Document:

PATRICK H. O'NEILL
                              EMPLOYMENT AGREEMENT

     This Agreement (this "Agreement"),  dated as of September 16, 2001, is made
by and  among  Ascent  Assurance,  Inc.,  a  Delaware  corporation,  having  its
principal offices at 110 West Seventh Street, Suite 300, Fort Worth, Texas 76102
("AAI"), Ascent Management,  Inc., a Delaware corporation,  having its principal
offices at 110 West  Seventh  Street,  Suite 300,  Fort Worth,  Texas 76102 (the
"Corporation"),  and Mr. Patrick H. O'Neill (the "Executive"),  residing at 4001
Briarhaven Court, Fort Worth, Texas 76109.

                                    RECITALS

     1. The  Corporation  and AAI each  desire to  retain  the  Executive  as an
employee  of the  Corporation  and AAI and to employ him as the  Executive  Vice
President,  General Counsel,  and Secretary of AAI and the  Corporation,  and to
enter into an agreement  embodying the terms of those  relationships  which upon
proper execution shall supercede all prior written employment agreements between
the parties.

     2. The  Executive  is willing  to serve as the  Executive  Vice  President,
General Counsel, and Secretary of AAI and the Corporation on the terms set forth
herein.
                                    AGREEMENT

     NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, and other good and valuable consideration,  the Corporation, AAI, and
the Executive hereby agree as follows:

     1. Definitions.

     1.1  "Affiliate" means any person or entity  controlling,  controlled by or
          under common control with AAI or the Corporation.

     1.2  "Annual  Compensation"  means the Executive's  highest Base Salary and
          Annual Bonus during the Term of Employment.

     1.3  "Board" means the Board of Directors of AAI.

     1.4  "Cause" means (a) Executive's material breach of any term or condition
          of this Agreement;  (b) Executive's (i) personal  dishonesty,  willful
          misconduct or intentional  breach of fiduciary duty, in each such case
          involving AAI, the Corporation or any Affiliate's property,  personnel
          or business  operations,  in each case  materially  detrimental to the
          goodwill of AAI,  the  Corporation  or any  Affiliate,  or  materially
          damaging to AAI's, the Corporation's or any Affiliate's  relationships
          with  its  respective  customers,   clients  or  employees;   or  (ii)
          intentional  failure to perform  the  current  material  duties of his
          employment or his other material obligations  hereunder,  or any other
          intentional  act by  Executive  which  in  either  case is  materially
          detrimental to the goodwill of AAI, the  Corporation or any Affiliate,
          or materially  damaging to AAI's, the Corporation's or any Affiliate's
          relationships   with  its   customers,   clients  or  employees;   (c)
          Executive's conviction or entry of a no-contest plea with respect to a
          felony;  (d)  Executive's  material   misappropriation  (or  attempted
          material  misappropriation)  of any of AAI's, the Corporation's or any
          Affiliate's,  funds or property or of a business  opportunity  of AAI,
          the  Corporation or any Affiliate  (including  attempting to secure or
          securing  any  personal  profit  in  connection  with any  transaction
          entered  into on  behalf of AAI,  the  Corporation  or any  Affiliate)
          materially  detrimental to the goodwill of AAI, the Corporation or any
          Affiliate,  or materially  damaging to AAI's, the Corporation's or any
          Affiliate's  relationships with its respective  customers,  clients or
          employees;  or (e) Executive's gross negligence in connection with the
          performance of Executive's  obligations  hereunder which is materially
          detrimental  to  the  goodwill  of  AAI  and  the  Corporation  or any
          Affiliate,  or materially  damaging to AAI's, the Corporation's or any
          Affiliate's relationships with its customers, clients or employees.

     1.5  "Date of Termination" means (a) in the case of a termination for which
          a Notice of  Termination  is required,  the date of actual  receipt of
          such Notice of Termination  or, if later,  the date specified  therein
          (in no event,  however,  shall  such date be later than seven (7) days
          after the date of actual receipt of such notice),  as the case may be,
          and (b) in all other cases,  the actual date on which the  Executive's
          employment terminates during the Term of Employment.

     1.6  "Disability"  means  mental  or  physical   impairment  or  incapacity
          rendering  the  Executive  substantially  unable to perform his duties
          under  this  Agreement  for at least  than 180 days out of any 360 day
          period during the Term of Employment.

     1.7  "Good Reason" means and shall be deemed to exist if, without the prior
          express  written  consent  of the  Executive,  (a)  the  Executive  is
          assigned any duties or  responsibilities  inconsistent in any material
          respect  with the scope of the duties or  responsibilities  associated
          with the Executive's  titles or positions,  as set forth and described
          in Section 4 of this Agreement;  (b) the Executive suffers a reduction
          in the  duties,  responsibilities,  titles,  positions,  or  effective
          authority associated with such titles and positions,  as set forth and
          described  in Section 4 of this  Agreement;  (c) the  Executive is not
          appointed  to, or is removed from,  the offices or positions  provided
          for in Section 4 of this Agreement; (d) the Executive's Base Salary is
          decreased by AAI or the Corporation, or the Executive's benefits under
          employee  benefit or health or welfare plans or programs of AAI or the
          Corporation are decreased, except as provided in Section 5.1 hereof as
          a  result  of a  good  faith  change  in  benefits  applicable  to all
          employees of AAI and the Corporation, or the Executive fails to timely
          receive his Base Salary,  2001 Annual Bonus,  2002 Annual Bonus,  LTIP
          Award,  expense  reimbursement,  or any other  benefit  to which he is
          entitled under this  Agreement;  (e) AAI and the  Corporation  fail to
          maintain,  or cause to be maintained,  adequate directors and officers
          liability  insurance coverage for the Executive or fail to comply with
          Section 4.3 of this Agreement;  (f) AAI and the Corporation purport to
          terminate  the  Executive's  employment  for Cause and such  purported
          termination  of  employment  is not  effected in  accordance  with the
          requirements  of this  Agreement;  or (g)  there  occurs a  Change  in
          Control.

     1.8  "Term of Employment" has the meaning ascribed to it in Section 3.

     1.9  "Change in Control" means

          (a)  the acquisition, during the Term of Employment, by an individual,
               entity or group  (within  the  meaning  of  Section  13(d)(3)  or
               14(d)(2) of the Securities  Exchange Act of 1934, as amended (the
               "Exchange Act")) of beneficial  ownership  (within the meaning of
               Rule 13d-3  promulgated under the Exchange Act) of 34% or more of
               (A) the  outstanding  shares of common stock of AAI, (the "Common
               Stock"),   or  (B)  the  combined  voting  power  of  the  voting
               securities  of AAI entitled to vote  generally in the election of
               directors  (the  "Voting  Securities");  provided,  however,  the
               following  acquisitions shall not constitute a Change in Control:
               (x) any  acquisition  by any  employee  benefit  plan (or related
               trust)  sponsored  or  maintained  by the  Corporation  or AAI or
               Affiliate,   or  (y)  any  acquisition  by  any  corporation  if,
               immediately following such acquisition, more than 66% of the then
               outstanding  shares of common stock of such  corporation  and the
               combined voting power of the then outstanding  voting  securities
               of such  corporation  (entitled to vote generally in the election
               of directors) is beneficially owned,  directly or indirectly,  by
               all or  substantially  all of the  individuals  and entities who,
               immediately prior to such acquisition, were the beneficial owners
               of the Common Stock and the Voting  Securities  in  substantially
               the  same   proportions,   respectively,   as  their   ownership,
               immediately  prior to such  acquisition,  of the Common Stock and
               Voting Securities; or

          (b)  circumstances occurring,  during the Term of Employment,  whereby
               individuals  who  constitute  the Board (the  "Incumbent  Board")
               cease for any reason to  constitute  at least a  majority  of the
               Board; provided, however, that any individual becoming a director
               subsequent  to the  date of this  Agreement  whose  election,  or
               nomination for election by AAI's shareholders,  was approved by a
               vote of at least a majority  of the  directors  then  serving and
               comprising the Incumbent Board shall be considered as though such
               individual were a member of the Incumbent  Board,  but excluding,
               for this purpose, any such individual whose initial assumption of
               office  occurs as a result  of  either  an  actual or  threatened
               election  contest  (as  such  terms  are used in Rule  14a-11  of
               Regulation  14A  promulgated  under  the  Exchange  Act) or other
               actual or threatened solicitation of proxies or consents; or

          (c)  approval,  during the Term of Employment,  by the shareholders of
               AAI of a plan of reorganization,  merger or consolidation,  other
               than a reorganization,  merger, or consolidation  with respect to
               which all or  substantially  all of the  individuals and entities
               who were the  beneficial  owners of the  Common  Stock and Voting
               Securities  immediately prior to such  reorganization,  merger or
               consolidation  who continue to beneficially own immediately after
               such  reorganization,  merger or consolidation,  more than 66% of
               the then outstanding common stock and voting securities (entitled
               to  vote   generally  in  the  election  of   directors)  of  the
               corporation   resulting  from  such  reorganization,   merger  or
               consolidation  in  substantially  the same  proportions  as their
               respective  ownership,  immediately prior to such reorganization,
               merger  or   consolidation,   of  the  Common  Stock  and  Voting
               Securities, or

          (d)  approval,  during the Term of Employment,  by the shareholders of
               AAI of (i) a complete liquidation or dissolution AAI, or (ii) the
               sale or  other  disposition  of all or  substantially  all of the
               assets of AAI,  other than to a direct or  indirect  wholly-owned
               subsidiary  of AAI.  For purposes of this  Agreement  and without
               limiting the  generality of the preceding  sentence,  the sale or
               other  disposition of AAI of more than 50% of the common stock or
               Voting Securities  (entitled to vote generally in the election of
               directors)  of AAI shall be deemed to  constitute a sale or other
               disposition of substantially all of the assets of AAI.

     2.  Employment.  Subject  to the  terms  and  provisions  set forth in this
Agreement, AAI hereby agrees that the Executive shall be the chief legal officer
of AAI and the Corporation and report  exclusively to the Chairman of the Board,
President and Chief Executive  Officer of AAI and the Corporation with the title
of Executive Vice President,  General Counsel,  and Secretary during the Term of
Employment  and  each of AAI and  the  Corporation  agrees  during  the  Term of
Employment to employ the Executive as Executive Vice President, General Counsel,
and  Secretary  of each of AAI and the  Corporation,  and the  Executive  hereby
accepts such employment.

     3. Term of Employment.  The term of employment  under this Agreement  shall
commence on September 16, 2001,  (the  "Commencement  Date") and shall  continue
until the earlier to occur of March 15, 2003 (the "Expiration Date") or the date
on which the  Executive is  terminated  or resigns  pursuant to Section 6 hereof
(the "Term of Employment").

     4. Positions, Responsibilities and Duties.

     4.1  Positions.  During the Term of Employment,  the Executive (i) shall be
          employed and serve as Executive Vice President,  General Counsel,  and
          Secretary  of  each  of  AAI  and  the  Corporation,  as  well  as the
          equivalent or higher title and position of each of the subsidiaries of
          AAI;  and (ii)  shall  be  elected  and  serve  as a  director  of the
          Corporation. Notwithstanding the foregoing, Executive shall serve from
          time to time as a "loaned employee" or "borrowed employee" of National
          Foundation Life Insurance  Company,  Freedom Life Insurance Company of
          America,  American  Insurance Company of Texas and National  Financial
          Insurance  Company  in  accordance  with the  administrative  services
          agreement executed by such insurance companies and the Corporation. In
          such  positions  with  AAI,  the  Executive  shall  have  the  duties,
          responsibilities and authority normally associated with the office and
          position of executive vice president,  general counsel,  and secretary
          of a  publicly-traded  corporation.  The Executive shall report solely
          and  directly  to the  President  and  Chief  Executive  Officer.  The
          Executive shall perform his duties and  responsibilities  hereunder at
          his current  office  located at 110 West Seventh  Street,  Suite 1100,
          Fort Worth,  Texas 76102,  or at such other home office of AAI and the
          Corporation  situated  in or  reasonably  near the City of Fort Worth,
          Texas.  Notwithstanding the above, the Executive shall not be required
          to perform  any duties and  responsibilities  which would be likely to
          result in a non-compliance  with or violation of any applicable law or
          regulation.

     4.2  Duties.  During the Term of  Employment,  the Executive  shall use his
          best  efforts to perform  faithfully  and  efficiently  the duties and
          responsibilities  contemplated by this Agreement,  including,  without
          limitation,  the responsibilities normally associated with the highest
          ranking legal officer and secretary and shall devote substantially all
          of his business time, skill and attention to such services,  including
          the service as a "loaned employee" or "borrowed  employee" of National
          Foundation Life Insurance  Company,  Freedom Life Insurance Company of
          America,  American  Insurance Company of Texas and National  Financial
          Insurance  Company;  provided,  however,  that the Executive  shall be
          allowed, to the extent other activities do not substantially interfere
          with  the  full  performance  by  the  Executive  of  his  duties  and
          responsibilities  hereunder,  to (a) manage the Executive's  personal,
          financial and legal affairs, which may include non-competing,  passive
          business  activities  and (b) serve on civil or  charitable  boards or
          committees.  The  Executive  shall  at all  times  comply  with and be
          subject  to  AAI's  and  the   Corporation's   policies,   procedures,
          directives,  and  regulations as may be reasonably  established by the
          Board from time to time.

     4.3  Working Conditions. AAI and the Corporation will provide the Executive
          with a private office,  secretarial and stenographic services, and any
          other  facilities  and services as are currently in place or otherwise
          suitable to the  Executive's  position or required for the performance
          of his duties

     5.  Compensation,  Other  Benefits and Payment of Certain  Wages.

     5.1  Base  Salary.  During  the Term of  Employment,  the  Executive  shall
          receive a base  salary of no less than  $286,000.00  per annum  ("Base
          Salary") payable in equal semi-monthly installments.  Such Base Salary
          shall be reviewed  annually for increase in the sole discretion of the
          Board or the Executive  Committee  thereof.  Any such salary  increase
          shall then be the "Base Salary" for purposes of this Agreement.

     5.2  Short-Term Incentive.  For fiscal year 2001 of AAI (in addition to the
          Base  Salary),  the  Executive  shall be eligible to receive an annual
          cash bonus  ("2001  Annual  Bonus") in an amount,  if any,  reasonably
          determined by the Board or a committee thereof. Such 2001 Annual Bonus
          shall be payable to the Executive in February, 2002 or at such time as
          such bonuses or similar  bonuses are paid to other officers or members
          of the Corporation's or AAI's senior management.  For fiscal year 2002
          of AAI (in addition to Base Salary),  the Executive  shall be eligible
          to receive an annual cash bonus ("2002  Annual  Bonus") based upon AAI
          achieving  reasonable  consolidated  financial targets consistent with
          the October 2001 Business Plan as more  specifically  provided and set
          forth  in the  summary  attached  hereto  as  Exhibit  "A" and by this
          reference is incorporated  for all purposes  herein.  Such 2002 Annual
          Bonus shall be payable to the  Executive  in February  2003 or at such
          time as such bonuses or similar  bonuses are paid to other  members of
          the Corporation's or AAI's senior management.

