge,  or assign in trust all or
      any  part  of  Production   Partnership   Property,   including  Producing
      Properties, production and proceeds of production, or to assign any monies
      owing or to be owing to the Production  Partnership,  and to engage in any
      other means of financing  customary in the petroleum  industry;  provided,
      however,  that a creditor who makes a nonrecourse  loan to the  Production
      Partnership  shall not 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 Production Partnership other than as a secured creditor;

                                      -23-
<PAGE>

            (xiv) invest Capital  Contributions  temporarily in the  investments
      set forth in Section 9.3 of this Agreement;

            (xv)  employ  on  behalf  of  the  Production   Partnership  agents,
      employees, accountants, lawyers, geologists,  geophysicists,  landpersons,
      clerical help, and such other assistance and consulting and other services
      as may deem necessary or convenient and to pay therefor such  remuneration
      as the Managing Partners may deem reasonable and appropriate;

            (xvi) purchase,  lease, rent, or otherwise acquire or obtain the use
      of machinery,  equipment,  tools, materials, and all other kinds and types
      of real or  personal  property  that may in any way be  deemed  necessary,
      convenient,  or advisable in  connection  with carrying on the business of
      the Production Partnership, purchase and establish adequate inventories of
      equipment  and material  required or expected to be required in connection
      with its operations,  dispose of tangible lease and well equipment for use
      or used in connection with Production  Partnership Property,  and to incur
      expenses for travel, telephone,  telegraph,  insurance, and for such other
      things,  whether  similar or  dissimilar,  as may be deemed  necessary  or
      appropriate  for carrying on and performing the business of the Production
      Partnership;

            (xvii) enter into such  agreements  and contracts  with such parties
      and to give such receipts,  releases,  and discharges  with respect to any
      and all of the foregoing and any matters  incident thereto as the Managing
      Partners may deem advisable or appropriate;

            (xviii)  guarantee  the payment of money or the  performance  of any
      contract or obligation by any person,  firm, or  corporation  on behalf of
      the Production Partnership;

            (xix) sue and be sued, complain and defend in the name and on behalf
      of the Production Partnership;

            (xx) make such  classifications  and  determinations as the Managing
      Partners  deem  advisable,  having due regard for any  relevant  generally
      accepted accounting principles and oil and gas industry practices;

                                      -24-
<PAGE>

            (xxi) purchase insurance,  or extend the Managing Partners' or their
      Affiliates' insurance, at the Production Partnership's expense, to protect
      the  Production  Partnership  Property and the business of the  Production
      Partnership  against loss,  and to protect the Managing  Partners  against
      liability  to  third  parties   arising  out  of  Production   Partnership
      activities,  such  insurance to be in such  limits,  to be subject to such
      deductibles  and to  cover  such  risks  as  the  Managing  Partners  deem
      appropriate;

            (xxii) pay all ad  valorem  taxes  levied or  assessed  against  the
      Production  Partnership  Properties,  all taxes  upon or  measured  by the
      production  of  Hydrocarbons  therefrom,  and all other taxes  (other than
      income taxes) directly  related to operations  conducted by the Production
      Partnership;

            (xxiii)  enter  into   agreements   on  behalf  of  the   Production
      Partnership  with  Affiliates  subject  to the  limitations  set  forth in
      Section 4.3B of this Agreement;

            (xxiv) sell all or  substantially  all of the  properties  and other
      assets  of the  Production  Partnership  to  themselves,  or any of  their
      Affiliates  or  any  other  person  and  to  receive  for  the  Production
      Partnership  consideration consisting of cash, securities,  other property
      or any other form of consideration,  or any combination  thereof,  at such
      prices  and for  such  forms  of  consideration  as they  deem in the best
      interests of the Limited Partners;  provided,  however,  that no such sale
      shall be consummated  without the prior Consent of the Limited Partnership
      pursuant to the provisions of Section 4.4B of this Agreement. In the event
      of the dissolution of the Production Partnership followed by any such sale
      of the  Production  Partnership's  assets,  the Managing  Partners  shall,
      subject to the provisions of Section 8.2 of this  Agreement,  be appointed
      the liquidating agents for the Production Partnership;

            (xxv)  make,  exercise or deliver  any  general  assignment  for the
      benefit of the Production Partnership's creditors, but only upon the prior
      Consent of the Limited  Partnership  pursuant to the provisions of Section
      4.4B of this Agreement;

                                      -25-
<PAGE>

            (xxvi) take such other  action and perform such other acts as may be
      deemed   appropriate   to  carry  out  the  business  of  the   Production
      Partnership; and

            (xxvii) inform each other Partner of all administrative and judicial
      proceedings  for an adjustment  at the  Production  Partnership  level for
      partnership  tax items and forward to each other Partner 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  judgment,  and Geodyne Production shall perform all duties
      imposed by  Sections  6221  through  6232 of the Code as the "tax  matters
      partner" of the Production 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
      Production   Partnership  items;  the  power  to  extend  the  statute  of
      limitations  for all Partners with respect to Production  Partnership  tax
      items;  and (b) the power to file a petition with an  appropriate  federal
      court for review of a final partnership administrative adjustment. Geodyne
      Production   shall  consult  with  PW  Production   with  respect  to  the
      performance of its duties as "tax matters partner."

      B. Reliance by Third Parties on Managing Partners'  Authority.  No person,
firm or corporation dealing with the Production Partnership shall be required to
inquire  into the  authority  of the  Managing  Partners 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 Managing  Partners
as to their due authorization.

      Section 4.3.  Sales, Purchases and Operation of Producing Properties;
                    Additional Financing
      ---------------------------------------------------------------------

      A. Except with respect to Producing  Properties  whose aggregate  purchase
price does not exceed 10% of the Limited Partners' capital  contributions to the
Limited  Partnership,  no Producing Property shall be acquired by the Production
Partnership  unless there has been prepared and evaluated  with respect  thereto
either an Acquisition  Reserve Report or an Engineering  Audit Letter acceptable
to the Management Committee;

                                      -26-
<PAGE>

      B. Neither the Managing Partners nor any Affiliate shall sell, transfer or
convey any or all of their  interest in Producing  Properties to the  Production
Partnership  or purchase or acquire any oil and gas  properties or interest from
the  Production  Partnership,   directly  or  indirectly,   except  pursuant  to
transactions  that are fair and reasonable to the Limited  Partnership under the
circumstances  at the time such  transaction is consummated.  Such  transactions
shall be further subject to the following restrictions:

            (i)  Prior to the  date on  which  the  Production  Partnership  has
      acquired its final Producing  Property,  neither the Managing Partners nor
      any Affiliate of a Managing  Partner  (other than an  Affiliated  Program)
      shall  acquire  any  Producing   Property  after  the  Activation  of  the
      Production  Partnership  unless prior thereto the  Production  Partnership
      shall have been offered the right to acquire such Producing  Property,  or
      an interest  therein,  and the Management  Committee shall have determined
      that the acquisition of such Producing  Property,  or an interest therein,
      is not in the best interests of the Production Partnership;

            (ii)  Any  purchase  or sale of a  Producing  Property  from or to a
      Managing   Partner  or  any  Affiliate  shall  be  made  at  the  Property
      Acquisition  Cost for such Producing  Property as adjusted for intervening
      operations,  unless the Managing  Partner or such Affiliate has reasonable
      grounds  to  believe  that cost is  materially  more or less than the fair
      market value of such  property,  in which case such sale or purchase shall
      be made at a price equal to the fair market value thereof as determined by
      an independent petroleum engineer;

            (iii) If a Managing Partner sells, transfers or conveys any oil, gas
      or other mineral interests or property to the Production  Partnership,  it
      must,  at the  same  time,  sell to the  Production  Partnership  an equal
      proportionate  interest in all its other property in the same Prospect.  A
      Sale or conveyance to the  Production  Partnership of less than the entire
      ownership  interest  of a  Managing  Partner  or  any  Affiliate  is  only
      permitted  if: (a) the  interests  retained or  obtained  by the  Managing
      Partners or  Affiliate  and  acquired by the  Production  Partnership  are
      either (x)  proportionate,  uniform and undivided Working Interests if the
      Producing Property

                                      -27-
<PAGE>

      acquired  by the  Production  Partnership  is a  Working  Interest  or (y)
      proportionate,  uniform and undivided  Royalty  Interests if the Producing
      Property  acquired by the  Production  Partnership  is a Royalty,  (b) the
      respective  obligations  of the  Managing  Partners or  Affiliate  and the
      Production Partnership are substantially the same, and (c) the interest of
      the Managing  Partners or their Affiliates in revenues does not exceed the
      amount  proportionate to their interest.  The Managing  Partners and their
      Affiliates  may not retain or obtain any overrides or other burdens on the
      interest  obtained by the Production  Partnership,  and may not enter into
      any  Farmouts  with  respect  to  their  retained   interest,   except  to
      nonaffiliated third parties or to an Affiliated Program;

            (iv) In the event a Managing  Partner or any  Affiliate  proposes to
      acquire  an  interest  in a  Producing  Property  in which the  Production
      Partnership  has an interest or in a Producing  Property  abandoned by the
      Production   Partnership   within  one  year   preceding   such   proposed
      acquisition,  such Managing  Partner or Affiliate shall offer the interest
      to the Production  Partnership;  and if cash or financing is not available
      to the  Production  Partnership  to purchase such  interest,  neither such
      Managing Partner nor Affiliate shall acquire an interest in such Producing
      Property.  The term "abandon" for the purpose of this  subparagraph  shall
      mean the  termination,  either  voluntary  or by operation of the Lease or
      otherwise,  of  all  of  the  Production  Partnership's  interest  in  the
      Producing  Property.  This  subsection  shall not apply after the lapse of
      five  years of the  Activation  of the  Production  Partnership  or to any
      Affiliated  Program  where the interest of such  Managing  Partner is less
      than or equal to its interest in the Production Partnership,  there are no
      duplication of fees to the Managing Partners, and the Managing Partners do
      not  obtain  a  greater  benefit  from  purchase  of the  interest  by the
      Affiliated  Program than they would if the interest were  purchased by the
      Production Partnership;

            (v) During the existence of the Production Partnership and before it
      has  ceased  operations,   neither  Managing  Partner  nor  any  Affiliate
      (excluding  any  Affiliated  Program  where the interest of such  Managing
      Partner  is  less  than  or  equal  to  its  interest  in  the  Production
      Partnership)  shall  acquire,  retain or drill for its own account any oil
      and gas interest in any Prospect