     5.3  Retirement Plans.  During the Term of Employment,  the Executive shall
          be entitled to  participate  in all  incentive,  pension,  retirement,
          savings,  401(k) and other employee pension benefit plans and programs
          maintained  by AAI  and/or the  Corporation  from time to time for the
          benefit of senior executives and/or other employees.

     5.4  Welfare Benefit Plans.  During the Term of Employment,  the Executive,
          the Executive's spouse, if any, and their eligible dependents, if any,
          shall be  entitled  to  participate  in and be  covered  under all the
          welfare  benefit plans or programs  maintained by the  Corporation and
          AAI from  time to time  including,  without  limitation,  all  medical
          hospitalization,   dental,  disability,  life,  accidental  death  and
          dismemberment  and  travel  accident  insurance  plans  and  programs.
          Executive  shall  also earn and  receive  a minimum  of five (5) weeks
          vacation  each  year  with an  unlimited  year-end  accrual  of unused
          vacation.

     5.5  Long-Term   Incentive   Plan.  The  Executive  shall  be  entitled  to
          participate in any long-term  incentive plan or program adopted by the
          boards  of  AAI  and  the  Corporation  ("LTIP  Award")  based  on the
          achievement  of  reasonable  corporate  objectives  determined in good
          faith by AAI or the  Corporation.  An LTIP Award may be in the form of
          performance  shares,  performance  units,  stock  options,  restricted
          stock, or other types of awards deemed  appropriate by the Board,  the
          Executive Committee or such other committees of the Board.

     5.6  Expense  Reimbursement.  During the Term of Employment,  the Executive
          shall be entitled to receive prompt  reimbursement  for all reasonable
          expenses  incurred  by the  Executive  in  promoting  AAI  and/or  its
          Affiliates and in otherwise performing his duties and responsibilities
          hereunder.

     5.7  Payment of Deferred  Wages.  As of  September  15,  2001,  AAI and the
          Corporation  owed  Executive  wages  in  the  amount  of  $437,216.88.
          However,  a deferral of the  payment of such wages  would  enhance the
          financial  condition  of AAI  and  the  Corporation,  and  AAI and the
          Corporation  has  requested,  and  the  Executive  has  agreed  to the
          deferral of the payment of such wages.  Accordingly,  in consideration
          of the mutual promises and covenants  contained herein,  the Executive
          agrees that he shall accept the following  described deferred payments
          from AAI and the Corporation,  and AAI and the Corporation  agree that
          they  shall  make  such  deferred  payments  to the  Executive  in the
          principal amount of $437,216.88,  together with interest on any unpaid
          portion thereof at the rate of 10% per year of 360 days from September
          15, 2001 until the date paid,  as deferred  wages and not as severance
          (the "Deferred  Payment"),  in accordance with the following  schedule
          without the necessity of any further resolution or vote approving such
          payment  by  either  of their  respective  board of  directors  once a
          resolution  of  each  such  board  or  authorized   committee  thereof
          approving the execution of this Agreement has been made:

               The amount of such Deferred  Payment shall be paid by AAI and the
               Corporation  to the  Executive  in  four  equal  installments  of
               $109,304.22,  together  with  accrued  interest as of the date of
               such installment payment, as described below, unless prior to any
               such  installment  payment due date (i) Executive dies whether or
               not during the Term of Employment, (ii) Executive's employment is
               terminated   hereunder  due  to  Disability,   (iii)  Executive's
               employment  hereunder  is  terminated  by AAI or the  Corporation
               without  Cause,  or  (iv)  Executive's  employment  hereunder  is
               terminated  by the  Executive  for Good  Reason,  in any of which
               events the payment due date(s) of the remaining unpaid portion of
               the  Deferred  Payment  shall  accelerate  such  that the  unpaid
               portion of the Deferred Payment shall be then immediately due and
               payable. In the absence of the occurrence of the events described
               in clauses (i)  through  (iv)  above,  (a) the first  installment
               payment shall be due and paid on or before December 21, 2001, (b)
               the second installment payment shall be due and paid on March 15,
               2002, (c) the third installment  payment shall be due and paid on
               June 15, 2002, and (d) the final installment payment shall be due
               and paid on September 15, 2002.

     6. Termination.

     6.1  Termination Due to Death or Disability. A determination of whether the
          Executive  is Disabled  shall be made by AAI, the  Corporation  or any
          Affiliate  in its  sole,  but  good  faith,  discretion  upon  its own
          initiative  after  obtaining   certification   from  a  duly  licensed
          physician or upon request of the  Executive or a person  acting on his
          behalf.  The Executive  shall  cooperate  with any  necessary  medical
          examination in connection  with a  determination  of Disability.  Upon
          seven (7) days  prior  written  notice to the  Executive,  AAI and the
          Corporation may terminate the Executive's  employment hereunder due to
          Disability.  In the event of the Executive's death or a termination of
          the  Executive's   employment  by  AAI  and  the  Corporation  due  to
          Disability, the Executive, his estate or his legal representative,  as
          the  case  may be,  shall  be  entitled  to  receive  from AAI and the
          Corporation without duplication the following:

          (a)  a lump sum payment of the Base Salary continuation at the rate in
               effect (as provided for by Section 5.1 of this  Agreement) at the
               time of such termination through the Date of Termination;

          (b)  a lump sum payment of any Annual Bonus and LTIP Award awarded but
               not yet paid as of the Date of Termination;

          (c)  a lump sum  payment  on the  Date of  Termination  of the  unpaid
               portion of the Deferred Payment;

          (d)  a lump sum  payment of accrued  but unused  vacation  through the
               Date of Termination;

          (e)  reimbursement of all expenses incurred, but not yet paid prior to
               such death or Disability;

          (f)  in the  case of  death,  any  other  compensation  and  benefits,
               including life  insurance,  as may be provided in accordance with
               the terms and provisions of any applicable  plans and programs of
               AAI or the Corporation, except any other severance benefit of AAI
               or the Corporation; and

          (g)  in the case of Disability,  (i)  continuation  of the Executive's
               health and welfare  benefits (as described in Section 5.5 of this
               Agreement)  at the level in effect  (as  provided  for by Section
               5.5) on the Date of  Termination  through the end of the one year
               period  following the termination of the  Executive's  employment
               due to Disability  (or the  Corporation  and/or AAI shall provide
               the economic equivalent thereof), and (ii) any other compensation
               and benefits as may be provided in accordance  with the terms and
               provisions  of any  applicable  plans and programs of AAI and the
               Corporation,  except  any other  severance  benefit of AAI or the
               Corporation other than the Deferred Payment.

     6.2  Termination  by AAI  and  the  Corporation  for  Cause.  AAI  and  the
          Corporation  may terminate the  Executive's  employment  hereunder for
          Cause as provided  in this  Section  6.2.  If AAI and the  Corporation
          terminate  the  Executive's   employment   hereunder  for  Cause,  the
          Executive  shall be entitled to receive  from AAI and the  Corporation
          without duplication the following:

          (a)  a lump sum payment of the Base Salary continuation at the rate in
               effect (as provided for by Section 5.1 of this  Agreement) at the
               time of such termination  through the Date of Termination;

          (b)  a lump sum payment of any Annual Bonus and LTIP Award awarded but
               not yet paid as of the Date of Termination;

          (c)  a lump sum payment of the Deferred  Payment payable in accordance
               with  Section  5.7  on the  applicable  installment  payment  due
               date(s),   the  date  of  the   Executive's   death   after  such
               termination,  or the date on which the Executive becomes mentally
               or physically  impaired or  incapacitated to the extent rendering
               him unable to perform the type of duties  contemplated herein for
               any other  employer  for 180 days of any 360 day period after the
               date of such termination;

          (d)  a lump sum  payment of accrued  but unused  vacation  through the
               Date of Termination;

          (e)  reimbursement for all expenses  incurred,  but not yet paid prior
               to such termination of employment; and

          (f)  any  other  compensation  and  benefits  as  may be  provided  in
               accordance with the terms and provisions of any applicable  plans
               and  programs  of AAI  and  the  Corporation,  except  any  other
               severance benefit of AAI or the Corporation.

     In any case  described in this Section  6.2, the  Executive  shall be given
written notice authorized by a vote of at least a majority of the members of the
Board  that  AAI  and  the  Corporation  intend  to  terminate  the  Executive's
employment  hereunder for Cause.  Such written notice,  given in accordance with
Section 6.7 of this  Agreement,  shall  specify the  particular  act or acts, or
failure to act,  which is or are the basis for the decision to so terminate  the
Executive's  employment for Cause.  Except with respect to the grounds set forth
in Section  1.4(c),  as to which the  following  shall not apply,  the Executive
shall be given the  opportunity  within  thirty  (30)  calendar  days  after the
receipt  of such  notice to meet with the Board to defend  such act or acts,  or
failure to act, and the Executive shall be given thirty (30) business days after
such  meeting  to  correct  such act or  failure  to act.  Upon  failure  of the
Executive,  as fairly and reasonably determined by the Board, within such latter
thirty  (30) day  period,  to  correct  such act or  failure  to act,  or if the
Executive fails to meet with the Board after being provided an opportunity to do
so, the Executive's employment by AAI and the Corporation shall be automatically
terminated  under this  Section  6.2 for Cause as of the date  determined  under
Section 1.5 of this Agreement.

     6.3  Termination  without Cause or Termination for Good Reason.  Upon seven
          (7)  days  prior  written  notice  to  the  Executive,   AAI  and  the
          Corporation may terminate the Executive's employment hereunder without
          Cause,  and upon thirty  (30) days notice to AAI and the  Corporation,
          the Executive may terminate his employment  hereunder for Good Reason.
          If AAI  and  the  Corporation  terminate  the  Executive's  employment
          hereunder without Cause, other than due to death or Disability,  or if
          the Executive terminates his employment for Good Reason, the Executive
          shall be  entitled  to receive  from AAI and the  Corporation  without
          duplication the following:

          (a)  a lump sum payment  equal in amount to 117% of the sum of (i) the
               Executive's  Base Salary (as  provided for by Section 5.1 of this
               Agreement), and (ii) the highest of either the 2001 Annual Bonus,
               2002 Annual Bonus, or any other annual or incentive bonus awarded
               to the  Executive  within  five  (5)  years  prior to the Date of
               Termination;

          (b)  a lump sum payment of any Base Salary  accrued or any 2001 Annual
               Bonus, 2002 Annual Bonus, and LTIP Award awarded but not yet paid
               as of the Date of Termination;

          (c)  a lump sum  payment on the Date of  Termination  of the  Deferred
               Payment;

          (d)  a lump sum  payment of accrued  but unused  vacation  through the
               Date of Termination;

          (e)  reimbursement of all expenses incurred, but not yet paid prior to
               such termination of employment; and

          (f)  any  other  compensation  and  benefits  as  may be  provided  in
               accordance with the terms and provisions of any applicable  plans
               or  programs  of  the  Corporation  and  AAI,  except  any  other
               severance benefit of AAI or the Corporation.

     In the case of  termination  by Executive for Good Reason  pursuant to this
Section  6.3, AAI and the  Corporation  shall be given  written  notice that the
Executive  intends to terminate his employment  hereunder for Good Reason.  Such
written notice,  given in accordance  with Section 6.7 of this Agreement,  shall
specify the particular act or acts, or failure to act, which is or are the basis
for the decision to so terminate  the  Executive's  employment  for Good Reason.
Upon failure of AAI and the Corporation,  as fairly and reasonably determined by
the Executive,  within the thirty (30) day notice period  referred to above,  to
correct such act or failure to act, or if AAI and the  Corporation  fail to meet
with the Executive after being provided an opportunity to do so, the Executive's
employment by AAI and the Corporation  shall be  automatically  terminated under
this Section 6.3 for Good Reason as of the date determined  under Section 1.5 of
this Agreement.

     6.4  Voluntary  Termination.  The Executive may effect, upon seven (7) days
          prior  written  notice  to  AAI  and  the  Corporation,   a  Voluntary
          Termination of his  employment  hereunder.  A "Voluntary  Termination"
          shall mean a  termination  of  employment  by the Executive on his own
          initiative other than (a) a termination due to death or Disability, or
          (b) a termination for Good Reason. A Voluntary  Termination  shall not
          be a breach of this Agreement. If the Executive's employment hereunder
          is so terminated,  the Executive shall be entitled to receive from AAI
          and the Corporation the following:

          (a)  a lump sum  payment of any  accrued but unpaid Base Salary at the
               rate in effect (as provided for by Section 5.1 of this Agreement)
               at the time of such termination  through the Date of Termination;

          (b)  a lump sum payment on the applicable installment payment due date
               under Section 5.7 of the Deferred  Payment,  together with a lump
               sum payment on the Date of  Termination of any 2001 Annual Bonus,
               2002 Annual  Bonus,  or LTIP Award awarded but not yet paid as of
               the Date of Termination;

          (c)  reimbursement  for expenses  incurred,  but not yet paid prior to
               the Date of Termination; and

          (d)  any  other  compensation  and  benefits  as  may be  provided  in
               accordance  with  the  terms  and  provisions  of any  applicable
               employee  benefit  plans or  programs  maintained  by AAI and the
               Corporation,  except  any other  severance  benefit of AAI or the
               Corporation.

     6.5  Termination  of Agreement by  Expiration.  If this  Agreement  expires
          pursuant  to Section 3 hereof,  the  Executive  shall be  entitled  to
          receive  on the  Expiration  Date  from  AAI and the  Corporation  the
          following:

          (a)  a lump sum  payment of any  accrued but unpaid Base Salary at the
               rate in effect (as provided for by Section 5.1 of this Agreement)
               through the  Expiration  Date;

          (b)  a lump sum payment of any 2001 Annual  Bonus,  2002 Annual Bonus,
               and LTIP  Award  awarded  but not yet  paid as of the  Expiration
               Date;

          (c)  a lump sum  payment of accrued  but unused  vacation  through the
               Expiration Date;

          (d)  reimbursement of all expenses incurred, but not yet paid prior to
               such termination of employment;

          (e)  any  other  compensation  and  benefits  as  may be  provided  in
               accordance with the terms and provisions of any applicable  plans
               or  programs  of  the  Corporation  and  AAI,  except  any  other
               severance benefit of AAI or the Corporation.

     6.6  No  Mitigation;  No  Offset.  In  the  event  of  any  termination  of
          employment  under  this  Section  6, the  Executive  shall be under no
          obligation  to seek  other  employment  and  there  shall be no offset
          against any amounts due the Executive  under this Agreement on account
          of any remuneration attributable to any subsequent employment that the
          Executive  may obtain.  Any amounts due under this Section 6, with the
          exception  of the  Deferred  Payment,  are in the nature of  severance
          payments,  or liquidated  damages, or both, and in no event are either
          such severance payments, liquidated damages or the Deferred Payment in
          the nature of a penalty.