                                      -28-
<PAGE>

      upon which the Production  Partnership  possesses an interest,  except for
      transactions which comply with Section 4.3B(iii) or 4.8 of this Agreement.
      The  geological  limits of a Producing  Property  owned by the  Production
      Partnership  shall be enlarged or contracted on the basis of  subsequently
      acquired  geological  data to define the productive  limits of a reservoir
      and must include all of the acreage  determined by the subsequent  data to
      be encompassed by such reservoir.  If the geological limits of a Producing
      Property, as so enlarged, encompass any interest held by either a Managing
      Partner or an Affiliate of a Managing  Partner  (excluding  an  Affiliated
      Program  where the  interest of such  Managing  Partner is identical to or
      less than its interest in the Production Partnership), such interest shall
      be sold to the Production Partnership in accordance with the provisions of
      Section 4.3B(iv) of this Agreement and any net income previously  received
      by the Managing  Partner or Affiliate shall be paid over to the Production
      Partnership.   If  a  Managing  Partner  acquires  additional  acreage  or
      interests in a Prospect of the Production  Partnership,  it must sell such
      to the Production  Partnership  and is prohibited  from retaining any such
      interest,  except as may be permitted  by Section 4.3B of this  Agreement.
      Notwithstanding  the  foregoing,  the Production  Partnership  will not be
      required to expend  additional  funds to acquire any such interest  unless
      funds are available from the Capital Contributions of the Partners;

            (vi)  Producing  Properties  may be sold,  Farmed-out  or  otherwise
      transferred from or to an Affiliated Program only pursuant to transactions
      that (a) comply with Sections  4.3B(iii)  and 4.3B(iv) of this  Agreement,
      and (b)  are in  exchange  for  the  transferee's  obligation  to  conduct
      exploratory  drilling,   Development  Drilling,   Identified   Development
      Drilling  or  Improved  Recovery  operations  on  such  properties  or  in
      connection  with the  formation of a joint  venture  among the  Production
      Partnership and such Affiliated  Program,  provided that the  compensation
      arrangement or any other interest or right of the Managing Partners or any
      Affiliate  is  the  same  in the  Production  Partnership  and  Affiliated
      Program,  or, if  different,  the aggregate  compensation  of the Managing
      Partners  does not  exceed the lower of the  compensation  they would have
      received in the Production  Partnership or the Affiliated Program, and the
      terms of such Sale,  Farmout or  transfer  comply with the  provisions  of
      Section 4.8 of this Agreement;

                                      -29-
<PAGE>

            (vii) Any Sale of  inventory or other  materials  by the  Production
      Partnership  to any  Managing  Partner or  Affiliate  shall be made at the
      applicable  rates  set  forth  in the  standard  form  of  the  accounting
      procedure  then  recommended  by  the  Council  of  Petroleum  Accountants
      Societies of North America;

            (viii)  Any  operating  agreements  pursuant  to which any  Managing
      Partner or any Affiliate acts as operator of Producing Properties shall be
      of a nature customary in the industry and payments to any Managing Partner
      or any Affiliate for acting as operator shall not exceed the  compensation
      which would be paid by  unaffiliated  third parties in the same geographic
      area  for  similar  goods  and  services.  Reimbursement  of the  Managing
      Partner's  overhead  pursuant  to such  operating  agreement  will  not be
      duplicative of any reimbursement of General and Administrative  Costs made
      pursuant to Section 5.2 of this Agreement; and

            (ix) To the extent a Managing  Partner or any Affiliate  acquires an
      interest  in a  Producing  Property  in which the  Production  Partnership
      acquires an interest,  such  Managing  Partner or Affiliate  shall pay its
      allocable  portion  of the  cost  of the  preparation  of the  Acquisition
      Reserve Report or Engineering Audit Letter, as the case may be, respecting
      such Producing Property.

      C.  The  Managing  Partners  may  not  expend  any  amount  of  Production
Partnership funds over the term of the Production Partnership for the payment of
Production  Partnership  costs  (other  than  recompletion  costs)  incurred  in
connection  with  Development  Drilling and Identified  Development  Drilling in
excess of 10% of the amount of the Limited  Partners'  capital  contributions to
the  Limited  Partnership  and the  Production  Partnership  borrowings.  If the
Managing Partners determine that funds in addition to the Capital  Contributions
to the  Production  Partnership  are  required  for the  payment  of  Production
Partnership costs (other than Property Acquisition Costs), the Managing Partners
may apply or  reserve  Income  or  Investment  Income  for the  payment  of such
Production  Partnership  costs  and/or  the  Managing  Partners  may  cause  the
Production Partnership to borrow funds for the payment of Production Partnership
costs incurred in connection with Development

                                      -30-
<PAGE>

Drilling,  Identified  Development  Drilling and Improved  Recovery  operations;
provided,  however,  that the  aggregate  outstanding  principal  amount of such
borrowings  shall  not at any one  time  exceed  an  amount  equal to 20% of the
Limited Partners' capital contributions to the Limited Partnership.

        D. Each Managing  Partner shall have the authority to secure the payment
of  borrowings  incurred by it for its own account or for purposes of paying its
allocable share of Production  Partnership  costs by assigning to lenders all or
part of its Managing Partner's  interest in Profits and Distributable  Cash, and
by  granting  such  lenders a security  interest  or  mortgage  in an  undivided
interest  in any  Production  Partnership  Property  not to exceed its  Managing
Partner's percentage interest in Income;  provided,  however,  that the Managing
Partners, in the aggregate,  shall retain unencumbered at least a 1% interest in
each  of  Production  Partnership  Property,  Profits  and  Distributable  Cash.
Notwithstanding  anything to the contrary in this Agreement, in the event of any
sale or  foreclosure  of a  Managing  Partner's  interest  in  full  or  partial
satisfaction of such borrowings,  appropriate  adjustments  shall be made in the
Capital Accounts of the Partners and in the method by which Income and costs are
allocated to the Partners to assure that the Limited  Partnership  and the other
Managing  Partner  will not bear any of the costs  attributable  to such sold or
foreclosed interest and that such Managing Partner will not share or participate
in any of the capital, Income, costs or distributions  attributable to such sold
or  foreclosed  interest  except  to the  extent  of the  unencumbered  interest
retained by such Managing Partner.

       Section 4.4.  Prohibited Transactions
       -------------------------------------

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

            (i) the  Production  Partnership  shall  not  make  any  loans  to a
      Managing Partner or any Affiliate;

              (ii) neither the Managing  Partners nor any  Affiliate  shall make
      any loans to the Production  Partnership  except at a rate of interest not
      in excess of the  interest  cost  incurred  by the  Managing  Partners  or
      Affiliates  or the  amount  of  interest  that  would  be  charged  to the
      Production Partnership (without regard to the Managing Partner's or

                                      -31-
<PAGE>

      Affiliate's  financial  abilities or  guarantees)  by  unrelated  banks on
      comparable  loans  for the  same  purpose,  whichever  is  lower,  and the
      Managing  Partners and  Affiliates  shall not receive  points or financing
      charges or fees regardless of the amount;

              (iii) 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 any  Managing  Partner or any  Affiliate
      shall  be  compensated  by  the  Production  Partnership  for  his  or her
      services;

              (iv) other than those  received for the account of the  Production
      Partnership,  no rebates may be received  by any  Managing  Partner or any
      Affiliate  in  connection  with  Production   Partnership   operations  or
      expenditures, nor may any Managing Partner or any Affiliate participate in
      any  reciprocal  business  arrangement  that would  circumvent  any of the
      provisions of this Agreement;

              (v) on a monthly  basis,  costs paid and  revenues  received  by a
      Managing  Partner  or an  Affiliate  for  the  account  of the  Production
      Partnership  shall be determined  and the net amount  resulting  from such
      monthly  settlement  shall  be  deposited  into a  Production  Partnership
      Account and no funds which, after such monthly settlement,  are determined
      to be held for the account of the Production  Partnership shall be kept in
      any account other than a Production  Partnership Account, and the Managing
      Partners  shall not  employ,  or permit any other  Person to employ,  such
      funds in any manner except for the benefit of the Production  Partnership;
      it being  understood  that the  Managing  Partners  may invest  Production
      Partnership  funds temporarily in the investments set forth in Section 9.3
      of this Agreement pending their use by the Production  Partnership.  After
      such  monthly  settlement,   Production   Partnership  funds  may  not  be
      commingled  with separate  funds of either  Managing  Partner or any other
      entity; and

              (vi) the Limited Partnership shall not make any advance payment to
      the  Managing  Partners or their  Affiliates,  except  where  necessary to
      secure tax benefits of prepaid drilling costs.

                                      -32-
<PAGE>

      B.  Notwithstanding any other provision of this Agreement to the contrary,
without the prior  Consent of the Limited  Partnership  granted  pursuant to the
provisions of Article Eleven of this Agreement and the provisions of the Limited
Partnership Agreement, the Managing Partners shall not:

            (i)  lease,  sell,  or dispose  of all or  substantially  all of the
      Production Partnership's assets;

            (ii)  make,  exercise  or deliver  any  general  assignment  for the
      benefit of the Production Partnership's creditors;

            (iii) except as set forth in Section  l0.1A,  amend any provision of
      this Agreement; or

            (iv) dissolve the Production Partnership.

      Section 4.5.  Other Agreements of the Managing Partners
      -------------------------------------------------------

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

              (i) the Managing  Partners and their Affiliates shall not take any
      action  with  respect  to  the  assets  or  property  of  the   Production
      Partnership which does not benefit exclusively the Production Partnership,
      including:

                  (a)  the  utilization  of  Production   Partnership  funds  as
            compensating balances for the benefit of the Managing Partners or an
            Affiliate of a Managing Partner; and

                  (b) the commitment of future production;

              (ii)  all   benefits   from   marketing   arrangements   or  other
      relationships  affecting property of any Managing Partner or its Affiliate
      and the Production  Partnership shall be fairly and equitably  apportioned
      according to the respective interests of each;

            (iii) the  Managing  Partners may never  profit  themselves  nor any
      Affiliate by  Development  Drilling,  Identified  Development  Drilling or
      Improved   Recovery   operations  in   contravention  of  their  fiduciary
      obligation to the Limited Partnership; and

                                      -33-
<PAGE>

              (iv) neither the Managing  Partners nor any Affiliate shall render
      to the Production Partnership any oil field, equipage or drilling services
      nor sell or lease to the Production  Partnership  any equipment or related
      supplies unless:

                  (a) such Person is engaged,  independently  of the  Production
            Partnership and as an ordinary and ongoing business, in the business
            of rendering  such services or selling or leasing such equipment and
            supplies to a substantial extent to other Persons in the oil and gas
            industry in addition to drilling  and income  programs in which such
            Person has an interest;

                  (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 Production Partnership;

                  (c)   the drilling  services  are billed on either a per foot,
            per day or per hour rate, or some combination thereof; and

                  (d) provided that, if such Person 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 such  Person or the  competitive  rate which could be obtained in
            the area, whichever is less.

      Section 4.6.  Construction of Gas Gathering Lines
      -------------------------------------------------

      The Managing  Partners may cause the  Production  Partnership to construct
gas  gathering  lines if, in the opinion of the Managing  Partners,  it would be
economically  feasible and otherwise  consistent with prudent operating practice
to do so. The costs of any such  gathering  lines will be deemed to be Operating
Costs and shall be charged to the accounts of the Partners as such. The Managing
Partners  may,  in their  discretion,  construct,  or cause  an  Affiliate  of a
Managing  Partner or other person to construct,  gathering lines from Production
Partnership Wells to gas transmission systems.

                                      -34-
<PAGE>

Whenever the Managing  Partners  construct,  or cause an Affiliate of a Managing
Partner to construct,  a gathering line from a Production  Partnership Well to a
gas  transmission  system,  the  Production  Partnership  shall pay the Managing
Partners or such  Affiliate an amount that is not greater than the  compensation
that an  unrelated  party  could  have  reasonably  charged  in an  arm's-length
transaction  for  similar  services  in the area as a  transmission  fee for the
transmission  of all gas through the  gathering  system so  constructed,  and no
other  transmission  fee  shall  be  paid  to the  Managing  Partners  or to any
Affiliate.

      Section 4.7.  Contracts with the Managing Partners and Affiliates
      -----------------------------------------------------------------

      All services provided to the Production  Partnership by a Managing 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 contract  relating to a transaction  between the
Production Partnership and any Managing Partner or any Affiliate shall contain a
provision  which shall  permit  termination  of the  contract by the  Production
Partnership  without  penalty on 30 days'  prior  written  notice.  The  Limited
Partnership  shall have the power to terminate,  without  cause or penalty,  any
such contract on behalf of the Production Partnership.

       Section 4.8.  Farmouts
       ----------------------

      The  Management  Committee may dispose of Producing  Properties by Sale or
Farmout  when the  Management  Committee,  exercising  the standard of a prudent
operator,  determines that (a) the Production Partnership lacks sufficient funds
to conduct Development  Drilling,  Identified  Development  Drilling or Improved
Recovery  operations on the  properties and cannot obtain  suitable  alternative
financing for such  Development  Drilling,  Identified  Development  Drilling or
Improved Recovery operations;  (b) the properties have been downgraded by events
occurring  after  assignment  to the  Production  Partnership  to the point that
additional  Development  Drilling,  Identified  Development  Drilling,  Improved
Recovery operations or continued  production would no longer be desirable to the
Production  Partnership;   (c)  Development  Drilling,   Identified  Development
Drilling or Improved  Recovery  operations on the properties  would result in an
excessive concentration of Production Partnership funds on a

                                      -35-
<PAGE>

Producing Property creating, in the opinion of the Management  Committee,  undue
risk to the Production Partnership;  or (d) the best interests of the Production
Partnership would be served by the Sale or Farmout.  The Production  Partnership
shall not conduct any  drilling of wells  other than  Development  Drilling  and
Identified Development Drilling;  provided,  however, that the drilling of wells
other than  Development  Drilling  and  Identified  Development  Drilling may be
performed on behalf of the Production Partnership pursuant to Farmouts.  Neither
the Managing  Partners nor any  Affiliate  shall enter into any Farmout or other
agreement with the Production Partnership where in consideration for services to
be rendered,  an interest in production  is payable to the Managing  Partners or
any Affiliate,  unless the  Production  Partnership  has previously  expended or
committed to expend the maximum amount that is authorized to use for Development
Drilling  or  Identified  Development  Drilling.  Any Sale,  Farmout  or similar
agreement between the Production  Partnership and a Managing Partner,  Affiliate
or Affiliated Program will be permitted under the restrictions set forth in this
Article Four and will be subject to the following conditions:

               (i)  the  Management   Committee  (or  a  Managing  Partner,   if
      management  authority of the Production  Partnership  with respect thereto
      has been  delegated  to it by the  Management  Committee)  exercising  the
      standard of a prudent operator,  shall determine that the Sale, Farmout or
      similar agreement is in the best interests of the Production  Partnership;
      and

              (ii) the terms of the  Sale,  Farmout  or  similar  agreement  are
      consistent  with and in any case no less  favorable than those utilized in
      the same geographic area for similar arrangements.

      Section 4.9.  Other Operations
      ------------------------------

      The Managing Partners and the Management  Committee shall devote such time
to  the  Production  Partnership  as is  reasonably  required  to  carry  on the
Production  Partnership  business,  and the  Managing  Partners,  members of the
Management Committee and their Affiliates shall at all times be free, subject to
any restrictions  contained herein, to engage in all aspects of the Hydrocarbons
and natural  resources  business  for their own accounts and for the accounts of
others. Without limiting the generality of the foregoing,  the Managing Partners
and their Affiliates shall have the right to organize and operate other

                                      -36-
<PAGE>

partnerships, joint ventures or other oil and gas investment programs similar to
the Limited Partnership and the Production Partnership.

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

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

      B. In any threatened,  pending or completed action,  suit or proceeding to
which the Managing  Partners are a party or are threatened to be made a party by
reason  of the  fact  that  they are the  Managing  Partners  of the  Production
Partnership  (other  than  an  action  by or in  the  right  of  the  Production
Partnership)  involving an alleged cause of action for damages  arising from the
performance of their duties under this Agreement or other activities relative to
the management and  disposition of Producing  Properties or production from such
properties,  the Production  Partnership  shall indemnify the Managing  Partners
against  expenses,  including  attorneys'  fees,  judgments  and amounts paid in
settlement,  actually and  reasonably  incurred by them in connection  with such
action,  suit or  proceeding  if they acted in good  faith and in a manner  they
reasonably  believed to be in the best interests of the Production  Partnership,
and provided that their conduct does not  constitute  negligence or  misconduct.
The  termination  of any  action,  suit or  proceeding  by  judgment,  order  or
settlement shall not of itself create a presumption  that the Managing  Partners
did not act in good faith and in a manner which they  reasonably  believed to be
in the best interests of the Production Partnership.

      C. In any  threatened,  pending or  completed  action or suit by or in the
right of the Production Partnership,  to which the Managing Partners are a party
or are  threatened  to be made a party,  involving an alleged cause of action by
the Limited Partnership for damages arising from the activities of the

                                      -37-
<PAGE>

Managing  Partners in the  management of the internal  affairs of the Production
Partnership  as prescribed in this  Agreement or by law, or both, the Production
Partnership shall indemnify the Managing  Partners against  expenses,  including
attorneys' fees, actually and reasonably incurred by them in connection with the
defense or  settlement of such action or suit if they acted in good faith and in
a manner they reasonably  believed to be in the best interests of the Production
Partnership  as specified  in this  subsection,  except that no  indemnification
shall be made in respect of any claim,  issue or matter as to which the Managing
Partners' course of conduct constituted negligence or misconduct.

      D. To the extent that a Managing Partner has been successful on the merits
or  otherwise  in defense  of any  action,  suit or  proceeding  referred  to in
Sections 4.l0B or 4.l0C of this Agreement,  or in defense of any claim, issue or
matter  therein,  the  Production  Partnership  shall  indemnify  it against the
expenses,  including  attorneys' fees, actually and reasonably incurred by it in
connection therewith.

      E. Any  indemnification  under Section 4.l0B and 4.10C of this  Agreement,
unless ordered by a court,  shall be made by the Production  Partnership only as
authorized in the specific  case and only upon a  determination  by  independent
legal counsel in a written  opinion that such  indemnification  is proper in the
circumstances  because the indemnified party has met the applicable  standard of
conduct set forth in Sections 4.l0B or 4.l0C of this Agreement.

      F. The Production Partnership shall not incur the costs of that portion of
insurance which insures the Managing  Partners for any liability as to which the
Managing Partners are prohibited from being indemnified under Section 4.10.

                                  ARTICLE FIVE
                       Distributions, Fees and Allocations
                       -----------------------------------

      Section 5.1.  Distributions of Production Partnership Funds
      -----------------------------------------------------------

      The Distributable Cash of the Production  Partnership shall be distributed
simultaneously  to the Limited  Partnership and the Managing  Partners within 45
days after the close of each calendar quarter. Each Partner's share of each such

                               -38-
<PAGE>

distribution of  Distributable  Cash shall be determined  after giving effect to
the  allocations  set forth in Sections 5.3 and 5.4 of this  Agreement  for such
period. All distributions of Distributable  Cash shall reduce  dollar-for-dollar
the balances of the Partners' Capital Accounts.

      Section 5.2.  Fees and Reimbursement of Expenses to the Managing Partners
      -------------------------------------------------------------------------

      Geodyne  Production and PW Production  shall receive as Managing  Partners
(1) on a nonrecurring  basis, the Management Fee in an amount equal to 1-1/2% of
the Limited Partners' capital contributions to the Limited Partnership;  and (2)
reimbursement  for Direct  Administrative  Costs billed directly to the Managing
Partners and General and Administrative  Costs incurred by the Managing Partners
or their  Affiliates  allocable  to the  Production  Partnership,  except to the
extent that the Managing  Partners or their Affiliates are otherwise  reimbursed
for such costs  through  the payment of Property  Acquisition  Costs,  Operating
Costs or otherwise.  Geodyne Production and PW Production shall allocate between
themselves the payment of the  Management  Fee as follows:  in the event the Fee
(as defined in the Limited Partnership  Agreement)  (hereinafter  referred to as
the "Limited Partnership Fee") is less than the actual organization and offering
costs of the  Limited  Partnership  plus  Unreimbursed  Prior  Organization  and
Offering  Costs (as  defined in the  Limited  Partnership  Agreement),  then the
Management Fee shall be paid 60% to PW Production and 40% to Geodyne  Production
to the  extent  of such  deficiency,  60% to PW  Production  and 40% to  Geodyne
Production to the extent of organization and offering costs and the remainder of
the  Management  Fee  shall  be paid  75% to PW  Production  and 25% to  Geodyne
Production. In the event the Limited Partnership Fee is equal to or greater than
the actual  organization  and  offering  costs of the Limited  Partnership  plus
Unreimbursed  Prior  Organization  and Offering Costs (as defined in the Limited
Partnership  Agreement),  then  the  Management  Fee  shall  be  paid  60% to PW
Production  and 40% to  Geodyne  Production  to the extent of  organization  and
offering  costs and the  remainder  shall be paid as  follows:  in the event the
payment referred to in Section 3.6B(i) of the Limited Partnership  Agreement has
been made (but the payments in Section 3.6B(ii) and (iii) have not been made) to
the general  partners of the Limited  Partnership,  the  Management Fee shall be
paid 75% to PW  Production  and 25% to  Geodyne  Production;  in the  event  the
payment referred to in Section 3.6B(ii) of the Limited

                                      -39-
<PAGE>

Partnership  Agreement  has been made (but the payment in Section  3.6B(iii) has
not been made) to the general partners of the Limited Partnership, the excess of
the Management  Fee over the amount paid to the general  partners of the Limited
Partnership  pursuant to Section 3.6B(ii) of the Limited  Partnership  Agreement
shall be paid 75% to PW Production and 25% to Geodyne Production, the balance of
the  Management  Fee, but not in excess of 1% of the Limited  Partners'  capital
contributions to the Limited Partnership, shall be paid 50% to PW Production and
50% to Geodyne Production, and any remaining balance of the Management Fee shall
be paid 70% to PW Production and 30% to Geodyne Production; and in the event the
payment referred to in Section  3.6B(iii) of the Limited  Partnership  Agreement
has been made to the general partners of the Limited Partnership,  the excess of
the Management  Fee over the amount paid to the general  partners of the Limited
Partnership pursuant to Section 3.6B(iii) of the Limited Partnership  Agreement,
but not in excess of 1% of the Limited  Partners'  capital  contributions to the
Limited  Partnership,  shall be paid  50% to PW  Production  and 50% to  Geodyne
Production,  and the  balance  of the  Management  Fee  shall  be paid 70% to PW
Production and 30% to Geodyne Production.