     6.7  Notice of Termination.  Any termination by AAI and the Corporation for
          Cause or by the Executive for Good Reason shall be  communicated  by a
          notice of  termination  to the other party hereto given in  accordance
          with Section 13.3 of this Agreement (the "Notice of Termination"). The
          Notice of Termination shall be given, in the case of a termination for
          Cause,  within  ninety (90)  business  days after the Chief  Executive
          Officer,  President,  or a director of the Corporation  (excluding the
          Executive) knew or should have known of the events giving rise to such
          purported  termination,  and  in  the  case  of a  termination  by the
          Executive  for Good Reason,  within  ninety (90) days of the Executive
          having actual knowledge of the events giving rise to such termination,
          except in the case of  termination  for Good Reason  resulting  from a
          Change in Control  then  within one hundred  eighty  (180) days of the
          effective  date of such  Change  in  Control.  Such  notice  shall (a)
          indicate the specific  termination  provision in this Agreement relied
          upon, (b) set forth in reasonable  detail the facts and  circumstances
          claimed  to  provide  a  basis  for  termination  of  the  Executive's
          employment   under  the  provision  so  indicated,   and  (c)  if  the
          termination  date is other than the date of  receipt  of such  notice,
          specify  the  date  on  which  the  Executive's  employment  is  to be
          terminated  (which  date shall not be  earlier  than the date on which
          such notice is actually given).

     6.8  Certain Other Payments.  Notwithstanding  any other provisions of this
          Agreement,  in the event that any payment or benefit received or to be
          received by the  Executive in  connection  with a Change in Control or
          the termination of the Executive's employment, whether pursuant to the
          terms of this  Agreement or any other plan,  arrangement  or agreement
          with AAI and the  Corporation  or any of their  Affiliates  (all  such
          payments and benefits being  hereinafter  called the "Total Payments")
          would  subject the  Executive to the excise tax imposed  under Section
          4999 of the Internal  Revenue Code of 1986, as amended (the "Code") or
          any successor section thereto (the "Excise Tax"), and if, and only if,
          such  Total  Payments  less the  Excise  Tax is less than the  maximum
          amount of the Total  Payments  which could be payable to the Executive
          without the imposition of the Excise Tax, then and only then, and only
          to the extent  necessary to eliminate the imposition of the Excise Tax
          (and after  taking into account any  reduction  in the Total  Payments
          provided by reason of Section 280G of the Code in any such other plan,
          arrangement or agreement), (A) any cash payments hereunder shall first
          be  reduced  (if  necessary,  to  zero),  and (B) all  other  non-cash
          payments  hereunder  shall  next  be  reduced.  For  purposes  of this
          limitation  (i) no  portion  of the  Total  Payments  the  receipt  or
          enjoyment  of which the  Executive  shall have  effectively  waived in
          writing prior to the Date of Termination  shall be taken into account,
          (ii) no portion  of the Total  Payments  shall be taken  into  account
          which in the  opinion of tax  counsel  selected  by AAI's  independent
          auditors  and   reasonably   acceptable  to  the  Executive  does  not
          constitute  a  "parachute  payment"  within  the  meaning  of  Section
          280G(b)(2) of the Code,  including by reason of Section  280G(b)(4)(A)
          of the Code,  (iii) all  payments  shall be reduced only to the extent
          necessary so that the Total Payments  (other than those referred to in
          clauses  (i)  or  (ii))  in  their  entirety   constitute   reasonable
          compensation  for  services  actually  rendered  within the meaning of
          Section  280G(b)(4)(B)  of the Code or are  otherwise  not  subject to
          disallowance as deductions  under Code Section 280G, in the opinion of
          the tax counsel  referred to in clause (ii); and (iv) the value of any
          non-cash  benefit or any deferred  payment or benefit  included in the
          Total  Payments shall be determined by AAI's  independent  auditors in
          accordance  with the principles of Sections  280G(d)(3) and (4) of the
          Code.
     6.9  Payment. Except as otherwise provided in this Agreement,  any payments
          to which the  Executive  shall be  entitled  to under this  Section 6,
          including, without limitation, any economic equivalent of any benefit,
          shall be made immediately on the Date of Termination. If the amount of
          any payment due to the Executive cannot be finally  determined  within
          thirty (30) days after the Date of  Termination,  such amount shall be
          estimated on a good faith basis by AAI and the estimated  amount shall
          be paid no later than thirty (30) days after such Date of Termination.
          As soon as  practicable  thereafter,  the final  determination  of the
          amount due shall be made and any adjustment  requiring a payment to or
          from the Executive shall be made as promptly as practicable.

     7.  Non-Exclusivity  of Rights.  Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit,  bonus,
incentive  or other plan or program  provided  or  maintained  by AAI and/or the
Corporation for which the Executive may qualify, nor shall anything herein limit
or otherwise  prejudice  such rights as the  Executive  may have under any other
existing or future agreements with the Corporation, AAI, and/or any Affiliate of
either,  including,  without  limitation,  any stock option agreements or plans.
Amounts which are vested  benefits or which the Executive is otherwise  entitled
to  receive  under any plans or  programs  of the  Corporation,  AAI  and/or any
Affiliate of either at or subsequent to the Date of Termination shall be payable
in  accordance  with such  plans or  programs.  Notwithstanding  the  foregoing,
payments  to the  Executive  under  Section 6 hereof with the  exception  of the
Deferred Payment by AAI and the Corporation,  shall be in lieu of payments under
any severance plan or program.

     8. Settlement.  AAI's and the Corporation's obligation to make the payments
provided  for in  this  Agreement  and  otherwise  to  perform  its  obligations
hereunder  shall  not be  affected  by  any  circumstances,  including,  without
limitation,  any set-off (except set-off for a fixed and liquidated obligation),
counterclaim,   recoupment,   defense  or  other  right  which  AAI  and/or  the
Corporation  and/or any  Affiliates  may have  against the  Executive or others.
Notwithstanding  anything  contained herein to the contrary,  the obligations of
AAI and the Corporation hereunder for the payment of severance under Section 6.3
(a) shall be subject to Executive having executed and delivered an instrument to
AAI and the  Corporation  on the date of the receipt of such  severance  payment
irrevocably waiving and releasing AAI, the Corporation,  and each Affiliate from
any and all  obligations  or  liabilities to Executive and his heirs and assigns
(i) for the  specific  severance  payments  called for in Section 6.3 (a),  (ii)
arising  from or in  connection  with  Executive's  employment  with AAI and the
Corporation or (iii) the  termination of such  employment and any and all claims
Executive  may have  under  federal,  state or local  statutes,  regulations  or
ordinances  or under any  common law  principles  or breach of  contract  or the
covenant  of good  faith  and  fair  dealing,  defamation,  wrongful  discharge,
intentional  infliction of emotional distress or promissory estoppel;  provided,
however, such instrument of waiver and release to be executed by Executive shall
not be applicable to, reduce or otherwise  diminish or release either AAI or the
Corporation  from  their  obligation  to make  the  Deferred  Payment.  Further,
notwithstanding  anything  contained herein to the contrary,  the obligations of
AAI and the  Corporation  for the  timely and  proper  payment  of the  Deferred
Payment  shall  be  subject  to  Executive  having  executed  and  delivered  an
instrument  to AAI and  the  Corporation  on the  date  of the  receipt  of such
Deferred Payment  irrevocably  waiving and releasing AAI, the  Corporation,  and
each Affiliate from any and all  obligations or liabilities to Executive and his
heirs and assigns for such Deferred Payment.

     9. Legal Fees and Other Expenses.  In the event that a claim for payment or
benefits under this Agreement is disputed, the Executive shall be reimbursed for
all attorney fees and expenses incurred by the Executive in pursuing such claim,
provided  that the  Executive is  successful as to at least part of the disputed
claim by reason of  litigation,  arbitration  or  settlement.  In addition,  the
Executive  shall be paid or reimbursed for all legal fees and expenses  incurred
by the Executive in connection  with the review,  preparation and negotiation of
this  Agreement  and/or any other  agreements or plans  referenced  herein.  The
Executive shall also be entitled to recover pre-judgment interest at the rate of
10% per annum on the amount of any past due payment  obligations  under Sections
5.1,  5.2, 6.1 (a),  (b),  (d),  (e), 6.2 (a), (b), (d), (e), 6.3 (a), (b), (d),
(e), 6.4 (a),  (b),  (c), (d) and 6.5 (a),  (b), (c), (d) from the date any such
payment  was due  until  the  earlier  of the  date of  payment  in full of such
obligation  or the date of entry of a final  judgment  against  AAI  and/or  the
Corporation.

     10. Confidential Information and Nonsolicitation.

     10.1 Confidential Information.  The Executive shall not, during the Term of
          Employment and  thereafter,  without the prior express written consent
          of AAI and/or the Corporation,  disclose any confidential information,
          knowledge or data relating to AAI, the  Corporation,  or any Affiliate
          of either and their respective  businesses,  which (a) was obtained by
          the Executive in the course of the Executive's employment with AAI and
          the Corporation,  and (b) which is not information,  knowledge or data
          otherwise  in the public  domain  (other than by reason of a breach of
          this provision by the Executive),  unless required to do so by a court
          of law or equity or by any governmental agency or other authority.

     10.2 No  Solicitation.  The Executive hereby agrees that, if his employment
          hereunder is terminated by AAI and the Corporation for Cause or by the
          Executive  under  Section  6.4 of this  Agreement,  he shall not,  for
          twelve  (12)  months  after  the  Date  of  Termination,  directly  or
          indirectly,  divert,  solicit  or take away the  patronage  of (a) any
          customers or agents of the Corporation, AAI or any Affiliate of either
          as of  the  relevant  Date  of  Termination,  or (b)  any  prospective
          customers or agents of the  Corporation,  AAI or any  Affiliate  whose
          business the  Corporation  and/or AAI was actively  soliciting  on the
          relevant  Date of  Termination,  and  with  which  the  Executive  had
          business  contact  while  employed  by the  Corporation  and AAI.  The
          Executive  agrees  that,  under  the   circumstances   and  conditions
          described  above and for the same period of time, the Executive  shall
          not, directly or indirectly, induce or solicit any employees or agents
          of the  Corporation,  AAI or any  Affiliate  of  either  to  leave  or
          terminate their employment or agency relationship with the Corporation
          or AAI. The Corporation and AAI agrees that (i) any announcement  made
          by the Executive,  at any press  conference or in any press release or
          through individual notices, shall not, in and of itself, constitute an
          attempt directly or indirectly to induce, divert, solicit or take away
          customers  or  employees,   (ii)  any  such  announcement  creates  no
          presumption   with   respect  to  any  such   inducement,   diversion,
          solicitation  or  taking,  and (iii) in all cases  both the  burden of
          production  of evidence and the  ultimate  burden of  persuasion  with
          respect to any  allegations  or claims that this Section 10.2 has been
          breached or violated  by the  Executive  shall be borne by AAI and the
          Corporation.  Executive  agrees that all  restrictions  and agreements
          contained  in this Section 10,  including  without  limitation,  those
          relating to duration  and  restricted  territory,  are  necessary  and
          fundamental to the protection of the business of AAI, the  Corporation
          or any Affiliate,  and are  reasonable and valid,  and all defenses to
          the  strict  enforcement  thereof  by  Executive  are  hereby  waived.
          Executive  agrees  that  the  remedy  at law for such  breach  of this
          Agreement  will be  inadequate,  and that the damages from such breach
          are not readily  susceptible  to being  measured  in  monetary  terms.
          Accordingly,  Executive  agrees that upon  breach of this  Section 10,
          AAI, the  Corporation or any Affiliate  shall be entitled to immediate
          injunctive  relief and may obtain a temporary  order  restraining  any
          threatened  further breach.  Nothing in this Agreement shall be deemed
          to limit AAI's, the  Corporation's or any Affiliate's  remedies at law
          or in equity for any breach by Executive or any of the  provisions  of
          this  Agreement  that  may  be  pursued  or  availed  of by  AAI,  the
          Corporation or any Affiliate.

     11. Successors.

     11.1 The  Executive.  This  Agreement  is  personal to the  Executive  and,
          without the prior express written consent of AAI and the  Corporation,
          shall not be assignable by the Executive,  except that the Executive's
          rights to receive any  compensation  or benefits  under this Agreement
          may  be   transferred   or  disposed   of  pursuant  to   testamentary
          disposition,  intestate succession or pursuant to a domestic relations
          order. This Agreement shall inure to the benefit of and be enforceable
          by the Executive's heirs, beneficiaries and/or legal representatives.

     11.2 AAI and the Corporation.  This Agreement shall inure to the benefit of
          and be  binding  upon  AAI,  the  Corporation,  and  their  respective
          successors  and  assigns.  AAI shall  require any  successor to all or
          substantially all of the  Corporation's  and its Affiliates'  business
          and/or  assets,  whether  direct or  indirect,  by  purchase,  merger,
          consolidation,  acquisition of stock, or otherwise, by an agreement in
          form and substance satisfactory to the Executive,  expressly to assume
          and agree to perform this Agreement in the same manner and to the same
          extent as AAI and the  Corporation  would be required to perform if no
          such succession had taken place.

     12. Indemnification. AAI and the Corporation agree that if the Executive is
made a  party  or is  threatened  to be  made a  party  to any  action,  suit or
proceeding,   whether  civil,  criminal,   administrative  or  investigative  (a
"Proceeding"),  by reason of the fact that he is or was a director or officer of
AAI, the Corporation, and/or any Affiliate of either or is or was serving at the
request of the  Corporation,  AAI and/or any  Affiliate as a director,  officer,
member,  employee or agent of another  corporation  or of a  partnership,  joint
venture, trust or other enterprise,  including, without limitation, service with
respect to employee  benefit plans,  whether or not the basis of such Proceeding
is alleged  action in an  official  capacity  as a  director,  officer,  member,
employee or agent  while  serving as a director,  officer,  member,  employee or
agent,  he shall be indemnified  and held harmless by AAI and the Corporation to
the  fullest  extent  authorized  by  applicable  law, as the same exists or may
hereafter be amended, against all Expenses incurred or suffered by the Executive
in  connection  therewith,  and such  indemnification  shall  continue as to the
Executive even if the Executive has ceased to be an officer,  director or agent,
or is no longer  employed  by AAI and the  Corporation  and  shall  inure to the
benefit of his heirs,  executors and  administrators;  provided,  however,  that
Executive  shall not be  indemnified  for any act or omission  that  constitutes
gross negligence or willful misconduct.

     13. Miscellaneous.

     13.1 Applicable  Law. This Agreement  shall be governed by and construed in
          accordance  with  the  laws of the  State of  Texas,  applied  without
          reference to the principles of conflict of laws.

     13.2 Amendments.  This  Agreement may not be amended or modified  otherwise
          than by a written  agreement  executed by the parties  hereto or their
          respective successors and legal representatives.

     13.3 Notices.  All notices and other  communications  hereunder shall be in
          writing and shall be given by hand-delivery to the other parties or by
          registered  or  certified  mail,  return  receipt  requested,  postage
          prepaid, addressed as follows:

         If to the Executive:       Mr. Patrick H. O'Neill
                                    4001 Briarhaven Court
                                    Fort Worth, Texas 76109

         If to the Corporation:     Ascent Management, Inc.
                                    110 West Seventh Street, Suite 300
                                    Fort Worth, Texas 76102
                                Attention: President and Chief Operating Officer

         If to AAI:                 Ascent Assurance, Inc.
                                    110 West Seventh Street, Suite 300
                                    Fort Worth, Texas 76102
                                Attention: President and Chief Operating Officer

or to such other address as any party hereto shall have  furnished to the others
in writing in accordance herewith. Notices and communications shall be effective
when  actually  received  by  the  addressee.