      Section 5.3.  Allocation of Income, Investment Income, Costs and
                    Deductions
      ----------------------------------------------------------------

      A. The Income,  Investment Income,  Profits,  Production Partnership costs
and losses of the Production  Partnership shall be determined and allocated with
respect to each Fiscal Year of the  Production  Partnership  as of and within 75
days after the end of such Fiscal Year.

      B.  (i) 100% of  Investment  Income,  Property  Acquisition  Costs,  costs
      incurred in connection with Identified Development Drilling (including any
      interest,  commitment  fees and other  finance  charges  with  respect  to
      borrowings  incurred  in  connection  therewith)  and the  Management  Fee
      referred to in Section 5.2(1) of this Agreement shall all be allocated to,
      and borne by, the Limited  Partnership.  100% of Organization and Offering
      Costs  shall be  allocated  to, and borne by,  the  Managing  Partners  as
      follows:  60% to PW Production  and 40% to Geodyne  Production.  Except as
      otherwise provided in Sections 5.3B(ii) and 5.3B(iii), Income, General and
      Administrative  Costs,  Operating Costs, costs incurred in connection with
      Development Drilling and

                                      -40-
<PAGE>

      Direct  Administrative  Costs shall be allocated  among, and borne by, the
      Partners in the following percentages:

            (a)   Until Payout:
                  Limited Partnership             90.9091%

                  PW Production and Geodyne
                  Production (in the aggregate)    9.0909%

            (b)   After Payout:
                  Limited Partnership             85.8586%

                  PW Production and Geodyne
                  Production (in the aggregate)   14.1414%

      The Managing  Partners shall allocate  between  themselves their aggregate
      Interest before and after Payout as follows:  70% to PW Production and 30%
      to Geodyne  Production if the Production  Partnership is Activated  within
      twelve  months after the date on which the  registration  statement  filed
      with the Securities and Exchange  Commission  with respect to the Units is
      declared  effective (the "Effective  Date"),  and 60% to PW Production and
      40% to Geodyne  Production  if the  Production  Partnership  is  Activated
      during  the  twelve  month  period  ending  twenty-four  months  after the
      Effective Date; provided,  however, that if the Production Partnership was
      Activated  more  than  twelve  months  after  the  Effective  Date and the
      immediately  preceding  Prior  Production  Partnership  was  activated (as
      defined in the  partnership  agreement  respecting  such Prior  Production
      Partnership)  within  twelve  months  after the  Effective  Date,  then PW
      Production  shall be allocated that  percentage of the aggregate  Managing
      Partners'  Interest  represented by a fraction,  the numerator of which is
      equal  to the sum of (i) 70  multiplied  by the  number  of days  from the
      activation  of the  immediately  preceding  Prior  Production  Partnership
      through the date that is 12 months after the Effective  Date,  and (ii) 60
      multiplied by the number of days from the date that is 12 months after the
      Effective  Date  through  the  date of the  Activation  of the  Production
      Partnership, and the denominator of which is the total number of days that
      has  elapsed  from  the  activation  of the  immediately  preceding  Prior
      Production  Partnership to the  Activation of the Production  Partnership,
      and Geodyne  Production  shall be allocated  the balance of the  aggregate
      Managing Partners' Interest (such allocation

                                      -41-
<PAGE>

      between the  Managing  Partners of their  aggregate  Interest  being their
      "Sharing Ratios"). The Managing Partners shall have the authority to amend
      this Agreement to provide for any different  allocation between themselves
      at their discretion.

            (ii) As used in this  subsection,  the "Measuring Date" shall be the
      earlier  of the date on which  90% of the  Limited  Partnership's  Capital
      Contribution has been expended or the second anniversary of the Activation
      of the Production Partnership;  the first "Allocation Period" shall be the
      twelve  month  period  beginning  on the last day of the first full Fiscal
      Year  quarter  after the  Measuring  Date;  and each twelve  month  period
      following the end of the first Allocation Period shall also be referred to
      as an  "Allocation  Period".  Notwithstanding  anything  to  the  contrary
      contained herein,  if during each of the first two Allocation  Periods the
      amount of cash distributed to the Limited Partnership that is attributable
      to the  allocations  set forth in Section  5.3B(i) is less than a 15.1515%
      cumulative  (but  not  compounded)  twelve-month  return  on  the  Limited
      Partners'  capital  contributions to the Limited  Partnership,  then there
      shall be distributed to the Limited Partnership thereafter (in addition to
      the amount of Distributable  Cash  distributed to the Limited  Partnership
      resulting  from the  allocations to the Limited  Partnership  set forth in
      Section  5.3B(i))  an  amount  of  cash  up to 50% of the  cash  otherwise
      distributable  to  the  Managing  Partners   thereafter  pursuant  to  the
      allocations  set forth in Section  5.3B(i) not to exceed the amount of any
      such  deficiency (the amount of such cash  distribution  being a "Transfer
      Amount"),   and  Income  and  costs  sufficient  to  yield  an  amount  of
      Distributable Cash equal to the Transfer Amount and otherwise allocable to
      the  Managing  Partners  during the Fiscal  Year in which such  Allocation
      Period ends and,  to the extent  necessary,  each  Fiscal Year  thereafter
      pursuant to Section 5.3B(i) shall be allocated to the Limited Partnership.
      If during any Allocation Period after the initial two Allocation  Periods,
      the Limited  Partnership is being  allocated  Income and costs pursuant to
      Section 5.3B(i) such that there is distributed to the Limited  Partnership
      an amount of cash in excess of a 15.1515%  cumulative (but not compounded)
      twelve-month return on the Limited Partners' capital  contributions to the
      Limited  Partnership  since the  beginning  of the  first  two  Allocation
      Periods  (such excess amount of cash being the  "Surplus"),  and there has
      been distributed to the Limited Partnership a

                                      -42-
<PAGE>

      Transfer Amount,  then there shall be distributed to the Managing Partners
      thereafter  an aggregate  amount of cash  otherwise  distributable  to the
      Limited  Partnership  pursuant  to the  allocations  set forth in  Section
      5.3B(i)  equal to the  amount  of any  Surplus  (the  amount  of such cash
      distribution  being a  "Reverse  Transfer  Amount"),  and Income and costs
      sufficient to yield an amount of  Distributable  Cash equal to the Reverse
      Transfer Amount and otherwise  allocable to the Limited Partnership during
      the Fiscal  Year in which such  Allocation  Period ends and, to the extent
      necessary,  each Fiscal Year thereafter  pursuant to Section 5.3B(i) shall
      be allocated to the Managing Partners;  provided, however, that the amount
      of any Reverse Transfer Amount  distributed to the Managing Partners shall
      not  exceed an  amount  equal to the  aggregate  of the  Transfer  Amounts
      distributed to the Limited  Partnership  less the aggregate of all Reverse
      Transfer Amounts previously distributed to the Managing Partners.

            (iii) Notwithstanding  anything to the contrary contained herein, if
      on the seventh anniversary of the last day of the Fiscal Year in which the
      Production  Partnership  commences  Development  Drilling,  or  Identified
      Development  Drilling,  and  in  each  Fiscal  Year  thereafter,  (a)  the
      aggregate  amount  of Income  less the  aggregate  amount of direct  lease
      operating expenses and severance, ad valorem, windfall profits, excise and
      other taxes (but not income  taxes)  allocated to the Limited  Partnership
      pursuant to Section  5.3(B)(i)  attributable to production  resulting from
      Development  Drilling  and  Identified  Development  Drilling on Producing
      Properties is less than (b) the aggregate amount of costs allocated to the
      Limited  Partnership  pursuant to Section 5.3(B)(i) incurred in connection
      with Development Drilling and Identified Development Drilling on Producing
      Properties  during  each  Fiscal  Year  ending  seven or more years  prior
      thereto,  then  Income  and  costs  otherwise  allocable  to the  Managing
      Partners  pursuant to Section 5.3B(i) shall thereafter be allocated to the
      Limited Partnership until such deficiency in Income is eliminated.

            (iv) For purposes of the allocations  set forth in Section  5.3B(ii)
      of  this  Agreement,  the  amount  of  cash  distributed  to  the  Limited
      Partnership  for  purposes  of  determining  the  return  on  the  Limited
      Partners'  capital  contributions  to the  Limited  Partnership  shall not
      include any amounts attributable to the Production  Partnership's  payment
      of any windfall profits tax.

                                      -43-
<PAGE>

      C. All items of Income,  gain,  loss,  deduction and credit  allowable for
Federal income tax purposes and all recapture of any such deductions and credits
shall be  allocated  and charged or credited to the  Partners 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 level and shall be determined in the
case of  percentage  depletion  on the  same  basis  that  the  Income  from the
Producing Property is allocated;  and the Production Partnership shall allocate,
under Section  612A(c)(7)(D)  of the Code,  its adjusted basis in each Producing
Property to the Partners in proportion to the interest of each in the Production
Partnership capital ultimately used to acquire that property. If such allocation
of basis is not permitted  under the Code, the basis of each such property shall
be allocated in the manner  which the Managing  Partners  deem will most closely
achieve the result intended above.

      D. Capital  Accounts shall be established  and maintained for each Partner
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:

            (1) Each  Partner's  Capital  Account  shall be (i) increased by the
      amount of its  Capital  Contribution,  the fair  market  value of property
      contributed  by it to  the  Production  Partnership  (net  of  liabilities
      securing such  contributed  property that the  Production  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  (ii)  decreased  by  the  amount  of   Distributable   Cash
      distributed to it, the fair market value of property  distributed to it by
      the Production  Partnership (net of liabilities  securing such distributed
      property  that such  Partner is  considered  to assume or take  subject to
      under  section  752 of  the  Code)  and  allocations  to it of  Production
      Partnership  loss,  deduction (except to the extent such loss or deduction
      has previously been reflected

                                      -44-
<PAGE>

      in its Capital Account by adjustments thereto) and expenditures  described
      in section 705(a)(2)(B) of the Code.

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

            (iii)  If,  pursuant  to  this  Agreement,   Production  Partnership
      Property is reflected on the books of the Production Partnership at a book
      value  that  differs  from  the  adjusted  tax  basis  of such  Production
      Partnership  Property,  then  the  Partners'  Capital  Accounts  shall  be
      adjusted in accordance  with the 704  Regulations  for  allocations to the
      Partners of depreciation,  depletion,  amortization,  and gain or loss, as
      computed for book purposes,  with respect to such  Production  Partnership
      Property.