     13.4 Withholding.  AAI and the  Corporation  may withhold  from any amounts
          payable under this Agreement such federal, state or local income taxes
          as shall be required to be withheld  pursuant to any applicable law or
          regulation.

     13.5 Severability.  The invalidity or  unenforceability of any provision of
          this Agreement shall not affect the validity or  enforceability of any
          other provision of this Agreement.

     13.6 Captions.  The  captions  of  this  Agreement  are  not  part  of  the
          provisions hereof and shall have no force or effect.

     13.7 Beneficiaries/References.  The  Executive  shall be entitled to select
          (and  change)  a   beneficiary   or   beneficiaries   to  receive  any
          compensation  or benefit payable  hereunder  following the Executive's
          death,  and may change such election,  in either case by giving AAI or
          the  Corporation   written  notice  thereof.   In  the  event  of  the
          Executive's  death or a judicial  determination  of his  incompetence,
          reference in this  Agreement to the Executive  shall be deemed,  where
          appropriate,  to refer to his beneficiary(ies),  estate or other legal
          representative(s).

     13.8 Entire Agreement. This Agreement contains the entire agreement between
          the parties  concerning  the subject  matter hereof and supersedes all
          prior  agreements,   understandings,   discussions,  negotiations  and
          undertakings,  whether  written  or oral,  between  the  parties  with
          respect thereto.

     13.9 Representations.  AAI and the Corporation each represents and warrants
          that  it  is  fully  authorized  and  empowered  to  enter  into  this
          Agreement.  The Executive represents and warrants that the performance
          of the  Executive's  duties under this  Agreement will not violate any
          agreement   between  the  Executive   and  any  other  person,   firm,
          partnership, corporation, or organization.

     13.10Survivorship.  The  respective  rights and  obligations of the parties
          hereunder  shall  survive any  termination  of this  Agreement  or the
          Executive's Term of Employment  hereunder for any reason to the extent
          necessary  to the  intended  provision of such rights and the intended
          performance of such obligations.

<PAGE>

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and
AAI, as well as the  Corporation  have each caused this Agreement to be executed
in its name on its behalf, and attested to by their respective Secretaries,  all
as of the day and year first above written.

                              Ascent Management, Inc.

Attest:                       By:  /s/ Patrick J. Mitchell
                                   Patrick J. Mitchell
/s/ Patrick H. O'Neill             Title: President and Chief Executive Officer

                              Ascent Assurance, Inc.

Attest:                       By:  /s/ Patrick J. Mitchell
                                   Patrick J. Mitchell
/s/ Patrick H. O'Neill             Title: President and Chief Executive Officer

                                   /s/ Patrick H. O'Neill
                                   Patrick H. O'Neill<PAGE>
CONFIDENTIAL
For Private Placement Purposes Only               Copy No. _________________

                UNIT 2002 EMPLOYEE OIL AND GAS LIMITED PARTNERSHIP
                              1000 Kensington Tower I
                                 7130 South Lewis
                               Tulsa, Oklahoma 74136
                                  (918) 493-7700

                               A PRIVATE OFFERING
                                       OF
                      UNITS OF LIMITED PARTNERSHIP INTEREST

                      _____________________________________

           THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER APPLICABLE STATE SECURITIES ACTS IN RELIANCE ON
EXEMPTIONS PROVIDED BY SUCH ACTS.  THESE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SUCH ACTS OR AN
OPINION OF CONNER & WINTERS ACCEPTABLE TO THE GENERAL PARTNER THAT SUCH
REGISTRATION IS NOT REQUIRED.  FURTHER, THE RESALE OF A UNIT  MAY RESULT IN
SUBSTANTIAL TAX LIABILITY TO THE INVESTOR.  SEE "FEDERAL INCOME TAX
CONSIDERATIONS."  ACCORDINGLY, THESE UNITS SHOULD BE CONSIDERED ONLY
FOR LONG-TERM INVESTMENT.  SEE "PLAN OF DISTRIBUTION -- SUITABILITY OF
INVESTORS."

                      _____________________________________

           THE INFORMATION CONTAINED IN THIS PRIVATE OFFERING MEMORANDUM IS
PROVIDED BY THE GENERAL PARTNER SOLELY FOR THE PERSONS RECEIVING IT FROM THE
GENERAL PARTNER AND ANY REPRODUCTION OR DISTRIBUTION OF THIS PRIVATE OFFERING
MEMORANDUM, IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF ITS CONTENTS IS
PROHIBITED AND MAY CONSTITUTE A VIOLATION OF CERTAIN STATE SECURITIES LAWS.  THE
OFFEREE, BY ACCEPTING DELIVERY OF THIS PRIVATE OFFERING MEMORANDUM, AGREES TO
RETURN IT AND ALL ENCLOSED DOCUMENTS TO THE GENERAL PARTNER IF THE OFFEREE DOES
NOT UNDERTAKE TO PURCHASE ANY OF THE UNITS OFFERED HEREBY.

                      _____________________________________

                Private Offering Memorandum Date December 20, 2001

<Page>
                               600 Preformation
                     Units of Limited Partnership Interest
                                   in the
                              UNIT 2002 EMPLOYEE
                       OIL AND GAS LIMITED PARTNERSHIP

                    _____________________________________

                        $1,000 Per Unit Plus Possible
                   Additional Assessments of $100 Per Unit
                       (Minimum Investment - 2 Units)
                  Minimum Aggregate Subscriptions Necessary
                       to Form Partnership - 50 Units
                    _____________________________________

      A maximum of 600 (minimum of 50) units of limited partnership interest
("Units") in the UNIT 2002 EMPLOYEE OIL AND GAS LIMITED PARTNERSHIP, a proposed
Oklahoma limited partnership (the "Partnership"), are being offered privately
only to certain employees of Unit Corporation ("UNIT") and its subsidiaries and
the directors of UNIT at a price of $1,000 per Unit.  Subscriptions shall be for
not less than 2 Units ($2,000).  The Partnership is being formed for the
purpose of conducting oil and gas drilling and development operations.
Purchasers of the Units will become Limited Partners in the Partnership.  Unit
Petroleum Company ("UPC" or the "General Partner") will serve as General Partner
of the Partnership.  UPC's address is 1000 Kensington Tower I, 7130 South Lewis
Avenue, Tulsa, Oklahoma 74136, and telephone (918) 493-7700.

                THE RIGHTS AND OBLIGATIONS OF THE GENERAL PARTNER
                   AND THE LIMITED PARTNERS ARE GOVERNED BY THE
                AGREEMENT OF LIMITED PARTNERSHIP (THE "AGREEMENT"),
                A COPY OF WHICH ACCOMPANIES THIS MEMORANDUM AND IS
                       INCORPORATED HEREIN BY REFERENCE

               AN INVESTMENT IN THE UNITS IS SPECULATIVE AND INVOLVES
                A HIGH DEGREE OF RISK.  SEE "RISK FACTORS".  CERTAIN
                          SIGNIFICANT RISKS INCLUDE:

          .    Drilling to establish productive oil and natural gas properties
               is inherently speculative.

          .    Participants will rely solely on the management capability and
               expertise of the General Partner.

          .    Limited Partners must assume the risks of an illiquid investment.

          .    Investment in the Units is suitable only for investors having
               sufficient financial resources and who desire a long-term
               investment.

          .    Conflicts of interest exist and additional conflicts of interest
               may arise between the General Partner and the Limited Partners,
               and there are no pre-determined procedures for resolving any such
               conflicts.

                                     ii

<PAGE>
          .    Significant tax considerations to be considered by an
               investor include:

               .    possible audit of income tax returns of the Partnership
                    and/or the Limited Partners and adjustment to their reported
                    tax liabilities; and

               .    a Limited Partner will not benefit from his or her shares of
                    Partnership deductions in excess of his or her share of
                    Partnership income unless he or she has passive income from
                    other activities.

          .    There can be no assurance that the Partnership will have adequate
               funds to provide cash distributions to the Limited Partners.  The
               amount and timing of any such distributions will be within the
               complete discretion of the General Partner.

          .    The amount of any cash distribution which a Limited Partner may
               receive from the Partnership could be insufficient to pay the tax
               liability incurred by such Limited Partner with respect to income
               or gain allocated to such Limited Partner by the Partnership.

          .    Certain provisions in the Agreement modify what would otherwise
               be the applicable Oklahoma law as to the fiduciary standards for
               general partners in limited partnerships.  Those standards in the
               Agreement could be less advantageous to the Limited Partners than
               the corresponding fiduciary standards otherwise applicable under
               Oklahoma law.  The purchase of Units may be deemed as consent to
               the fiduciary standards set forth in the Agreement.
                        _____________________________________

           EXCEPT AS STATED HEREIN UNDER "ADDITIONAL INFORMATION," NO PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER
THAN THOSE CONTAINED IN THIS PRIVATE OFFERING MEMORANDUM IN CONNECTION WITH THIS
OFFERING AND SUCH REPRESENTATIONS, IF ANY, MAY NOT BE RELIED UPON.  THE
INFORMATION CONTAINED IN THIS PRIVATE OFFERING MEMORANDUM IS AS OF THE DATE
HEREOF UNLESS ANOTHER DATE IS SPECIFIED.
                        _____________________________________

           PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF
THIS PRIVATE OFFERING MEMORANDUM AS LEGAL, BUSINESS, OR TAX ADVICE.
EACH INVESTOR SHOULD CONSULT HIS OR HER OWN ATTORNEY, BUSINESS ADVISOR
AND TAX ADVISOR AS TO LEGAL, BUSINESS, TAX AND RELATED MATTERS
CONCERNING HIS OR HER INVESTMENT.  PROSPECTIVE INVESTORS ARE URGED TO
REQUEST ANY ADDITIONAL INFORMATION THEY MAY CONSIDER NECESSARY TO MAKE
AN INFORMED INVESTMENT DECISION.

                        _____________________________________

                                     iii

<PAGE>
           THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, THE OKLAHOMA SECURITIES
COMMISSION OR BY THE SECURITIES REGULATORY AUTHORITY OF ANY OTHER STATE, NOR HAS
ANY COMMISSION OR AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING
OR THE ACCURACY OR ADEQUACY OF THIS PRIVATE OFFERING MEMORANDUM.  ANY
REPRESENTATION CONTRARY TO THE FOREGOING IS UNLAWFUL.

                        _____________________________________

           THESE UNITS ARE BEING OFFERED SUBJECT TO PRIOR SALE, TO WITHDRAWAL,
CANCELLATION OR MODIFICATION OF THE OFFER WITHOUT NOTICE AND TO THE FURTHER
CONDITIONS SET FORTH HEREIN.

                        _____________________________________

           IN CONNECTION WITH THE REGISTRATION OF THE PARTNERSHIP AS A "TAX
SHELTER" PURSUANT TO SECTION 6111 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, PLEASE NOTE THAT ISSUANCE OF A REGISTRATION NUMBER DOES NOT INDICATE
THAT AN INVESTMENT IN THE PARTNERSHIP OR THE CLAIMED TAX BENEFITS THEREFROM HAVE
BEEN REVIEWED, EXAMINED OR APPROVED BY THE INTERNAL REVENUE SERVICE.

                        _____________________________________

                               ADDITIONAL INFORMATION
                               ----------------------

           Each prospective investor, or his or her qualified representative
named in writing, is hereby offered the opportunity (1) to obtain additional
information necessary to verify the accuracy of the information supplied
herewith or hereafter, and (2) to ask questions and receive answers concerning
the terms and conditions of the offering.  If you desire to avail yourself of
the opportunity, please contact:

                               Mark E. Schell, Esq.
                             1000 Kensington Tower I
                                7130 South Lewis
                              Tulsa, Oklahoma 74136
                                 (918) 493-7700

                                     iv

<PAGE>
          The following documents and instruments are available to qualified
          offerees upon written request:

                1.   Amended and Restated Certificate of Incorporation and By-
                     Laws of UNIT.

                2.   Certificate of Incorporation and By-Laws of Unit Petroleum
                     Company.

                3.   UNIT's Employees' Thrift Plan.

                4.   UNIT's Amended and Restated Stock Option Plan and related
                     prospectuses covering shares of Common Stock issuable upon
                     exercise of outstanding options.

                5.   UNIT's Non Employee Directors' Stock Option Plan.

                6.   The Credit Agreement and the notes payable of UNIT.

                7.   All periodic reports on Forms 10-K, 10-Q and 8-K and all
                     proxy materials filed by or on behalf of UNIT with the
                     Securities and Exchange Commission pursuant to the
                     Securities Exchange Act of 1934, as amended, during
                     calendar year 2001, the annual report to shareholders and
                     all quarterly reports to shareholders submitted by UNIT to
                     its shareholders during calendar year 2001.

                8.   The agreements of limited partnership for the prior oil and
                     gas drilling programs and prior employee programs of Unit
                     Petroleum Company, UNIT and Unit Drilling and Exploration
                     Company ("UDEC").

                9.   All periodic reports filed with the Securities and Exchange
                     Commission and all reports and information provided to
                     limited partners in all limited partnerships of which Unit
                     Petroleum Company, UNIT or UDEC now serves or has served in
                     the past as a general partner.