            (iv) The Partner's  Capital Accounts shall be adjusted for depletion
      and gain or loss with respect to the Production  Partnership's  oil or gas
      properties  in whichever of the  following  manners the Managing  Partners
      determine is in the best interests of the Partners:

                  (a) The  Partners'  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); provided, however, that the choice
            between  the cost  depletion  method  and the  percentage  depletion
            method  shall  be  made on a  property-by-property  basis  and  such
            choices  shall be binding  for all  Production  Partnership  taxable
            years  during  which  such  oil  or  gas  property  is  held  by the
            Production  Partnership.  Such  reductions  for  depletion  shall be
            allocated  among  the  Partners'   Capital   Accounts  in  the  same
            proportions as the adjusted basis in the particular property is

                                      -45-
<PAGE>

            allocated to each Partner. Upon the taxable disposition of an oil or
            gas  property  by  the   Production   Partnership,   the  Production
            Partnership's   simulated  gain  or  loss  shall  be  determined  by
            subtracting  its simulated  adjusted basis  (aggregate  adjusted tax
            basis of the Partners less simulated  depletion  allowances) in such
            property  from  the  amount  realized  on such  disposition  and the
            Partners'  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'  allocable  shares of the
            total amount realized on such disposition, or

                  (b)  The  Production  Partnership  shall  reduce  the  Capital
            Account  of each  Partner  in an  amount  equal  to  such  Partner's
            depletion  allowance with respect to each oil or gas property of the
            Production  Partnership  (for the  Partner's  taxable year that ends
            within  the  Production   Partnership's   taxable  year),  but  such
            reductions  for  depletion  shall  not  exceed  the  adjusted  basis
            allocated to such Partner  with respect to such  property.  Upon the
            taxable  disposition  of an oil or gas  property  by the  Production
            Partnership, the Capital Account of each Partner shall be reduced or
            increased,  as the  case may be,  by the  amount  of the  difference
            between such Partner's  allocable share of the total amount realized
            on such disposition and such Partner's  remaining adjusted tax basis
            in such property.

            (v) For purposes of determining  the Capital  Account balance of any
      Partner  as of the end of any  Production  Partnership  taxable  year  for
      purposes of Subsection 5.3I hereto,  such Partner's  Capital Account shall
      be reduced by:

                  (a) Adjustments  that, as of the end of such year,  reasonably
            are expected to be made to such Partner'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 Production
            Partnership, and

                                      -46-
<PAGE>

                  (b) Distributions that, as of the end of such year, reasonably
            are  expected to be made to such  Partner  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   Capital  Account  that
            reasonably are expected to occur during (or prior to) the Production
            Partnership  taxable years in which such  distributions are expected
            to be made.

      E. The  Capital  Accounts  of those  Partners  which are  charged  with an
expense of the Production Partnership 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.

      F. In  allocating  Income and costs for any Fiscal Year in which the ratio
for  sharing  Income  and  costs  changes  pursuant  to  Section  5.3B(i),   the
allocations  of Income and costs shall be made,  and the books of the Production
Partnership  shall be  closed,  as soon as  practicable  after  the date  Payout
occurs,  to determine  each Partner's  share of pre-change  Income and costs and
each Partner's share of post-change Income and costs for that Fiscal Year.

      G.  Proceeds  received from the Sale or transfer of all or any part of the
Production  Partnership's Producing Properties shall be allocated to the Limited
Partnership  and the Managing  Partners to the extent of their adjusted basis in
such sold or transferred Production Partnership Property.  Proceeds in excess of
said amount shall be allocated in accordance  with the  percentages set forth in
Section  5.3B(i) , except that,  notwithstanding  the provisions of Section 5.3F
and solely for purposes of this Section 5.3G,  where the proceeds from such Sale
are  distributed  to  the  Partners  and a  portion  of the  Distributable  Cash
attributable  to such Sale  proceeds is  sufficient in amount to cause Payout to
occur in  accordance  with the  allocation  percentages  in effect until Payout,
Payout  shall be  deemed  to occur  such  that  Income  and  Distributable  Cash
attributable to the portion of such Sale proceeds in excess of

                                      -47-
<PAGE>

the  portion of Sales  proceeds  sufficient  in amount to cause  Payout to occur
shall be allocated in accordance with the allocation percentages in effect after
Payout.

      H.  Notwithstanding  any other provision of this Agreement,  if, under any
provision of this  Agreement,  the Capital Account of any Partner is adjusted to
reflect  the  difference  between  the basis to the  Production  Partnership  of
Production  Partnership Property and such Production Partnership Property's fair
market value,  then all items of Income,  gain, loss, and deduction with respect
to such Production Partnership Property shall be allocated among the Partners so
as to take  account  of the  variation  between  the  basis  of such  Production
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.

      I.    Notwithstanding anything to the contrary stated herein,

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

            (b) Any General Partner that is not obligated to restore any deficit
      balance in such Partner's  Capital  Account who  unexpectedly  receives an
      adjustment,  allocation or  distribution  specified in Subsection  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

            (c) In the  event  any  allocations  of loss,  deduction,  credit or
      allowance are made to the Managing Partners pursuant to clause (a) of this
      Subsection 5.3I, the Managing Partners 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

                                      -48-
<PAGE>

      amount of any such  allocations  of loss,  deduction,  credit or allowance
      allocated to such Partners pursuant to clause (a) of this Subsection 5.3I.

      Section 5.4.  Determinations of Allocations and Distributions
      -------------------------------------------------------------

      Distributable Cash, Income, Investment Income, costs, deductions,  Profits
and Losses  allocable to the Partners shall be distributed or allocated,  as the
case may be, to the Persons who were Partners,  as of the last day of the fiscal
period for which the  distribution  or allocation is to be made,  except that in
any fiscal period in which a Partner sells, assigns or transfers all or any part
of such  Partner's  Interest  to any Person  who  during  the  fiscal  period is
admitted as a Substituted  Partner,  the Distributable Cash, Income,  Investment
Income,  costs,  deductions,  Profits and Losses attributable to the Interest so
sold,  assigned or transferred shall,  subject to the provisions of Section 10.2
of this Agreement, be allocated between the transferor and the transferee on the
basis of the number of days in the fiscal  period before the  admission,  and on
and after the admission,  of the transferee as a Substituted Partner;  provided,
however,  that the  Distributable  Cash  attributable  to a Sale of a  Producing
Property  shall be distributed to those Partners who are Partners on the day the
distribution  of such  Distributable  Cash occurs.  The Managing  Partners shall
inform the other  Partners of the  occurrence  and terms of any such Sale by the
Production  Partnership  as  soon  as  practicable  after  such  Sale  has  been
consummated.
                                   ARTICLE SIX
                 Transferability of Managing Partner's Interests
                 -----------------------------------------------

      Section 6.1.  Transferability of Managing Partner's Interest
      ------------------------------------------------------------

        A. Except as provided in Sections  6.lB and 6.2B,  each of the  Managing
Partners  shall not have the right to retire,  withdraw,  transfer or assign its
Managing Partner Interest,  except that there may be substituted in its stead as
Managing  Partner any entity that has, by merger,  consolidation  or  otherwise,
acquired  substantially  all of its assets or capital  stock and  continued  its
business.

                                      -49-
<PAGE>

        B. Each Managing  Partner may, upon at least ninety days' written notice
to the Limited Partnership and the other Managing Partner,  cause the Production
Partnership  to  distribute,  in  partial  liquidation  of its  Interest  in the
Production Partnership, to such Managing Partner fractional, undivided interests
in the Producing  Properties of the Production  Partnership  (such interest of a
Managing Partner in a Producing Property  distributed is hereinafter referred to
as the "Distributed Interest") up to an aggregate interest equal in value to 75%
of the value of the Producing  Properties of the Production  Partnership that it
would have been entitled to upon a  hypothetical  liquidation  of the Production
Partnership after application of the provisions of Section 8.2 of this Agreement
(the  interest in a Producing  Property  of a Managing  Partner  retained in the
Production  Partnership is hereinafter  referred to as the "Retained  Interest")
provided, however, that no such distribution shall occur (i) more than once with
respect to a Managing Partner, (ii) prior to seven years after the Activation of
the Production  Partnership  and (iii) unless such Managing  Partner  obtains an
opinion  of  counsel  to the  Production  Partnership  to the  effect  that such
distribution  will not result in any  material  adverse tax  consequence  to the
other Managing Partner or to the Limited Partners.  Notwithstanding  anything to
the contrary in this Agreement, in the event that any such distribution is made,
appropriate  adjustments  shall be made in the Capital  Accounts of the Partners
and in the allocation of Production  Partnership Income and costs to assure that
the other Managing  Partner will not share or participate in any of the capital,
costs, Income, or distributions  attributable to the Producing Properties of the
Production  Partnership  except to the extent of the  Retained  Interest of such
Managing Partner.

       Section 6.2.  Removal of Managing Partners
       ------------------------------------------

       A.   (i) The power shall be vested in the Limited  Partnership  to remove
            at any time any Managing  Partner.  The power shall be vested in the
            Limited  Partnership  to consent  to the  admission  of a  successor
            Managing  Partner  following the Removal of any Managing  Partner by
            the Limited  Partnership.  A  successor  Managing  Partner  shall be
            selected  pursuant  to  the  provisions  of  Section  6.2D  of  this
            Agreement.

                                      -50-
<PAGE>

             (ii) (a) A  Managing  Partner  shall  have the power to Remove  the
            other  Managing  Partner,  and  pursuant  to  Section  l0.lA of this
            Agreement,  admit a  successor  Managing  Partner,  for  "Cause"  as
            defined in Section 6.2A(ii)(b), but for no other reason.

                    (b) "Cause" for  purposes  of Section  6.2A(ii)(a)  shall be
            deemed  to exist  only (i)  when a court of  competent  jurisdiction
            shall have made a final  determination  (which  determination is not
            successfully  appealed)  that a Managing  Partner has been guilty of
            gross negligence, fraud, intentional misconduct or similar breach of
            fiduciary  responsibility  in carrying  out its duties as a Managing
            Partner,  or (ii) a Managing  Partner is dissolved or  liquidated on
            account of  insolvency  or any other event  occurs  resulting in the
            appointment  of a trustee or receiver  who  acquires  control of the
            affairs of such Managing  Partner for the purpose of  dissolution or
            liquidation on account of  insolvency,  and such trustee or receiver
            is not dismissed within 90 days after appointment of such trustee or
            receiver,  or (iii) (a) a report on the audited financial statements
            of a Managing Partner and its consolidated  corporate  affiliates is
            issued by the independent accountants for such Managing Partner that
            is  qualified  on a going  concern  basis,  or (b)  either  Managing
            Partner  requests  an audit to be  performed  of the other  Managing
            Partner and its consolidated corporate affiliates by the independent
            accountants  for the other  Managing  Partner  (the  expense of such
            audit being paid by the Managing Partner requesting the audit) , and
            such audit results in the issuance of an opinion with respect to the
            financial   statements  of  the  other  Managing   Partner  and  its
            consolidated  corporate affiliates for the period ending, and as of,
            the most recent date feasible,  that is qualified on a going concern
            basis.

      B.    (i) In the event that a Managing  Partner is  Removed,  the  Removed
            Managing Partner's  Interest in the Production  Partnership shall be
            transferred  to the other Managing  Partner,  and the other Managing
            Partner  shall assign to the Removed  Managing  Partner a portion of
            Production  Partnership Income,  costs and Distributable Cash as and
            when such items are allocated or distributed, as the case may be, by
            the

                                      -51-
<PAGE>

            Production  Partnership  equal  to the  percentage  interest  of the
            Removed Managing Partner in the Production  Partnership prior to its
            Removal;  provided,  however,  that such assignment shall be reduced
            proportionately in the event of a foreclosure or sale referred to in
            Section 4.3D with respect to the Removed Managing Partner's interest
            transferred  to the  other  Managing  Partner  to the  extent of the
            foreclosed or sold interest.