                10.  The agreement of limited partnership for the Unit 1986
                     Energy Income Limited Partnership.

                                     v

<PAGE>
                              SUMMARY OF CONTENTS
                              -------------------
                                                                           Page
                                                                           ----
SUMMARY OF PROGRAM.......................................................... 1
  Terms of the Offering..................................................... 1
  Risk Factors.............................................................. 2
  Additional Financing...................................................... 4
  Proposed Activities....................................................... 4
  Application of Proceeds................................................... 5
  Participation in Costs and Revenues....................................... 6
  Compensation.............................................................. 6
  Federal Income Tax Considerations; Opinion of Counsel..................... 6
RISK FACTORS................................................................ 7
    INVESTMENT RISKS........................................................ 7
    TAX STATUS AND TAX RISKS................................................14
    OPERATIONAL RISKS.......................................................15
TERMS OF THE OFFERING.......................................................17
  General...................................................................17
  Limited Partnership Interests.............................................17
  Subscription Rights.......................................................18
  Payment for Units; Delinquent Installment.................................19
  Right of Presentment......................................................20
  Rollup or Consolidation of Partnership....................................21
ADDITIONAL FINANCING........................................................22
  Additional Assessments....................................................22
  Prior Programs............................................................23
  Partnership Borrowings....................................................23
PLAN OF DISTRIBUTION........................................................24
  Suitability of Investors..................................................24
RELATIONSHIP OF THE PARTNERSHIP, THE GENERAL PARTNER AND AFFILIATES.........24
PROPOSED ACTIVITIES.........................................................25
  General...................................................................25
  Partnership Objectives....................................................28
  Areas of Interest.........................................................28
  Transfer of Properties....................................................28
  Record Title to Partnership Properties....................................29
  Marketing of Reserves.....................................................29
  Conduct of Operations.....................................................29
APPLICATION OF PROCEEDS.....................................................30
PARTICIPATION IN COSTS AND REVENUES.........................................30
COMPENSATION................................................................32
  Supervision of Operations.................................................32
  Purchase of Equipment and Provision of Services...........................33
  Prior Programs............................................................33
MANAGEMENT..................................................................35
  The General Partner.......................................................35
  Officers, Directors and Key Employees.....................................35
  Prior Employee Programs...................................................38
  Ownership of Common Stock.................................................40
  Interest of Management in Certain Transactions............................41
CONFLICTS OF INTEREST.......................................................41
  Acquisition of Properties and Drilling Operations.........................42
  Participation in UNIT's Drilling or Income Programs.......................43
  Transfer of Properties....................................................43
  Partnership Assets........................................................44
  Transactions with the General Partner or Affiliates.......................44
  Right of Presentment Price Determination..................................45
  Receipt of Compensation Regardless of Profitability.......................45
  Legal Counsel.............................................................45
FIDUCIARY RESPONSIBILITY....................................................45
  General...................................................................45

                                     vi

<PAGE>
  Liability and Indemnification.............................................46
PRIOR ACTIVITIES............................................................47
  Prior Employee Programs...................................................49
  Results of the Prior Oil and Gas Programs.................................50
FEDERAL INCOME TAX CONSIDERATIONS...........................................60
  Summary of Conclusions....................................................60
  General Tax Effects of Partnership Structure..............................63
  Ownership of Partnership Properties.......................................64
  Intangible Drilling and Development Costs Deductions......................65
  Depletion Deductions......................................................66
  Depreciation Deductions...................................................66
  Interest Deductions.......................................................67
  Transaction Fees..........................................................67
  Basis and At Risk Limitations.............................................68
  Passive Loss Limitations..................................................68
  Alternative Minimum Tax...................................................69
  Gain or Loss on Sale of Property or Units.................................69
  Partnership Distributions.................................................70
  Partnership Allocations...................................................70
  Profit Motive.............................................................70
  Administrative Matters....................................................71
  Accounting Methods and Periods............................................72
  State and Local Taxes.....................................................72
  Individual Tax Advice Should Be Sought....................................72
COMPETITION, MARKETS AND REGULATION.........................................73
  Marketing of Production...................................................73
  Regulation of Partnership Operations......................................74
  Natural Gas Price Regulation..............................................74
  Oil Price Regulation......................................................78
  State Regulation of Oil and Gas Production................................78
  Legislative and Regulatory Production and Pricing Proposals...............78
  Production and Environmental Regulation...................................79
SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT................................80
  Partnership Distributions.................................................80
  Deposit and Use of Funds..................................................80
  Power and Authority.......................................................81
  Rollup or Consolidation of the Partnership................................81
  Limited Liability.........................................................82
  Records, Reports and Returns..............................................83
  Transferability of Interests..............................................83
  Amendments................................................................85
  Voting Rights.............................................................85
  Exculpation and Indemnification of the General Partner....................86
  Termination...............................................................86
  Insurance.................................................................87
COUNSEL.....................................................................87
GLOSSARY....................................................................87
FINANCIAL STATEMENTS........................................................91

EXHIBIT A     - AGREEMENT OF LIMITED PARTNERSHIP
EXHIBIT B     - LEGAL OPINION

                                     vii

<PAGE>
                               SUMMARY OF PROGRAM

     This summary does not purport to be a complete description of the terms and
consequences of an investment in the Partnership and is qualified in its
entirety by the more detailed information appearing throughout this Private
Offering Memorandum (this "Memorandum").  For definitions of certain terms used
in this Memorandum, see "GLOSSARY".

Terms of the Offering

     Limited Partnership Interests.  Unit 2002 Employee Oil and Gas Limited
Partnership, a proposed Oklahoma limited partnership (the "Partnership"), hereby
offers 600 preformation units of limited partnership interest ("Units") in the
Partnership.  The offer is made only to certain employees of Unit Corporation
("UNIT") and its subsidiaries and directors of UNIT (see "TERMS OF THE OFFERING
-- Subscription Rights").  Unless the context otherwise requires, all references
in this Memorandum to UNIT shall include all or any of its subsidiaries.  Unit
Petroleum Company ("UPC" or the "General Partner"), a wholly owned subsidiary of
UNIT, will serve as General Partner of the Partnership.

     To invest in the Units, the Limited Partner Subscription Agreement and
Suitability Statement (the "Subscription Agreement") (see Attachment I to
Exhibit A hereto) must be executed and forwarded to the offices of the General
Partner at its address listed on the cover of this Memorandum.  The Subscription
Agreement must be received by the General Partner not later than 5:00 P.M.
Central Standard Time on {Closing Date} (extendable by the General Partner for
up to 30 days).  Subscription Agreements may be delivered to the office of the
General Partner.  No payment is required upon delivery of the Subscription
Agreement.  Payment for the Units will be made either (i) in four equal
Installments, the first of such Installments being due on March 15, 2002 and the
remaining three of such Installments being due on June 15, 2002, September 15,
2002 and December 15, 2002, respectively, or (ii) through equal deductions from
2002 salary commencing immediately after formation of the Partnership.

     The purchase price of each Unit is $1,000, and the minimum permissible
purchase is two Units ($2,000) for each subscriber.  Additional Assessments of
up to $100 per Unit may be required (see "ADDITIONAL FINANCING -- Additional
Assessments").  Maximum purchases by employees (other than directors) will be
for an amount equal to one-half of their base salaries for calendar year 2002.
Each member of the Board of Directors of UNIT may subscribe for up to 200 Units
($200,000).  The Partnership must sell at least 50 Units ($50,000) before the
Partnership will be formed.  No Units will be offered for sale after the
Effective Date (see "GLOSSARY") except upon compliance with the provisions of
Article XIII of the Agreement.  The General Partner may, at its option, purchase
Units as a Limited Partner, including any amount that may be necessary to meet
the minimum number of Units required for formation of the Partnership.  The
Partnership will terminate on December 31, 2032, unless it is terminated earlier
pursuant to the provisions of the Agreement or by operation of law.  See "TERMS
OF THE OFFERING -- Limited Partnership Interests"; "TERMS OF THE OFFERING --
Subscription Rights"; and "SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT --
Termination."

     Units will be offered only to those qualified employees of UNIT or any of
its subsidiaries at the date of formation of the Partnership whose annual base
salaries for 2002 have been set at $22,680 or more and Directors of UNIT who
meet certain financial requirements which will enable them to bear the economic
risks of an investment in the Partnership and who can demonstrate that they have
sufficient

                                     1

<PAGE>
investment experience and expertise to evaluate the risks and merits of such an
investment.  The offering will be made privately by the officers and directors
of UPC or UNIT, except that in states which require participation by a
registered broker-dealer in the offer and sale of securities, the Units will be
offered through such broker-dealer as may be selected by the General Partner.
Any participating broker-dealer may be reimbursed for actual out-of-pocket
expenses.  Such reimbursements will be borne by the General Partner.

     Subscription Rights.  Only salaried employees of UNIT or any of its
subsidiaries who are exempt under the Fair Labor Standards Act and whose annual
base salaries for 2002 have been set at $22,680 or more and directors of UNIT
are eligible to subscribe for Units.  Employees may not purchase Units for an
amount in excess of one-half of their base salaries for calendar year 2002.
Directors' subscriptions may not be for more than 200 Units ($200,000).  Only
employees and directors who are U.S. citizens are eligible to participate in the
offering.  In addition, employees and directors must be able to bear the
economic risks of an investment in the Partnership and must have sufficient
investment experience and expertise to evaluate the risks and merits of such an
investment.  See "TERMS OF THE OFFERING -- Subscription Rights."

     Right of Presentment.  After December 31, 2003 and annually thereafter, the
Limited Partners will have the right to present their Units to the General
Partner for purchase.  The General Partner will not be obligated to purchase
more than 20% of the then outstanding Units in any one calendar year.   The
purchase price to be paid for the Units will be determined by a specific
valuation formula.  See "TERMS OF THE OFFERING -- Right of Presentment" for a
description of the valuation formula and a discussion of the manner in which the
right of presentment may be exercised by the Limited Partners.

Risk Factors

     An investment in the Partnership has many risks.  The "RISK FACTORS"
section of this Memorandum contains a detailed discussion of the most important
risks, organized into Investment Risks (the risks related to the Partnership's
investment in oil and gas properties and drilling activities, to an investment
in the Partnership and to the provisions of the Agreement); Tax Risks (the risks
arising from the tax laws as they apply to the Partnership and its investment in
oil and gas properties and drilling activities); and Operational Risks (the
risks involved in conducting oil and gas operations).  The following are certain
of the risks which are more fully described under "RISK FACTORS".  Each
prospective investor should review the "RISK FACTORS" section carefully before
deciding to subscribe for Units.

Investment Risks:

     .    Future oil and natural gas prices are unpredictable.  If oil and
          natural gas prices go down, the Partnership's distributions, if any,
          to the Limited Partners will be adversely affected.

     .    The General Partner is authorized under the Agreement to cause, in its
          sole discretion, the sale or transfer of the Partnership's assets to,
          or the merger or consolidation of the Partnership with, another
          partnership, corporation or other business entity.  Such action could
          have a material impact on the nature of the investment of all Limited
          Partners.

     .    Except for certain transfers to the General Partner and other
          restricted transfers, the Agreement prohibits a Limited Partner from
          transferring Units.  Thus, except for the limited right of the Limited
          Partners after December 31, 2003 to present their Units to the

                                     2

<PAGE>
          General Partner for purchase, Limited Partners will not be able to
          liquidate their investments.

     .    The Partnership could be formed with as little as $50,000 in Capital
          Contributions (excluding the Capital Contributions of the General
          Partner).  As the total amount of Capital Contributions to the
          Partnership will determine the number and diversification of
          Partnership Properties, the ability of the Partnership to pursue its
          investment objectives may be restricted in the event that the
          Partnership receives only the minimum amount of Capital Contributions.

     .    The drilling and completion operations to be undertaken by the
          Partnership for the development of oil and natural gas reserves
          involve the possibility of a total loss of an investment in the
          Partnership.

     .    The General Partner will have the exclusive management and control of
          all aspects of the business of the Partnership.  The Limited Partners
          will have no opportunity to participate in the management and control
          of any aspect of the Partnership's activities.  Accordingly, the
          Limited Partners will be entirely dependent upon the management skills
          and expertise of the General Partner.

     .    Conflicts of interest exist and additional conflicts of interest may
          arise between the General Partner and the Limited Partners, and there
          are no pre-determined procedures for resolving any such conflicts.
          Accordingly the General Partner could cause the Partnership to take
          actions to the benefit of the General Partner but not to the benefit
          of the Limited Partners.

     .    Certain provisions in the Agreement modify what would otherwise be the
          applicable Oklahoma law as to the fiduciary standards for a general
          partner in a limited partnership.  The fiduciary standards in the
          Agreement could be less advantageous to the Limited Partners and more
          advantageous to the General Partner than corresponding fiduciary
          standards otherwise applicable under Oklahoma law.  The purchase of
          Units may be deemed as consent to the fiduciary standards set forth in
          the Agreement.

     .    There can be no assurances that the Partnership will have adequate
          funds to provide cash distributions to the Limited Partners.  The
          amount and timing of any such distributions will be within the
          complete discretion of the General Partner.

     .    The amount of any cash distributions which Limited Partners may
          receive from the Partnership could be insufficient to pay the tax
          liability incurred by such Limited Partners with respect to income or
          gain allocated to such Limited Partners by the Partnership.

Tax Risks:

     .    Tax laws and regulations applicable to partnership investments may
          change at any time and these changes may be applicable retroactively.

     .    Certain allocations of income, gain, loss and deduction of the
          Partnership among the Partners may be challenged by the Internal
          Revenue Service (the "Service").  A

                                     3
<PAGE>
          successful challenge would likely result in a Limited Partner having
          to report additional taxable income or being denied a deduction.

     .    Investment as a Limited Partner may be less advisable for a person who
          does not have substantial current taxable income from passive trade or
          business activities in which the Limited Partner does not materially
          participate.

     .    Federal income tax payable by a Limited Partner by reason of his or
          her allocated share of Partnership income for any year may exceed the
          Partnership distributions to a Limited Partner for the year.

Operational Risks:

     .    The search for oil and gas is highly speculative and the drilling
          activities conducted by the Partnership may result in a well that may
          be dry or productive wells that do not produce sufficient oil and gas
          to produce a profit or result in a return of the Limited Partners'
          investment.

     .    Certain hazards may be encountered in drilling wells which could lead
          to substantial liabilities to third parties or governmental entities.
          In addition, governmental regulations or new laws relating to
          environmental matters could increase Partnership costs, delay or
          prevent drilling a well, require the Partnership to cease operations
          in certain areas or expose the Partnership to significant liabilities
          for violations of such laws and regulations.

Additional Financing

     Additional Assessments.  After the Aggregate Subscription received from the
Limited Partners has been fully expended or committed and the General Partner's
Minimum Capital Contribution has been fully expended, the General Partner may
make one or more calls for Additional Assessments from the Limited Partners if
additional funds are required to pay the Limited Partners' share of Drilling
Costs, Special Production and Marketing Costs or Leasehold Acquisition Costs.
The maximum amount of total Additional Assessments which may be called for by
the General Partner is $100 per Unit.  See "ADDITIONAL FINANCING -- Additional
Assessments".

     Partnership Borrowings.  After the General Partner's Minimum Capital
Contribution has been expended, the General Partner may cause the Partnership to
borrow funds required to pay Drilling Costs, Special Production and Marketing
Costs or Leasehold Acquisition Costs of Productive properties.  Additionally,
the General Partner may, but is not required to, advance funds to the
Partnership to pay such costs.  See "ADDITIONAL FINANCING -- Partnership
Borrowings".

Proposed Activities

     General.  The Partnership is being formed for the purposes of acquiring
producing oil and gas properties and conducting oil and gas drilling and
development operations.  The Partnership will, with certain limited exceptions,
participate on a proportionate basis with UPC in each producing oil and gas
lease acquired and in each oil and gas well commenced by UPC for its own account
or by UNIT during the period from January 1, 2002, if the Partnership is formed
prior to such date or from the date of the formation of the Partnership if
subsequent to January 1, 2002, until December 31, 2002, and will, with

                                     4

<PAGE>
certain limited exceptions, serve as a co-general partner with UNIT in any
drilling or income programs which may be formed by the General Partner or UNIT
in 2002.  See "PROPOSED ACTIVITIES".

     Partnership Objectives.  The Partnership is being formed to provide
eligible employees and directors the opportunity to participate in the oil and
gas exploration and producing property acquisition activities of UNIT during
2002.  UNIT hopes that participation in the Partnership will provide the
participants with greater proprietary interests in UNIT's operations and the
potential for realizing a more direct benefit in the event these operations
prove to be profitable.  The Partnership has been structured to achieve the
objective of providing the Limited Partners with essentially the same economic
returns that UNIT realizes from the wells drilled or acquired during 2002.

Application of Proceeds

     The offering proceeds will be used to pay the Leasehold Acquisition Costs
incurred by the Partnership to acquire those producing oil and gas leases in
which the Partnership participates and the Leasehold Acquisition Costs,
exploration, drilling and development costs incurred by the Partnership pursuant
to drilling activities in which the Partnership participates.  The General
Partner estimates (based on historical operating experience) that such costs may
be expended as shown below based on the assumption of a maximum number of
subscriptions in the first column and a minimum number of subscriptions in the
second column:

                                               $600,000       $50,000
                                                Program       Program
                                             ------------  ------------
Leasehold Acquisition Costs
 of Properties to Be Drilled................    $30,000        $2,500

Drilling Costs of Exploratory
 Wells(1)...................................     30,000         2,500

Drilling Costs of Development
 Wells(1)...................................    420,000        35,000

Leasehold Acquisition Costs of
 Productive Properties......................    120,000        10,000

Reimbursement of General
 Partner's Overhead Costs(2)................       --            --
                                             ------------  ------------
Total.......................................   $600,000       $50,000
_______________
(1)  See "GLOSSARY."

(2)  The Agreement provides that the General Partner shall be reimbursed by the
Partnership for that portion of its general and administrative overhead expense
attributable to its conduct of Partnership business and affairs but such
reimbursement will be made only out of Partnership Revenue.  See "COMPENSATION."

                                     5

<PAGE>
Participation in Costs and Revenues

     Partnership costs, expenses and revenues will be allocated among the
Partners in the following percentages:

                                                    General        Limited
COSTS AND EXPENSES                                  Partner        Partners
                                                    --------       --------
 Organizational and offering costs of the
   Partnership and any drilling or income
   programs in which the Partnership
   participates as a co-general partner.......        100%             0%

 All other Partnership costs and expenses

   Prior to time Limited Partner Capital
     Contributions are entirely expended......          1%            99%

   After expenditure of Limited Partner
     Capital Contributions and until
     expenditure of General Partner's
     Minimum Capital Contribution.............        100%             0%

                                                    General          Limited
   After expenditure of General Partner's          Partner's        Partners'
     Minimum Capital Contribution.............   Percentage(1)    Percentage(1)

                                                    General          Limited
                                                   Partner's        Partners'
REVENUES......................................   Percentage(1)    Percentage(1)
_______________
1)  See "GLOSSARY."

Compensation

     The General Partner will not receive any management fees in connection with
the operation of the Partnership.  The Partnership will reimburse the General
Partner for that portion of its general and administrative overhead expense
attributable to its conduct of Partnership business and affairs.  See
"COMPENSATION."

Federal Income Tax Considerations; Opinion of Counsel

     The General Partner has received an opinion from its tax counsel, Conner &
Winters, P.C. ("Conner & Winters"), concerning all material federal income tax
issues applicable to an investment in the Partnership.  To be fully understood,
the complete discussion of these matters set forth in the full tax opinion in
Exhibit B should be read by each prospective investor.  Based upon current laws,
regulations, interpretations, and court decisions, Conner & Winters has rendered
its opinion that (i) the material federal income tax benefits in the aggregate
from an investment in the Partnership will be realized; (ii) the Partnership
will be treated as a partnership for federal income tax purposes and not as a
corporation and not as an association taxable as a corporation; (iii) to the
extent the Partnership's wells are timely drilled and its drilling costs are
timely paid, then subject to the limitations on deductions discussed in

                                     6

<PAGE>
such opinion, the Partners will be entitled to claim as deductions their pro
rata shares of the Partnership's intangible drilling and development costs
("IDC") paid in 2002; (iv) for most Limited Partners, the Partnership's
operations will be considered a passive activity within the meaning of Section
469 of the Internal Revenue Code of 1986, as amended (the "Code"), and losses
generated therefrom will be limited by the passive activity provisions of the
Code; (v) to the extent provided herein, the Partners' distributive shares of
Partnership tax items will be determined and allocated substantially in
accordance with the terms of the Partnership Agreement; and (vi) the Partnership
will not be required to register with the Service as a tax shelter.

     Due to the lack of authority regarding, or the essentially factual nature
of certain issues, Conner & Winters expresses no opinion on the following:  (i)
the impact of an investment in the Partnership on an investor's alternative
minimum tax liability; (ii) whether, under Code Section 183, the losses of the
Partnership will be treated as derived from "activities not engaged in for
profit," and therefore nondeductible from other gross income (due to the
inherently factual nature of a Partner's interest and motive in investing in the
Partnership); (iii) whether any of the Partnership's properties will be
considered "proven" for purposes of depletion deductions; (iv) whether any
interest incurred by a Partner with respect to any borrowings incurred to
purchase Units will be deductible or subject to limitations on deductibility;
and (v) whether the Partnership will be treated as the tax owner of Partnership
Properties acquired by the General Partner as nominee for the Partnership.

     THIS MEMORANDUM CONTAINS AN EXPLANATION OF THE MORE SIGNIFICANT TERMS AND
PROVISIONS OF THE AGREEMENT OF LIMITED PARTNERSHIP WHICH IS ATTACHED AS EXHIBIT
A.  THE SUMMARY OF THE AGREEMENT CONTAINED IN THIS MEMORANDUM IS QUALIFIED IN
ITS ENTIRETY BY SUCH REFERENCE AND ACCORDINGLY THE AGREEMENT SHOULD BE CAREFULLY
REVIEWED AND CONSIDERED.

                                 RISK FACTORS

     Prospective purchasers of Units should carefully study the information
contained in this Memorandum and should make their own evaluations of the
probability for the discovery of oil and natural gas through exploration.

INVESTMENT RISKS

Financial Risks of Drilling Operations

     The Partnership will participate with the General Partner (including, with
certain limited exceptions, other drilling programs sponsored by it, or UNIT)
and, in some cases, other parties ("joint interest parties") in connection with
drilling operations conducted on properties in which the Partnership has an
interest.  It is not anticipated that all such drilling operations will be
conducted under turnkey drilling contracts and, thus, all of the parties
participating in the drilling operations on a particular property, including the
Partnership, may be fully liable for their proportionate share of all costs of
such operations even if the actual costs significantly exceed the original cost
estimates.  Further, if any joint interest party defaults in its obligation to
pay its share of the costs, the other joint interest parties may be required to
fund the deficiency until, if ever, it can be collected from the defaulting
party.  As a result of forced pooling or similar proceedings (see "COMPETITION,
MARKETS AND REGULATION"), the Partnership may acquire larger fractional
interests in Partnership Properties than originally anticipated and, thus, be
required to bear a greater share of the costs of operations.  As a result

                                     7
<PAGE>
of the foregoing, the Partnership could become liable for amounts significantly
in excess of the amounts originally anticipated to be expended in connection
with the operations and, in such event, would have only limited means for
providing needed additional funds (see "ADDITIONAL FINANCING").  Also, if a well
is operated by a company which does not or cannot pay the costs and expenses of
drilling or operating a Partnership Well, the Partnership's interest in such
well may become subject to liens and claims of creditors who supplied services
or materials in connection with such operations even though the Partnership may
have previously paid its share of such costs and expenses to the operator.  If
the operator is unable or unwilling to pay the amount due, the Partnership might
have to pay its share of the amounts owing to such creditors in order to
preserve its interest in the well which would mean that it would, in effect, be
paying for certain of such costs and expenses twice.

Dependence Upon General Partner

     The Limited Partners will acquire interests in the Partnership, not in the
General Partner or UNIT.  They will not participate in either increases or
decreases in the General Partner's or UNIT's net worth or the value of its
common stock.  Nevertheless, because the General Partner is primarily
responsible for the proper conduct of the Partnership's business and affairs and
is obligated to provide certain funds that will be required in connection with
its operations, a significant financial reversal for the General Partner or UNIT
could have an adverse effect on the Partnership and the Limited Partners'
interests therein.

     Under the Partnership Agreement, UPC is designated as the General Partner
of the Partnership and is given the exclusive authority to manage and operate
the Partnership's business.  See "SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT -
- Power and Authority".  Accordingly, Limited Partners must rely solely on the
General Partner to make all decisions on behalf of the Partnership, as the
Limited Partners will have no role in the management of the business of the
Partnership.

     The Partnership's success will depend, in part, upon the management
provided by the General Partner, the ability of the General Partner to select
and acquire oil and gas properties on which Partnership Wells capable of
producing oil and natural gas in commercial quantities may be drilled, to fund
the acquisition of revenue producing properties, and to market oil and natural
gas produced from Partnership Wells.

Conflicts of Interest

     UNIT and its subsidiaries have engaged in oil and gas exploration and
development and in the acquisition of producing properties for their own account
and as the sponsors of drilling and income programs formed with third party
investors.  It is anticipated that UNIT and its subsidiaries will continue to
engage in such activities.  However, with certain exceptions, it is likely that
the Partnership will participate as a working interest owner in all producing
oil and gas leases acquired and in all oil and gas wells commenced by the
General Partner or UNIT for its own account during the period from January 1,
2002, if the Partnership is formed prior to such date, or from the date of the
formation of the Partnership, if subsequent to January 1, 2002, through December
31, 2002 and, with certain limited exceptions, will be a co-general partner of
any drilling or income programs, or both, formed by the General Partner or UNIT
in 2002.  The General Partner will determine which prospects will be acquired or
drilled.  With respect to prospects to be drilled, certain of the wells which
are drilled for the separate account of the Partnership and the General Partner
may be drilled on prospects on which initial drilling operations were conducted
by UNIT or the General Partner prior to the formation of the Partnership.
Further, certain of the Partnership Wells will be drilled on prospects on which
the General Partner and possibly future

                                     8

<PAGE>
employee programs may conduct additional drilling operations in years subsequent
to 2002.  Except with respect to its participation as a co-general partner of
any drilling or income program sponsored by the General Partner or UNIT, the
Partnership will have an interest only in those wells begun in 2002 and will
have no rights in production from wells commenced in years other than 2002.
Likewise, if additional interests are acquired in wells participated in by the
Partnership after 2002, the Partnership will generally not be entitled to
participate in the acquisition of such additional interests.  See "CONFLICTS OF
INTEREST -- Acquisition of Properties and Drilling Operations."

     The Partnership may enter into contracts for the drilling of some or all of
the Partnership Wells with affiliates of the General Partner.  Likewise the
Partnership may sell or market some or all of its natural gas production to an
affiliate of the General Partner.  These contracts may not necessarily be
negotiated on an arm's - length basis.  The General Partner is subject to a
conflict of interest in selecting an affiliate of the General Partner to drill
the Partnership Wells and/or market the natural gas therefrom.  The compensation
under these contracts will be determined at the time of entering into each such
contract, and the costs to be paid thereunder or the sale price to be received
will be one which is competitive with the costs charged or the prices paid by
unaffiliated parties in the same geographic region.  The General Partner will
make the determination of what are competitive rates or prices in the area.  No
provision has been made for an independent review of the fairness and
reasonableness of such compensation.  See "CONFLICTS OF INTERESTS --
Transactions with the General Partner or Affiliates".

Prohibition on Transferability; Lack of Liquidity

     Except for certain transfers (i) to the General Partner, (ii) to
or for the benefit of the transferor Limited Partner or members of his
or her immediate family sharing the same residence, and (iii) by
reason of death or operation of law, a Limited Partner may not
transfer or assign Units.  The General Partner has agreed, however,
that it will, if requested at any time after December 31, 2003, buy
Units for prices determined either by an independent petroleum
engineering firm or the General Partner pursuant to a formula
described under "TERMS OF THE OFFERING -- Right of Presentment."  This
obligation of the General Partner to purchase Units when requested is
limited and does not assure the liquidity of a Limited Partner's
investment, and the price received may be less than if the Limited
Partner continued to hold his or her Units.  In addition, similar
commitments have been made and may hereafter be made to investors in
other oil and gas drilling, income and employee programs sponsored by
the General Partner or UNIT.  There can be no assurance that the
General Partner will have the financial resources to honor its
repurchase commitments.  See "TERMS OF THE OFFERING -- Right of
Presentment."

Delay of Cash Distributions

     For income tax purposes, a Limited Partner must report his or her
distributive (allocated) share of the income, gains, losses and
deductions of the Partnership whether or not cash distributions are
made.  No cash distributions are expected to be made earlier than the
first quarter of 2003.  In addition, to the extent that the
Partnership uses its revenues to repay borrowings or to finance its
activities (see "ADDITIONAL FINANCING"), the funds available for cash
distributions by the Partnership will be reduced or may be
unavailable.  It is possible that the amount of tax payable by a
Limited Partner on his or her distributive share of the income of a
the Partnership will exceed his or her cash distributions from the
Partnership.  See "FEDERAL INCOME TAX CONSIDERATIONS."

                                     9

<PAGE>
     If and the date any distributions commence and their subsequent timing or
amount cannot be accurately predicted.  The decision as to whether or not the
Partnership will make a cash distribution at any particular time will be made
solely by the General Partner.

Limitations on Voting and Other Rights of Limited Partners

     The Agreement, as permitted under the Oklahoma Revised Uniform Limited
Partnership Act (the "Act"), eliminates or limits the rights of the Limited
Partners to take certain actions, such as:

     .    withdrawing from the Partnership,

     .    transferring Units without restrictions, or

     .    consenting to or voting upon certain matters such as:

          (i)    admitting a new General Partner,

          (ii)   admitting Substituted Limited Partners, and

          (iii)  dissolving the Partnership.

Furthermore, the Agreement imposes restrictions on the exercise of voting rights
granted to Limited Partners.  See "SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT
-- Voting Rights."  Without the provisions to the contrary which are contained
in the Agreement, the Act provides that certain actions can be taken only with
the consent of all Limited Partners.  Those provisions of the Agreement which
provide for or require the vote of the Limited Partners, generally permit the
approval of a proposal by the vote of Limited Partners holding a majority of the
outstanding Units.  See "SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT -- Voting
Rights."  Thus, Limited Partners who do not agree with or do not wish to be
subject to the proposed action may nevertheless become subject to the action if
the required majority approval is obtained.  Notwithstanding the rights
granted to Limited Partners under the Agreement and the Act, the General Partner
retains substantial discretion as to the operation of the Partnership.

Rollup or Consolidation of Partnership

     Under the terms of the Agreement, at any time two years or more after the
Partnership has completed substantially all of its property acquisition,
drilling and development operations, the General Partner is authorized to cause
the Partnership to transfer its assets to, or to merge or consolidate with,
another partnership or a corporation or other entity for the purpose of
combining the oil and gas properties and other assets of the Partnership with
those of other partnerships formed for investment or participation by the
employees, directors and/or consultants of UNIT or any of its subsidiaries.
Such transfer or combination may be effected without the vote, approval or
consent of the Limited Partners.  In such event, the Limited Partners will
receive interests in the transferee or resulting entity which will mean that
they will most likely participate in the results of a larger number of
properties but will have proportionately smaller allocable interests therein.
Any such transaction is required to be effected in a manner which UNIT and the
General Partner believe is fair and equitable to the Limited Partners but there
can be no assurance that such transaction will in fact be in the best interests
of the Limited Partners.  Limited Partners have no dissenters' or appraisal
rights under the terms of the Agreement or the Act.  Such a transaction would
result in the termination and dissolution of the Partnership.  While

                                     10

<PAGE>
there can be no assurance that the Partnership will participate in such a
transaction, the General Partner currently anticipates that the Partnership
will, at the appropriate time, be involved in such a transaction.  See "TERMS OF
OFFERING", and "SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT."