            (ii) If a sole Managing Partner is Removed and a successor  Managing
            Partner is to be admitted to the Production Partnership, the removed
            Managing  Partner  shall not be Removed  until a successor  Managing
            Partner has been admitted to the Production  Partnership pursuant to
            Article 10 of this Agreement.

            (iii) In the event a sole Managing Partner is Removed by the Limited
            Partnership and a successor Managing Partner is to be admitted,  the
            incoming Managing Partner and the Removed Managing Partner shall, by
            mutual  agreement,  select an  independent  petroleum  consultant to
            value the Removed  Managing  Partner's  Interest  in the  Production
            Partnership.  In  determining  the value of the  Managing  Partner's
            Interest,   the  independent   consultant  will  take  into  account
            appropriate discount factors in light of the risk of recovery of oil
            and gas  reserves,  and, in any event,  will utilize a "risk factor"
            discount  no less  than  that  utilized  in the  most  recent  offer
            extended  pursuant  to  Section  7.5  of  the  Limited   Partnership
            Agreement,  if any. The incoming Managing Partner, or the Production
            Partnership,  shall have the option to  purchase at least 20% of the
            Interest of the Removed Managing Partner for the value determined by
            the independent  appraisal.  The Removed Managing Partner's Interest
            in the Production  Partnership shall be transferred to the successor
            Managing Partner, and the successor Managing Partner shall assign to
            the Removed  Managing  Partner a portion of  Production  Partnership
            Income,  costs and  Distributable  Cash as and when  such  items are
            allocated  or  distributed,  as the case may be,  by the  Production
            Partnership equal to the percentage interest of the Removed Managing
            Partner in the  Production  Partnership  prior to Removal,  less the
            portion   purchased  by  the  successor   Managing  Partner  or  the
            Production Partnership.

                                      -52-
<PAGE>

      C. Notwithstanding  Section 3.6, any Managing Partner who shall be Removed
pursuant  to the  provisions  of  Section  6.2  shall be  released  by the other
Partners from all liability for  Production  Partnership  debts and  obligations
incurred by the Production Partnership prior to the date of such Removal.

      D. Under  circumstances in which the Limited  Partnership  Consents to the
admission  of a successor  Managing  Partner,  such  admission  shall not become
effective unless the Production  Partnership  shall have received a certificate,
duly executed by or on behalf of such proposed successor Managing Partner to the
effect  that  it is  experienced  in  the  performance  (or  employs  sufficient
personnel who are experienced in performing) of functions of the type then being
performed by the Removed Managing Partner.

                                  ARTICLE SEVEN
                Transferability of Limited Partnership's Interest
               --------------------------------------------------

        Section 7.1.  Transferability of Limited Partnership's Interest
        ---------------------------------------------------------------

      No Sale,  exchange,  transfer or assignment  of the Limited  Partnership's
Interest may be made if in the opinion of counsel to the Production Partnership,
such Sale, exchange, transfer or assignment,  would (i) result in the Production
Partnership  being  considered to have terminated  within the meaning of Section
708 of the Code, or (ii) cause the Production  Partnership to lose its status as
a  partnership  for Federal  income tax  purposes.  In  addition,  the  Managing
Partners may require an opinion of the transferor's counsel, satisfactory to the
Managing Partners,  that such Sale,  exchange,  transfer or assignment would not
violate the Securities Act of 1933, as amended, or any state securities or "blue
sky" laws.

      Section 7.2.  Incapacity of Partners
      ------------------------------------

      If a Partner  (including a Managing  Partner) becomes  Incapacitated,  the
Person  who is its legal  representative  shall have all the rights of a Partner
for the purpose of settling or

                                      -53-
<PAGE>

managing  its estate and such power as the  Incapacitated  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.
The Incapacity of a Partner shall not dissolve the Production Partnership.

      Section 7.3.  Assignees and Substituted Partners
      ------------------------------------------------

      A. The  Production  Partnership  shall not  recognize  for any purpose any
purported sale, assignment or transfer of all or any fraction of the Interest of
the Limited  Partnership  unless the  provisions  of Section 7.1 shall have been
complied with and there shall have been filed with the Production  Partnership a
dated  Notification  of  such  sale,   assignment  or  transfer,   executed  and
acknowledged  by both the seller,  assignor  or  transferor  and the  purchaser,
assignee or transferee and such  Notification (i) contains the acceptance by the
purchaser,  assignee or  transferee  of all of the terms and  provisions of this
Agreement and (ii) represents that such sale, assignment or transfer was made in
accordance with all applicable  laws and  regulations.  Any sale,  assignment or
transfer shall be recognized by the  Production  Partnership as effective on the
date of such  Notification if the date of such Notification is within 30 days of
the date on which such  Notification  is filed with the Production  Partnership,
and otherwise shall be recognized as effective on the date such  Notification is
filed with the Production Partnership.

      B. If the Limited  Partnership assigns all of its Interest to an assignee,
the Limited Partnership shall cease to be a Partner.

      C. A Person who is the  assignee of all or any fraction of the Interest of
the Limited  Partnership  shall be subject to all the provisions of this Article
Seven to the same  extent  and in the same  manner  as the  Limited  Partnership
desiring to make an assignment of its Interest.

      D. Any purchaser,  assignee,  transferee,  donee,  heir,  legatee or other
recipient of an Interest  shall be admitted to the  Production  Partnership as a
Substituted  Partner only with the Consent of the other Partners,  which Consent
may be  granted  or  withheld  by such  Partners  at  their  sole  and  absolute
discretion.  The  admission  of such Person as a  Substituted  Partner  shall be
evidenced  by the  execution  by the Partners of a  certificate  evidencing  the
admission of such Person as a Partner

                                      -54-
<PAGE>

and an amendment to this  Agreement  executed by the Managing  Partners on their
own behalf, as well as on behalf of each other Partner, pursuant to the power of
attorney granted pursuant to Section 12.5 of this Agreement.

      E. No Person shall become a  Substituted  Partner  until such Person shall
have satisfied the requirements of Section 10.2; provided, however, that for the
purpose of allocating Income,  Investment Income,  Profits,  Losses,  costs, and
Distributable Cash, a Person shall be treated as having become, and as appearing
in the records of the Production  Partnership  as, a Partner on such date as the
sale,  assignment or transfer to such Person was  recognized  by the  Production
Partnership pursuant to Section 7.3A.

      Section 7.4.  Incapacity of the Limited Partnership
      ---------------------------------------------------

      Upon the  Incapacity of the Limited  Partnership  or upon the seizure of a
Limited Partnership's Interest in the Production  Partnership,  the successor to
such Limited Partnership's Interest ("Successor") shall be deemed an assignee of
such Limited  Partnership's  Interest in the Production  Partnership and neither
the  Production  Partnership  nor the  Successor  shall have the right to demand
immediate valuation and payment of such Limited Partnership's Interest.

                                  ARTICLE EIGHT
                    Dissolution, Liquidation and Termination
                          of the Production Partnership
                          -----------------------------

      Section 8.1.  Events Causing Dissolution
      ----------------------------------------

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

              (i) the  expiration  of its term,  unless its term shall have been
      extended  by the  Management  Committee  pursuant  to Section  2.4 of this
      Agreement;

              (ii) the Incapacity of the sole Managing Partner.  However, within
      ninety days  thereafter the remaining  Partners may elect to  reconstitute
      the  Production  Partnership  prior  to  application  of  the  liquidation
      provisions of Section 8.2;

                                      -55-
<PAGE>

            (iii)  the  Sale  or  other  disposition  at  one  time  of  all  or
      substantially all of the assets of the Production  Partnership existing at
      the time of such Sale;

            (iv) the election to dissolve the Production  Partnership (a) by the
      Managing  Partners  (which  election  shall be Consented to by the Limited
      Partnership), or (b) by the Consent of all Partners;

             (v) ninety days after the Removal  (unless the Limited  Partnership
      Consents to a Successor  pursuant to Section 6.2 of this Agreement) of the
      sole Managing Partner;

              (vi) the happening of any other event causing the  dissolution  of
      the Production  Partnership  under the laws of the State,  except that the
      Incapacity of any Partner (other than the sole Managing Partner) shall not
      dissolve the Production Partnership and the seizure of the Interest of any
      Partner shall not dissolve the Production Partnership.

      B. Dissolution of the Production Partnership shall be effective on the day
on which the event occurs  giving rise to the  dissolution,  but the  Production
Partnership  shall not  terminate  until the Managing  Partners  have recorded a
notice of dissolution of the Production Partnership in the proper records of any
jurisdiction  in which this  Agreement has been recorded and shall have complied
with the laws of the  states in which its does  business  and the  assets of the
Production Partnership have been distributed as provided in Section 8.2.

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

      Section 8.2.  Liquidation
      -------------------------

      A. Upon dissolution of the Production  Partnership,  its liabilities shall
be paid in the  order  provided  herein.  The  Managing  Partners  shall  either
distribute in kind or sell the  Production  Partnership's  property so that such
disposition is in

                                      -56-
<PAGE>

the best interests of the Limited Partnership,  and shall execute all amendments
terminating  the Production  Partnership.  In connection with any such Sale, the
Managing  Partners  shall  attempt to obtain the best prices for such  property.
Pending such Sales,  the Managing  Partners  shall have the right to continue to
operate and otherwise to deal with Production Partnership property. In the event
the Production  Partnership is dissolved on account of the Incapacity or Removal
of the sole  Managing  Partner,  the  Production  Partnership  shall  elect,  in
accordance  with the provisions of Article  Eleven,  a person (the  "Liquidating
Agent") to perform the function of a Managing  Partner in liquidating the assets
of the Production  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
Production  Partnership's  assets  will be  credited to (in the case of gain) or
charged  against  (in the case of loss) each  Partner's  Capital  Account to the
extent  allocable  to it under  Sections 5.3 and 5.4 of this  Agreement.  In the
event of a distribution  in kind of (a) any property other than an interest in a
Producing  Property,  each Partner's  Capital  Account shall be debited with the
portion of the Production  Partnership's  adjusted basis thereof attributable to
the interest  therein  distributed  to it and (b) any  Producing  Property or an
interest in any Producing  Property,  each Partner's Capital Account shall first
be  credited  or  debited  with its  share  of the  unrealized  appreciation  or
depreciation in the fair market value of said Producing  Property or interest in
said Producing Property. Each Partner's share of said unrealized appreciation or
depreciation  shall be equivalent to its share  (allocated  pursuant to Sections
5.3 and 5.4 of this  Agreement)  of the gain or loss on an  actual  Sale of such
Producing  Property or interest therein.  The Capital Account of each Partner to
whom a Producing  Property or an interest in a Producing Property is distributed
shall  be  debited  with  the  fair  market  value  of  the  Producing  Property
distributed  to it. Any  liquidation of the  Production  Partnership  shall take
place out of court and without  application being made therefor to the Secretary
of State of the State of Oklahoma.