Partnership Borrowings

     The General Partner has the authority to cause the Partnership to borrow
funds to pay certain costs of the Partnership.  While the use of financing to
preserve the Partnership's equity in oil and gas properties will be intended to
increase the Partnership's profits, such financing could have the effect of
increasing the Partnership's losses if the Partnership is unsuccessful.  In
addition, the Partnership may have to mortgage its oil and gas properties and
other assets in order to obtain additional financing.  If the Partnership
defaults on such indebtedness, the lender may foreclose and the Partnership
could lose its investment in such oil and gas properties and other assets.  See
"ADDITIONAL FINANCING -- Partnership Borrowings."

Limited Liability

     Under the Act a Limited Partner's liability for the obligations of the
Partnership is limited to such Limited Partner's Capital Contribution and such
Limited Partner's share of Partnership assets.  In addition, if a Limited
Partner receives a return of any part of his or her Capital Contribution, such
Limited Partner is generally liable to the Partnership for a period of one year
thereafter (or six years in the event such return is in violation of the
Agreement) for the amount of the returned contribution.  A Limited Partner will
not otherwise be liable for the obligations of the Partnership unless, in
addition to the exercise of his or her rights and powers as a Limited Partner,
such Limited Partner participates in the control of the business of the
Partnership.

     The Agreement provides that by a vote of a majority in interest, the
Limited Partners may effect certain changes in the Partnership such as
termination and dissolution of the Partnership and amendment of the Agreement.
The exercise of any of these and certain other rights is conditioned upon
receipt of an opinion by Conner & Winters for the Limited Partners or an order
or judgment of a court of competent jurisdiction to the effect that the exercise
of such rights will not result in the loss of the limited liability of the
Limited Partners or cause the Partnership to be classified as an association
taxable as a corporation (see "SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT --
Amendments" and "SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT -- Termination").
As a result of certain judicial opinions it is not clear that these rights will
ever be available to the Limited Partners.  Nevertheless, in spite of the
receipt of any such opinion or judicial order, it is still possible that the
exercise of any such rights by the Limited Partners may result in the loss of
the Limited Partners' limited liability.  The Partnership will be governed
by the Act.  The Act expressly permits limited partners to vote on certain
specified partnership matters without being deemed to be participating in the
control of the Partnership's business and, thus, should result in greater
certainty and more easily obtainable opinions of Conner & Winters regarding the
exercise of most of the Limited Partners' rights.

     If the Partnership is dissolved and its business is not to be continued,
the Partnership will be wound up.  In connection with the winding up of the
Partnership, all of its properties may be sold and the proceeds thereof credited
to the accounts of the Partners.  Properties not sold will, upon termination of
the Partnership, be distributed to the Partners.  The distribution of
Partnership Properties to the Limited Partners would result in their having
unlimited liability with respect to such properties.  See "SUMMARY OF THE
LIMITED PARTNERSHIP AGREEMENT -- Limited Liability."

                                     11

<PAGE>
Partnership Acting as Co-General Partner

     It is currently anticipated that the Partnership will serve as a co-general
partner in any drilling or income programs formed by the General Partner or UNIT
during 2002.  See "PROPOSED ACTIVITIES." Accordingly, the Partnership generally
will be liable for the obligation and recourse liabilities of any such drilling
or income program formed.  While a Limited Partner's liability for such claims
will be limited to such Limited Partners Capital Contribution and share of
Partnership assets, such claims if satisfied from the Partnership's assets could
adversely affect the operations of the Partnership.

Past-Due Installments; Acceleration; Additional Assessments

     Installments and Additional Assessments (see "ADDITIONAL FINANCING") are
legally binding obligations and past-due amounts will bear interest at the rate
set forth in the Agreement; provided, however, that if the General Partner
determines that the total Aggregate Subscription is not required to fund the
Partnership's business and operations, then the General Partner may, at its sole
option, elect to release the Limited Partners from their obligation to pay one
or more Installments and amend any relevant Partnership documents accordingly.
It is currently anticipated that the total Aggregate Subscription will be
required to fund the Partnership's business and operations.  In the event an
Installment is not paid when due and the General Partner has not released the
Limited Partners from their obligation to pay such Installment, then the General
Partner may, at its sole option, purchase all Units of the director or employee
who fails to pay such Installment, at a price equal to the amount of the prior
Installments paid by such person.  The General Partner may also bring legal
proceedings to collect any unpaid Installments not waived by it or Additional
Assessments.  In addition, as indicated under "TERMS OF THE OFFERING -- Payment
for Units; Delinquent Installment," if an employee's employment with or position
as a director of the General Partner, UNIT  or any affiliate thereof is
terminated other than by reason of Normal Retirement (see "GLOSSARY"), death or
disability prior to the time the full amount of the subscription price for his
or her Units has been paid, all unpaid Installments not waived by the General
Partner as described above will become due and payable upon such termination.

Partnership Funds

     Except for Capital Contributions, Partnership funds are expected to be
commingled with funds of the General Partner or UNIT.  Thus, Partnership funds
could become subject to the claims of creditors of the General Partner or UNIT.
The General Partner believes that its assets and net worth are such that the
risk of loss to the Partnership by virtue of such fact is minimal but there can
be no assurance that the Partnership will not suffer losses of its funds to
creditors of the General Partner or UNIT.

Compliance With Federal and State Securities Laws

     This offering has not been registered under the Securities Act of 1933, as
amended, in reliance upon exemptive provisions of said act.  Further, these
interests are being sold pursuant to exemptions from registration in the various
states in which they are being offered and may be subject to additional
restrictions in such jurisdictions on transfer.  There is no assurance that the
offering presently qualifies or will continue to qualify under such exemptive
provisions due to, among other things, the adequacy of disclosure and the manner
of distribution of the offering, the existence of similar offerings conducted by
the General Partner or UNIT or its affiliates in the past or in the future, a
failure or delay in providing

                                     12

<PAGE>
notices or other required filings, the conduct of other oil and gas activities
by the General Partner or UNIT and its affiliates or the change of any
securities laws or regulations.

     If and to the extent suits for rescission are brought and successfully
concluded for failure to register this offering or other offerings under the
Securities Act of 1933, as amended, or state securities acts, or for acts or
omissions constituting certain prohibited practices under any of said acts, both
the capital and assets of the General Partner and the Partnership could be
adversely affected, thus jeopardizing the ability of the Partnership to operate
successfully.  Further, the time and capital of the General Partner could be
expended in defending an action by investors or by state or federal authorities
even where the Partnership and the General Partner are ultimately exonerated.

Title To Properties

     The Partnership Agreement empowers the General Partner, UNIT or any of
their affiliates, to hold title to the Partnership Properties for the benefit of
the Partnership.  As such it is possible that the Partnership Properties could
be subject to the claims of creditors of the General Partner.  The General
Partner is of the opinion that the likelihood of the occurrence of such claims
is remote.  However, the Partnership Property could be subject to claims and
litigation in the event that the General Partner failed to pay its debts or
became subject to the claims of creditors.

Use of Partnership Funds to Exculpate and Indemnify the General Partner

     The Agreement contains certain provisions which are intended to limit the
liability of the General Partner and its affiliates for certain acts or
omissions within the scope of the authority conferred upon them by the
Agreement.  In addition, under the Agreement, the General Partner will be
indemnified by the Partnership against losses, judgments, liabilities, expenses
and amounts paid in settlement sustained by it in connection with the
Partnership so long as the losses, judgments, liabilities, expenses or amounts
were not the result of gross negligence or willful misconduct on the part of the
General Partner.  See "SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT --
Exculpation and Indemnification of the General Partner."

The Partnership Agreement May Limit the Fiduciary Obligation of the General
Partner to the Partnership and the Limited Partners

     The Agreement contains certain provisions which modify what would otherwise
be the applicable Oklahoma law relating to the fiduciary standards of the
General Partner to the Limited Partners.  The fiduciary standards in the
Agreement could be less advantageous to the Limited Partners and more
advantageous to the General Partner than the corresponding fiduciary standards
otherwise applicable under Oklahoma law (although there are very few legal
precedents clarifying exactly what fiduciary standards would otherwise be
applicable under Oklahoma law).  The purchase of Units may be deemed as consent
to the fiduciary standards set forth in the Agreement.  See "FIDUCIARY
RESPONSIBILITY." As a result of these provisions in the Agreement, the Limited
Partners may find it more difficult to hold the General Partner responsible for
acting in the best interest of the Partnership and the Limited Partners than if
the fiduciary standards of the otherwise applicable Oklahoma law governed the
situation.

                                     13

<PAGE>
TAX STATUS AND TAX RISKS

     It is possible that the tax treatment currently available with respect to
oil and gas exploration and production will be modified or eliminated on a
retroactive or prospective basis by legislative, judicial, or administrative
actions.  The limited tax benefits associated with oil and gas exploration do
not eliminate the inherent attendant economic risks.  See "Federal Income Tax
Considerations."

Partnership Classification

     Conner & Winters has rendered its opinion that the Partnership will be
classified for federal income tax purposes as a partnership and not as a
corporation, an association taxable as a corporation or as a "publicly traded
partnership."  Such opinion is not binding on the Service or the courts.  If the
Partnership were classified as a corporation, association taxable as a
corporation or publicly traded partnership, any income, gain, loss, deduction,
or credit of the Partnership would remain at the entity level, and not flow
through to the Partners, the income of the Partnership would be subject to
corporate tax rates at the entity level and distributions to the Partners could
be considered dividend distributions.  See "Federal Income Tax Considerations--
General Tax Effects of Partnership Structure."

Limited Partner Interests

     An investment as a Limited Partner may not be advisable for a person who
does not anticipate having substantial current taxable income from passive trade
or business activities (not counting dividend or interest income).  Such a
person cannot utilize any passive losses generated by the Partnership until and
unless he or she has realized "passive income".  Partnership income, losses,
gains, and deductions allocable to most Limited Partners will
be subject to the "passive activity" rules.

Tax Liabilities in Excess of Cash Distributions

     Federal income tax payable by a Partner by reason of his or her
distributive share of Partnership taxable income for any year may exceed the
cash distributed to such Partner by the Partnership.  A Partner must include in
his or her own income tax return for a taxable year his or her share of the
items of the Partnership's income, gain, profit, loss, and deductions for the
year, to the extent required under the Code as then in effect, whether or not
cash proceeds are actually distributed to the Partner.  For example, income from
the Partnership's sale of gas production will be taxable to Partners as
ordinary income subject to depletion and other deductions whether or not the
proceeds from such sale are actually distributed (for example, where Partnership
income is used to repay Partnership indebtedness).

Items Not Covered by the Tax Opinion

     Due to the lack of authority regarding, or the essentially factual nature
of certain issues, Conner & Winters has expressed no opinion as to the
following: (i) the impact of an investment in the Partnership on an investor's
alternative minimum tax liability; (ii) whether, under Code Section 183, the
losses of the Partnership will be treated as derived from "activities not
engaged in for profit," and therefore nondeductible from other gross income (due
to the inherently factual nature of a Partner's interest and motive in investing
in the Partnership); (iii) whether any of the Partnership's properties will be
considered "proven" for purposes of depletion deductions; (iv) whether any
interest incurred by a Partner with respect to any borrowings incurred to
purchase Units will be deductible or subject to limitations on deductibility;
and (v) whether the Partnership will be treated as the tax owner of Partnership
Properties acquired by the General Partner as nominee for the Partnership.

                                     14

<PAGE>
     The determination of various of the above-referenced issues is dependent on
facts not currently available.  Therefore, Conner & Winters is unable to render
an opinion at this time with respect to such issues.  Also, the unknown facts
with respect to the various issues referred to above will vary from Partner to
Partner and will result in different tax consequences and burdens for individual
Partners.

     Prospective investors should recognize that an opinion of Conner & Winters
merely represents Conner & Winter's best legal judgment under existing statutes,
judicial decisions, and administrative regulations and interpretations.  There
can be no assurance that some of the deductions claimed by the Partnership in
reliance upon an opinion of Conner & Winters will not be challenged successfully
by the Service.

OPERATIONAL RISKS

Risks Inherent in Oil and Gas Operations

     The Partnership will be participating with the General Partner in acquiring
producing oil and gas leases and in the drilling of those oil and gas wells
commenced by the General Partner from the later of January 1, 2002 or the time
the Partnership is formed through December 31, 2002 and, with certain limited
exceptions, serving as a co-general partner of any oil and gas drilling or
income programs, or both, formed by the General Partner or UNIT during 2002.

     All drilling to establish productive oil and natural gas properties is
inherently speculative.  The techniques presently available to identify the
existence and location of pools of oil and natural gas are indirect, and,
therefore, a considerable amount of personal judgment is involved in the
selection of any prospect for drilling.  The economics of oil and natural gas
drilling and production are affected or may be affected in the future by a
number of factors which are beyond the control of the General Partner,
including (i) the general demand in the economy for energy fuels, (ii) the
worldwide supply of oil and natural gas, (iii) the price of, as well as
governmental policies with respect to, oil imports, (iv) potential competition
from competing alternative fuels, (v) governmental regulation of prices for oil
and natural gas production, gathering and transportation, (vi) state regulations
affecting allowable rates of production, well spacing and other factors, and
(vii) availability of drilling rigs, casing and other necessary goods and
services.  See "COMPETITION, MARKETS AND REGULATION."  The revenues, if any,
generated from Partnership operations will be highly dependent upon the future
prices and demand for oil and natural gas.  The factors enumerated above affect,
and will continue to affect, oil and natural gas prices.  Recently, prices for
oil and natural gas have fluctuated over a wide range.

Operating and Environmental Hazards

     Operating hazards such as fires, explosions, blowouts, unusual formations,
formations with abnormal pressures and other unforeseen conditions are sometimes
encountered in drilling wells.  On occasion, substantial liabilities to third
parties or governmental entities may be incurred, the payment of which could
reduce the funds available for exploration and development or result in loss of
Partnership Properties.  The Partnership will attempt to maintain customary
insurance coverage, but the Partnership may be subject to liability for
pollution and other damages or may lose substantial portions of its properties
due to hazards against which it cannot insure or against which it may elect not
to insure due to unreasonably high or prohibitive premium costs or for other
reasons.  The activities of the Partnership may expose it to potential liability
for pollution or other damages under laws and regulations relating to
environmental matters (see "Government Regulation and Environmental Risks"
below).

                                     15

<PAGE>
Competition

     The oil and gas industry is highly competitive.  The Partnership will be
involved in intense competition for the acquisition of quality undeveloped
leases and producing oil and gas properties.  There can be no assurance that a
sufficient number of suitable oil and gas properties will be available for
acquisition or development by the Partnership.  The Partnership will be
competing with numerous major and independent companies which possess financial
resources and staffs larger than those available to it.  The Partnership,
therefore, may be unable in certain instances to acquire desirable leases or
supplies or may encounter delays in commencing or completing Partnership
operations.