      B. In settling  accounts after  dissolution,  the assets of the Production
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  Managing
Partners  and  any  Liquidating   Agent  for  any  expenses  of  the  Production
Partnership  paid by or  payable  to them to the  extent  they are  entitled  to
reimbursement therefor pursuant to this Agreement; (iii) to the

                                      -57-
<PAGE>

Limited  Partnership  in the amount  equivalent  to the  amount of its  positive
Capital Account  balances (as adjusted  pursuant to Section 8.2A) on the date of
distribution;  (iv) to the  Managing  Partners in the amount  equivalent  to the
amount of their  positive  Capital  Account  balances (as  adjusted  pursuant to
Section 8.2A) on the date of distribution;  and (v) the balance shall be paid to
the  Partners in the manner  provided  for by Sections  5.1, 5.3 and 5.4 of this
Agreement with respect to Distributable Cash.

      C. If any Managing  Partner has a deficit  balance in its Capital  Account
following the distribution(s)  provided for in Section 8.2B above, as determined
after taking into account all adjustments to its Capital Account for the taxable
year of the Production  Partnership during which such distribution(s)  occur, it
shall restore the amount of such deficit  balance to the Production  Partnership
within 90 days and such account  shall be  distributed  to the other  Parties in
accordance with their positive Capital Account balances.

      D. Upon the liquidation or partial  liquidation of any Managing  Partner's
Interest  pursuant to Article 6 hereof,  distribution  to the  Managing  Partner
whose  Interest is being  liquidated  shall be made pro rata to such  Partner in
accordance  with and to the extent of such Partner's  positive  Capital  Account
balance  after the  Partners'  Capital  Accounts  are  adjusted as if all of the
Production  Partnership's  property  had  been  sold at its  fair  market  value
immediately  prior to such  distribution  and the gain or loss  realized on such
sale charged or credited to the Partners'  Capital  Accounts in accordance  with
the provisions of Article 5 hereof, provided,  however, that if such Partner has
a deficit  balance  in its  Capital  Account  following  such  distribution  (or
adjustment of such  Partner's  Capital  Account  pursuant to this Section 8.2D),
such Partner shall restore the amount of such deficit  balance to the Production
Partnership by the later of the end of the Production  Partnership  taxable year
in which the liquidation of such Partner's  Interest occurs or 90 days after the
date of such liquidation.

                                      -58-
<PAGE>

                                  ARTICLE NINE
               Books and Records; Accounting; Tax Elections; etc.
               --------------------------------------------------

      Section 9.1.  Books and Records
      -------------------------------

      The books and records of the Production Partnership, including information
relating  to the sale by the  Managing  Partners or any  Affiliates  of goods or
services to the  Production  Partnership,  and a list of the names and addresses
and Interests of all Partners,  shall be maintained by the Managing  Partners at
the principal  office of the Production  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  its  duly  authorized
representatives  at any and all  reasonable  times.  Any  Partner,  or its  duly
authorized representatives, upon paying the costs of collection, duplication and
mailing, shall be entitled for any proper purpose to a copy of the list of names
and  addresses and Interests of the Partners.  The  Production  Partnership  may
maintain  such other books and records and may provide  such  financial or other
statements as the Managing Partners in their discretion deem advisable.

      Section 9.2.  Accounting Basis for Tax and Reporting Purposes; Fiscal Year
      --------------------------------------------------------------------------

      The books and records of the Production  Partnership for tax purposes, for
purposes of this  agreement and for the purpose of reports to the Partners shall
be kept on the cash or accrual basis, as the Managing  Partners shall determine.
The Fiscal Year of the Production  Partnership shall be the calendar year to the
extent  permissible  and the Managing  Partners  shall use their best efforts to
obtain any necessary approvals therefor.

      Section 9.3.  Bank Accounts
      ---------------------------

      The  General  Partners  shall  maintain a bank  account or  accounts to be
maintained by the Managing Partners on behalf of the Production Partnership with
any bank in the United States having total assets in excess of $100,000,000. The
Managing Partners shall not deposit Production Partnership funds in an

                                      -59-
<PAGE>

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
Production  Partnership's  business  on  such  signature  or  signatures  as the
Managing Partners 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 9.4.  Reports
      ---------------------

      A.  The  Managing  Partners  shall  furnish  to  the  Limited  Partnership
sufficient information and data with respect to the properties and operations of
the Production Partnership in order to permit the Limited Partnership to satisfy
its  reporting   obligations  under  Section  9.4  of  the  Limited  Partnership
Agreement.

      B. The Managing  Partners shall file on a timely basis with the Securities
and  Exchange  Commission  all  filings  required  to be made by the  Production
Partnership  pursuant to the Securities Act of 1933, the Securities Exchange Act
of 1934, and the rules and regulations promulgated thereunder.

      Section 9.5.  Elections
      -----------------------

      The Managing  Partners shall cause the Production  Partnership to make all
elections  required or permitted to be made by the Production  Partnership under
the Code and not  otherwise  expressly  provided for in this  Agreement,  in the
manner that the Managing  Partners believe will be most  advantageous to Limited
Partnership, except that (i) the Managing Partners 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 Managing  Partners shall make the
election under Section 263(c) of the Code to expense all intangible drilling and
development  costs in the  initial  Production  Partnership  Federal  income tax
return filed for the Fiscal Year in which such costs are incurred.

                                      -60-
<PAGE>

                                   ARTICLE TEN
                                   Amendments
                                   ----------

        Section 10.1.  Proposal and Adoption of Amendments Generally
        ------------------------------------------------------------

      A. Notwithstanding anything to the contrary contained herein, the Managing
Partners may,  without prior notice or consent of any other  Partner,  amend any
provision of this  Agreement  (including  an  amendment  to admit an  additional
Managing Partner) if, in their opinion,  such amendment does not have a material
adverse effect upon the Limited Partnership.  Such amendment shall thereafter be
disclosed  to  the  Limited   Partners  within  a  reasonable  time  thereafter.
Amendments  to this  Agreement  to reflect  the  addition or  substitution  of a
Partner or the  admission of a successor  Managing  Partner shall be made at the
time and in the manner  referred to in Section 10.2. Any other amendment to this
Agreement may be proposed by the Managing  Partners or the Limited  Partnership.
The Partner or Partners  proposing  such  amendment  shall submit a 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  Partner or
Partners proposing such amendment to the effect that such amendment is permitted
by the Act, will not impair the limited liability of the Limited  Partners,  and
will not adversely affect the  classification of the Limited  Partnership or the
Production  Partnership as  partnerships  for Federal  income tax purposes.  The
Managing Partners shall, within 15 days after receipt of any proposal under this
Section l0.lA, give Notification to all Partners 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,  with the views,  if any, of the
Managing Partners 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 l0.2A, the conditions specified in Section 7.3
shall have been  satisfactorily  completed and the Production  Partnership shall
not have been furnished with an opinion of counsel to the Production Partnership
to the effect that such amendment will adversely  affect the  classification  of
the Limited  Partnership  or the  Production  Partnership  as  partnerships  for
Federal income

                                      -61-
<PAGE>

tax purposes;  (ii) in the case of amendments  referred to in Section l0.2B, the
conditions specified in Section 6.2 shall have been satisfactorily completed; or
(iii) in the case of all  other  amendments,  such  amendment  shall  have  been
Consented  to by the Limited  Partnership  (unless  such Consent is not required
pursuant to Section l0.lA);  provided,  however, that no such amendment may: (a)
enlarge the obligations of any Partner under this Agreement  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, Income,  Investment Income,
Profits, Losses, Distributable Cash or costs and expenses without the Consent of
each Partner adversely affected by such modification;  (c) amend Sections 6.1 or
6.2 without the Consent of all the Partners;  or (d) amend  Sections 2.3,  4.3A,
4.3B,  4.3C,  4.3D,  4.4A, 4.4B, 4.5A, 4.9, 4.10 or this Article Ten without the
Consent of all the Partners.

      C. Upon the adoption of any  amendment to this  Agreement,  the  amendment
shall be executed by the Managing Partners and all other Partners,  and shall be
recorded  in the proper  records  of the State and any other  state in which the
Production Partnership is then doing business.

      Section 10.2.  Amendments on Admission or Removal of Partners
      -------------------------------------------------------------

      A. If this  Agreement  shall  be  amended  to  reflect  the  admission  or
substitution  of a Partner,  the  amendment to this  Agreement may be adopted by
either of the Managing Partners,  the Person to be substituted or added, and the
assigning  Partner.  Any such  amendment  shall be  executed  on  behalf  of all
Partners but may be executed by the substituted or added Partner,  the assigning
Partner, and either of the Managing Partners,  individually and on behalf of all
of the other Partners pursuant to the power of attorney granted in Section 12.5.

      B. If this Agreement shall be amended to reflect the Removal of a Managing
Partner and the continuation of the business of the Production Partnership, such
amendment shall be signed by the remaining or successor  Managing Partner and by
the Removed Managing Partner.

                                      -62-
<PAGE>

      C. No Person  shall become a Partner,  unless such Person shall have:  (i)
become a party  to,  and  adopted  all of the  terms  and  conditions  of,  this
Agreement;  (ii) if such  Person  is other  than an  individual,  provided  upon
request the Managing  Partners  with  evidence  satisfactory  to counsel for the
Production  Partnership of such Person's authority to become a Partner under the
terms and provisions of this Agreement; and (iii) paid all reasonable legal fees
of  the  Production  Partnership  and  the  Managing  Partners  and  filing  and
publication costs in connection with such Person's becoming a Partner.

                                 ARTICLE ELEVEN
                          Consents, Voting and Meetings
                          -----------------------------

      Section 11.1.  Method of Giving Consent
      ---------------------------------------

      Any  Consent  required  by this  Agreement  may be given by a  Partner  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 Managing Partners 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 Managing  Partners prior to
the date upon which the vote of  Partners  are to be  counted.  Any  Partner may
waive notice of or  attendance  at any meeting of the Partners and may execute a
signed  written  consent.  Only the votes of  Partners  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 Partners.

      Section 11.2.  Meetings of Partners
      -----------------------------------

      The  Managing  Partners  may at any time call a meeting of the Partners or
for a vote,  without a  meeting,  of the  Partners  on  matters  upon  which the
Partners  are  entitled to vote,  and shall call for such a meeting or vote upon
receipt of a Notification therefor of the Limited Partnership. Within 15 days of
the receipt of the Notification, the Managing Partners shall notify all Partners
of  record  as of the date of the  Notification  as to the time and place of the
meeting, if called, and the general

                                      -63-
<PAGE>

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 Production Partnership meeting or the date upon which
such  votes,  without a meeting,  will be  counted  (regardless  of whether  the
Managing  Partners  have  called for such  meeting  or vote upon the  request of
Limited  Partnership or have 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 Managing Partners. All expenses of the meetings,  voting and such
Notification shall be borne by the Production Partnership.

      Section 11.3.  Submissions to Other Partners
      --------------------------------------------

      The Managing  Partners shall give all the other Partners  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 other  Partners.
Such  Notification  shall  include  any  information  required  by the  relevant
provision of the Agreement or by law.

      Section 11.4.  Limited Partnership Consent
      ------------------------------------------

      To the extent allowed in the Limited Partnership  Agreement and subject to
Section 10.1, the Limited Partnership,  by and through more than 50% in Interest
(as to capital and Profits and Losses) of the Limited Partners,  may without the
concurrence of the Managing Partners:

        (a)  amend the Production Partnership Agreement;

        (b)  dissolve the Production Partnership;

        (c)  remove either or both Managing Partners and elect new ones;

        (d)  approve or disapprove the sale of all or  substantially  all of the
             assets of the Production Partnership; and

        (e)  cancel or amend  the  terms of any  contract  for  services  with a
             Managing  Partner or any Affiliate thereof without  penalty upon 30
             days' notice.

                                      -64-
<PAGE>

                                 ARTICLE TWELVE
                            Miscellaneous Provisions
                            ------------------------

      Section 12.1.  Notification to the Production Partnership of the
                     Managing Partners
      ----------------------------------------------------------------

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

      Section 12.2.  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 12.3.  Applicable Law
      -----------------------------

      This Agreement shall be construed and enforced in accordance with the laws
of the State  applicable to contracts made and to be performed wholly within the
State.

      Section 12.4.  Separability of Provisions
      -----------------------------------------

      If for any  reason  any  provision  or  provisions  hereof  which  are not
material to the  purposes or business of the  Production  Partnership  or of the
Partners' Interests 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.

                                      -65-
<PAGE>

      Section 12.5.  Appointment of the Managing Partners as Attorney-in-Fact
      -----------------------------------------------------------------------

      A.  Each  Partner,  by  the  execution  of  this  Agreement,   irrevocably
constitutes  and  appoints  each of the Managing  Partners,  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 Partner,  that the Managing
Partners deem  appropriate to form,  reform,  qualify or continue the Production
Partnership (or a new partnership with  substantially the same provisions as the
Production  Partnership)  as a  partnership  in the  jurisdiction  in which  the
Production  Partnership  may conduct  business;  (ii) all  amendments  and other
instruments  necessary to admit into the  Production  Partnership  additional or
substituted  Partners  pursuant to Section 10.2;  (iii) all instruments that the
Managing  Partners deem  appropriate to reflect a change or  modification of the
Production Partnership in accordance with the terms of this Agreement (including
those necessary to reflect any additional Capital  Contributions);  and (iv) all
conveyances and other instruments that the Managing Partners deem appropriate to
reflect the dissolution and termination of the Production Partnership.

      B. The  appointment  by all Partners of each of the  Managing  Partners as
agent and attorney-in-fact shall be deemed irrevocable and to be a power coupled
with an interest,  in  recognition  of the fact that each of the Partners  under
this Agreement will be relying upon the power of the Managing Partners to act as
contemplated by this Agreement in any filing and other action by it on behalf of
the  Production  Partnership,  and shall  survive the  Incapacity  of any Person
hereby  giving such power and the transfer or  assignment  of all or any part of
the  Interest  of such  person;  provided,  however,  that in the  event  of the
transfer by a Partner of all of its Interest,  the foregoing  powers of attorney
of the  transferor  Partner  shall survive such transfer only until such time as
the transferee shall have been admitted to the Production Partnership as a

                                      -66-
<PAGE>

Substituted  Partner and all required  documents and instruments shall have been
duly executed, filed and recorded to effect such substitution.

      Section 12.6.  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 12.7.  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 12.8.  Counterparts
      ---------------------------

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

GEODYNE PRODUCTION COMPANY               PW PRODUCTION INC.

By:   // Thomas W. Kitchin //            By:   // Lawrence S. Kash //
      -----------------------                  ---------------------
      Thomas W. Kitchin,                        Lawrence S. Kash,
      President                                 President

                                      -67-
<PAGE>

                                          PAINEWEBBER/GEODYNE ENERGY
                                          INCOME LIMITED PARTNERSHIP I-F

                                          By:   GEODYNE PROPERTIES, INC.
                                                General Partner

                                          By:   // Thomas W. Kitchin //
                                                -----------------------
                                                Thomas W. Kitchin,
                                                President

                                          BY:   PW ENERGY INC.
                                                General Partner

                                          By:   // Lawrence S. Kash //
                                                ---------------------
                                                Lawrence S. Kash,
                                                President

                                 ACKNOWLEDGMENTS

STATE OF NEW YORK       )
                        )  ss.
COUNTY OF NEW YORK      )

      BEFORE ME, the undersigned Notary Public,  duly commissioned and qualified
in and for the County and State aforesaid, personally came and appeared Lawrence
S. Kash who,  after being duly sworn by me, did declare that he is the President
of PW  Production  Inc.  and  that by and  with the  authority  of the  Board of
Directors of PW Production  Inc. he executed the foregoing  Amended and Restated
Agreement  of  Partnership  of  PaineWebber/Geodyne   Energy  Income  Production
Partnership I-F as the free and voluntary act and deed of PW Production Inc. for
the purposes therein set forth.

      Subscribed and sworn to and  acknowledged by said Lawrence S. Kash on this
____ day of November, 1986.

                                          // Dorothy F. Haughey //
                                          -------------------------
                                                Notary Public
My Commission Expires:
March 30, 1987

                                      -68-
<PAGE>

STATE OF OKLAHOMA )
                  )  ss.
COUNTY OF TULSA   )

      BEFORE ME, the undersigned Notary Public,  duly commissioned and qualified
in and for the County and State  aforesaid,  personally came and appeared Thomas
W.  Kitchin  who,  after  being  duly sworn by me,  did  declare  that he is the
President of Geodyne  Production  Company and that by and with the  authority of
the Board of Directors of Geodyne  Production  Company he executed the foregoing
Amended and Restated  Agreement of  Partnership  of  PaineWebber/Geodyne  Energy
Income  Production  Partnership  I-F as the free and  voluntary  act and deed of
Geodyne Production Company for the purposes therein set forth.

      Subscribed and sworn to and  acknowledged by said Thomas W. Kitchin on the
13th day of November, 1986.

                                          // Cindy L. Hays //
                                          -------------------
                                           Notary Public
My Commission Expires:
August 19, 1987

                                      -69-
<PAGE>

STATE OF OKLAHOMA )
                  )  ss.
COUNTY OF TULSA   )

      BEFORE ME, the undersigned Notary Public,  duly commissioned and qualified
in and for the County and State  aforesaid,  personally came and appeared Thomas
W.  Kitchin  who,  after  being  duly sworn by me,  did  declare  that he is the
President of Geodyne Properties,  Inc. and that by and with the authority of the
Board of  Directors  of Geodyne  Properties,  Inc.  and as general  partner  for
PaineWebber/Geodyne  Energy  Income  Limited  Partnership  I-F he  executed  the
foregoing Amended and Restated  Agreement of Partnership of  PaineWebber/Geodyne
Energy Income Production  Partnership I-F as the free and voluntary act and deed
of Geodyne  Properties,  Inc. as general partner of  PaineWebber/Geodyne  Energy
Income Limited Partnership I-F for the purposes therein set forth.

      Subscribed and sworn to and  acknowledged by said Thomas W. Kitchin on the
13th day of November, 1986.

                                          // Cindy L. Hays //
                                          -------------------
                                             Notary Public
My Commission Expires:
August 19, 1987

                                      -70-
<PAGE>

STATE OF NEW YORK       )
                        ) ss.
COUNTY OF NEW YORK      )

      BEFORE ME, the undersigned Notary Public,  duly commissioned and qualified
in and for the County and State aforesaid, personally came and appeared Lawrence
s. Kash who,  after being duly sworn by me, did declare that he is the President
of PW Energy,  Inc. and that by and with the authority of the Board of Directors
of PW Energy, Inc. and as general partner for PaineWebber/Geodyne  Energy Income
Limited Partnership I-F he executed the foregoing Amended and Restated Agreement
of Partnership of  PaineWebber/Geodyne  Energy Income Production Partnership I-F
as the free and voluntary act and deed of PW Energy,  Inc. as general partner of
PaineWebber/Geodyne  Energy  Income  Limited  Partnership  I-F for the  purposes
therein set forth.

      Subscribed and sworn to and  acknowledged by said Lawrence S. Kash on this
____ day of November, 1986.

                                          // Dorothy F. Haughey //
                                          ------------------------
                                              Notary Public

My Commission Expires:

March 30, 1987

                                      -71-FIRST AMENDMENT TO
                              AMENDED AND RESTATED
                            AGREEMENT OF PARTNERSHIP
                  PAINEWEBBER/GEODYNE ENERGY INCOME PRODUCTION
                                 PARTNERSHIP I-D

      The Amended and Restated  Agreement of Partnership of  PaineWebber/Geodyne
Energy Income  Production  Partnership I-D dated March 4, 1986 (the "Agreement")
is hereby amended effective March 1, 1993, as follows:

      A. The first sentence of Section 2.2 is hereby deleted and replaced by the
following provision:

      "The  Production  Partnership  shall be  conducted  under the name Geodyne
Energy Income Production Partnership I-D."

      B. All references in the Agreement to  "PaineWebber/Geodyne  Energy Income
Production  Partnership  I-D" are  hereby  changed  to  "Geodyne  Energy  Income
Production Partnership I-D."

      C. The third sentence of Section 2.2 is hereby deleted and replaced by the
following provision:

      "The office and principal place of business of the Production  Partnership
shall be c/o  Geodyne  Production  Company,  Two West  Second,  Tulsa,  Oklahoma
74103."

      D.  The  name  of the  "General  Partner"  and the  "Limited  Partnership"
reflected  in Article  One has been  changed  from  "PaineWebber/Geodyne  Energy
Income Limited  Partnership  I-D" to "Geodyne Energy Income Limited  Partnership
I-D". All  references in the Agreement to the name of the "General  Partner" and
the "Limited  Partnership" are hereby changed to reflect this name change.  This
change reflects a name change only and not a change of entity.

      E. On December 18, 1986, PW Production Inc., a Delaware  corporation,  was
merged  with  and  into  Geodyne  Production  Company,  a  Delaware  corporation
("Geodyne"),  as evidenced by a Certificate of Merger of PW Production Inc. into
Geodyne  Production  Company,  filed of record on such date in the office of the
Secretary  of State of Delaware in Book 466 at Page 606.  Geodyne  survived  the
merger as the sole  general  partner of the  PaineWebber/Geodyne  Energy  Income
Production Partnership I-D.

                                      -1-
<PAGE>

      In all other respects the Agreement is hereby ratified and affirmed.

DATED:    February 26, 1993
                                          Managing Partner:

                                          Geodyne Production Company

                                          // Michael E. Luttrell //
                                          -------------------------
                                          Michael E. Luttrell
                                          Executive Vice President

                                          General Partner

                                          Geodyne Energy Income Limited
                                          Partnership I-D

                                          By:  Geodyne Properties1 Inc.,
                                               General Partner

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

                                      -2-

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