Markets for Oil and Natural Gas Production

     Historically (prior to the early 1980s), world oil prices were established
and maintained largely as a result of the actions of members of OPEC to limit,
and maintain a base price for, their oil production.  Until recently, however,
members of OPEC were unable to agree to and maintain price and production
controls, which resulted in significant downward pressure on oil prices.
Commencing in early 2001, OPEC members were able to reach agreement on oil
production levels which has contributed to the recent rise in oil prices.
Although future levels of production by the members of OPEC or the degree to
which oil prices will be affected thereby cannot be predicted, it is possible
that prices for oil produced in the future will be higher or lower than those
currently available.  There can be no assurance that the oil that the
Partnership produces can be marketed on favorable price and other contractual
terms.  See "COMPETITION, MARKETS AND REGULATION -- Marketing of Production."

     The natural gas market is also currently unsettled due to a number of
factors.  In the past, production from natural gas wells in some geographic
areas of the United States has been curtailed for considerable periods of time
due to a lack of market demand.  Over the past several years demand for natural
gas has increased greatly limiting the number of wells being shut in for lack of
demand.  It is possible, however, that Partnership Wells may in the future be
shut-in or that natural gas will be sold on terms less favorable than might
otherwise be obtained should demand for gas lessen in the future.  Competition
for available markets has been vigorous and there remains great uncertainty
about prices that purchasers will pay.  In recent years, significant court
decisions and regulatory changes have affected the natural gas markets.  As a
result of such court decisions, regulatory changes and unsettled market
conditions, natural gas regulations may be modified in the future and may be
subject to further judicial review or invalidation.  The combination of these
factors, among others, makes it particularly difficult to estimate accurately
future prices of natural gas, and any assumptions concerning future prices may
prove incorrect.  Natural gas surpluses could result in the Partnership's
inability to market natural gas profitably, causing Partnership Wells to curtail
production and/or receive lower prices for its natural gas, situations which
would adversely affect the Partnership's ability to make cash distributions
to its participants.  See "COMPETITION, MARKETS AND REGULATION."

     In the event that the Partnership discovers or acquires natural gas
reserves, there may be delays in commencing or continuing production due to the
need for gathering and pipeline facilities, contract negotiation with the
available market, pipeline capacities, seasonal takes by the gas purchaser or a
surplus of available gas reserves in a particular area.

                                     16

<PAGE>
Government Regulation and Environmental Risks

     The oil and gas business is subject to pervasive government regulation
under which, among other things, rates of production from producing properties
may be fixed and the prices for gas produced from such producing properties may
be impacted.  It is possible that these regulations pertaining to rates of
production could become more pervasive and stringent in the future.  The
activities of the Partnership may expose it to potential liability under laws
and regulations relating to environmental matters which could adversely
affect the Partnership.  Compliance with these laws and regulations may increase
Partnership costs, delay or prevent the drilling of wells, delay or prevent the
acquisition of otherwise desirable producing oil and gas properties, require the
Partnership to cease operations in certain areas, and cause delays in the
production of oil and gas.  See "COMPETITION, MARKETING AND REGULATION."

Leasehold Defects

     In certain instances, the Partnership may not be able to obtain a title
opinion or report with respect to a producing property that is acquired.
Consequently, the Partnership's title to any such property may be uncertain.
Furthermore, even if certain technical defects do appear in title opinions or
reports with respect to a particular property, the General Partner, in its sole
discretion, may determine that it is in the best interest of the Partnership to
acquire such property without taking any curative action.

                             TERMS OF THE OFFERING

General

     .    600 Maximum Units; 50 Minimum Units

     .    $1,000 Units; Minimum subscription: $2,000

     .    Minimum Partnership: $50,000 in subscriptions

     .    Maximum Partnership: $600,000 in subscriptions

Limited Partnership Interests

     The Partnership hereby offers to certain employees (described under
"Subscription Rights" below) and directors of UNIT and its subsidiaries an
aggregate of 600 Units.  The purchase price of each Unit is $1,000, and the
minimum permissible purchase by any eligible subscriber is two Units ($2,000).
See "Subscription Rights" below for the maximum number of Units that may be
acquired by subscribers.

     The Partnership will be formed as an Oklahoma limited partnership upon the
closing of the offering of Units made by this Memorandum.  The General Partner
will be Unit Petroleum Company (the "General Partner", or "UPC"), an Oklahoma
corporation.  Partnership operations will be conducted from the General
Partner's offices, the address of which is 1000 Kensington Tower I, 7130 South
Lewis Avenue, Tulsa, Oklahoma 74136, telephone (918) 493-7700.

     The offering of Units will be closed on  January 25, 2002 unless extended
by the General Partner for up to 30 days, and all Units subscribed will be
issued on the Effective Date.  The offering may be

                                     17

<PAGE>
withdrawn by the General Partner at any time prior to such date if it believes
it to be in the best interests of the eligible employees and Directors or the
General Partner not to proceed with the offering.

     If at least 50 Units ($50,000) are not subscribed prior to the termination
of the offering, the Partnership will not commence business.  The General
Partner may, on its own accord, purchase Units and, in such capacity, will enjoy
the same rights and obligations as other Limited Partners, except the General
Partner will have unlimited liability.  The General Partner may, in its
discretion, purchase Units sufficient to reach the minimum Aggregate
Subscription ($50,000).  Because the General Partner or its affiliates might
benefit from the successful completion of this offering (see "PARTICIPATION IN
COSTS, AND REVENUES" and "COMPENSATION"), investors should not expect that
sales of the minimum Aggregate Subscription indicate that such sales have been
made to investors that have no financial or other interest in the offering or
that have otherwise exercised independent investment discretion.  Further, the
sale of the minimum Aggregate Subscription is not designed as a protection to
investors to indicate that their interest is shared by other unaffiliated
investors and no investor should place any reliance on the sale of the minimum
Aggregate Subscription as an indication of the merits of this offering.  Units
acquired by the General Partner will be for investment purposes only without a
present intent for resale and there is no limit on the number of Units that may
be acquired by it.

Subscription Rights

     Units are offered only to persons who are salaried employees of UNIT or its
subsidiaries at the date of formation of the Partnership and who are exempt
under the Fair Labor Standards Act and whose annual base salaries for 2001
(excluding bonuses) have been set at $22,680 or more and to Directors of UNIT.
Only employees and Directors who are U.S. citizens are eligible to participate
in the offering.  In addition, employees and Directors must be able to bear the
economic risks of an investment in the Partnership and must have sufficient
investment experience and expertise to evaluate the risks and merits of such an
investment.  See "PLAN OF DISTRIBUTION -- Suitability of Investors."

     Eligible employees and Directors are restricted as to the number of Units
they may purchase in the offering.  The maximum number of Units which can be
acquired by any employee is that number of whole Units which can be purchased
with an amount which does not exceed one-half of the employee's base salary for
2002.  Each Director of UNIT may subscribe for a maximum of 200 Units (maximum
investment of $200,000).  At December 12, 2001 there were approximately 232
Directors and employees eligible to purchase Units.

     Eligible employees and Directors may acquire Units through a corporation or
other entity in which all of the beneficial interests are owned by them or
permitted assignees (see "SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT --
Transferability of Interests"); provided that such employees or Directors will
be jointly and severally liable with such entity for payment of the Capital
Subscription.

     If all eligible employees and Directors subscribed for the maximum number
of Units, the Units would be oversubscribed.  In that event, Units would be
allocated among the respective subscribers in the proportion that each
subscription amount bears to total subscriptions obtained.

     No employee is obligated to purchase Units in order to remain in the employ
of UNIT, and the purchase of Units by any employee will not obligate UNIT to
continue the employment of such employee.  Units may be subscribed for by the
spouse or a trust for the minor children of eligible employees and Directors.

                                     18

<PAGE>
Payment for Units; Delinquent Installment

     The Capital Subscriptions of the Limited Partners will be payable either
(i) in four equal Installments, the first of such Installments being due on
March 15, 2002 and the remaining three of such Installments being due on June
15, 2002, September 15, 2002 and December 15, 2002, respectively, or (ii) by
employees so electing in the space provided on the Subscription Agreement,
through equal deductions from 2002 salary paid to the employee by the General
Partner, UNIT or its subsidiaries commencing immediately after formation of the
Partnership.  If an employee or Director who has subscribed for Units (either
directly or through a corporation or other entity) ceases to be employed by or
serve as a Director of the General Partner, UNIT or any of its subsidiaries for
any reason other than death, disability or Normal Retirement prior to the time
the full amount of all Installments not waived by the General Partner as
described below are due, then the due date for any such unpaid Installments
shall be accelerated so that the full amount of his or her unpaid Capital
Subscription will be due and payable on the effective date of such termination.

     Each Installment will be a legally binding obligation of the Limited
Partner and any past due amounts will bear interest at an annual rate equal to
two percentage points in excess of the prime rate of interest of Bank of
Oklahoma, N.A., Tulsa, Oklahoma; provided, however, that if the General Partner
determines that the total Aggregate Subscription is not required to fund the
Partnership's business and operations, then the General Partner may, at its sole
option, elect to release the Limited Partners from their obligation to pay one
or more Installments.  If the General Partner elects to waive the payment of an
Installment, it will notify all Limited Partners promptly in writing of its
decision and will, to the extent required, amend the certificate of limited
partnership and any other relevant Partnership documents accordingly.  It is
currently anticipated that the total Aggregate Subscription will be required,
however, to fund the Partnership's business and operations.

     In the event a Limited Partner fails to pay any Installment when due and
the General Partner has not released the Limited Partners from their obligation
to pay such Installment, then the General Partner, at its sole option and
discretion, may elect to purchase the Units of such defaulting Limited Partner
at a price equal to the total amount of the Capital Contributions actually paid
into the Partnership by such defaulting Limited Partner, less the amount of any
Partnership distributions that may have been received by him or her.  Such
option may be exercised by the General Partner by written notice to the
Limited Partner at any time after the date that the unpaid Installment was due
and will be deemed exercised when the amount of the purchase price is first
tendered to the defaulting Limited Partner.  The General Partner may, in its
discretion, accept payments of delinquent Installments not waived by it but will
not be required to do so.

     In the event that the General Partner elects to purchase the Units of a
defaulting Limited Partner, it must pay into the Partnership the amount of the
delinquent Installment (excluding any interest that may have accrued thereon)
and pay each additional Installment, if any, payable with respect to such Units
as it becomes due.  By virtue of such purchase, the General Partner will be
allocated all Partnership Revenues, be charged with all Partnership costs and
expenses attributable to such Units and will enjoy the same rights and
obligations as other Limited Partners, except the General Partner will have
unlimited liability.

                                     19

<PAGE>
Right of Presentment

     After December 31, 2003, and annually thereafter, Limited Partners will
have the right to present their Units to the General Partner for purchase.  The
General Partner will not be obligated to purchase more than 20% of the then
outstanding Units in any one calendar year.  The purchase price to be paid for
the Units of any Limited Partner presenting them for purchase will be based on
the net asset value of the Partnership which shall be equal to:

     (1)  The value of the proved reserves attributable to the Partnership
          Properties, determined as set forth below; plus

     (2)  The estimated salvage value of tangible equipment installed on
          Partnership Wells less the costs of plugging and abandoning the wells,
          both discounted at the rate utilized to determine the value of the
          Partnership's reserves as set forth below; plus

     (3)  The lower of cost or fair market value of all Partnership Properties
          to which proved reserves have not been attributed but which have not
          been condemned, as determined by an independent petroleum engineering
          firm or the General Partner, as the case may be; plus

     (4)  Cash on hand; plus

     (5)  Prepaid expenses and accounts receivable (less a reasonable reserve
          for doubtful accounts); plus

     (6)  The estimated market value of all other Partnership assets not
          included in (1) through (5) above, determined by the General Partner;
          MINUS

     (7)  An amount equal to all debts, obligations and other liabilities of the
          Partnership.

The price to be paid for each Limited Partner's interest of the net asset value
will be his or her proportionate share of such net asset value less 75% of the
amount of any distributions received by him or her which are attributable to the
sales of the Partnership production since the date as of which the Partnership's
proved reserves are estimated.

     The value of the proved reserves attributable to Partnership Properties
will be determined as follows:

     (i)   First, the future net revenues from the production and sale of the
           proved reserves will be estimated as of the end of the calendar year
           in which presentment is made based on an independent engineering
           firm's report and its determinations of the prices to be used as well
           as the escalations, if any, of such prices and cost or, if no report
           was made, as determined by the General Partner;

     (ii)  Next, the future net revenues from the production and sale of proved
           reserves as determined above will be discounted at an annual rate
           which is one percentage point higher than the prime rate of interest
           being charged by the Bank of Oklahoma, N.A., Tulsa, Oklahoma, or any
           successor bank, as of the date such reserves are estimated; and

                                     20

<PAGE>
     (iii) Finally, the total discounted value of the future net revenues from
           the production and sale of proved reserves will be reduced by an
           additional 25% to take into account the risks and uncertainties
           associated with the production and sale of the reserves and other
           unforeseen uncertainties.

     A Limited Partner who elects to have his or her Units purchased by the
General Partner should be aware that estimates of future net recoverable
reserves of oil and gas and estimates of future net revenues to be received
therefrom are based on a great many factors, some of which, particularly future
prices of production, are usually variable and uncertain and are always
determined by predictions of future events.  Accordingly, it is common for the
actual production and revenues received to vary from earlier estimates.
Estimates made in the first few years of production from a property will be
based on relatively little production history and will not be as reliable as
later estimates based on longer production history.  As a result of all the
foregoing, reserve estimates and estimates of future net revenues from
production may vary from year to year.

     This right of presentment may be exercised by written notice from a Limited
Partner to the General Partner.  The sale will be effective as of the close of
business on the last day of the calendar year in which such notice is given or,
at the General Partner's election, at 7:00 A.M. on the following day.  Within
120 days after the end of the calendar year, the General Partner will furnish
each Limited Partner who gave such notice during the calendar year a statement
showing the cash purchase price which would be paid for the Limited Partner's
interest as of December 31 of the preceding year, which statement will include a
summary of estimated reserves and future net revenues and sufficient material to
reveal how the purchase price was determined.  The Limited Partner must, within
30 days after receipt of such statement, reaffirm his or her election to sell to
the General Partner.

     As noted above, the General Partner will not be obligated to purchase in
any one calendar year more than 20% of the Units in the Partnership then
outstanding.  Moreover, the General Partner will not be obligated to purchase
any Units pursuant to such right if such purchase, when added to the total of
all other sales, exchanges, transfers or assignments of Units within the
preceding 12 months, would result in the Partnership being considered to have
terminated within the meaning of Section 708 of the Code or would cause the
Partnership to lose its status as a partnership for federal income tax purposes.
If more than the number of Units which may be purchased are tendered in any one
year, the Limited Partners from whom the Units are to be purchased will be
determined by lot.  Any Units presented but not purchased with respect to one
year will have priority for such purchase the following year.

     The General Partner does not intend to establish a cash reserve to fund its
obligation to purchase Units, but will use funds provided by its operations or
borrowed funds (if available), using its assets (including such Units purchased
or to be purchased from Limited Partners) as collateral to fund such
obligations.  However, there is no assurance that the General Partner will have
sufficient financial resources to discharge its obligations.

Rollup or Consolidation of Partnership

     The Agreement provides that two years or more after the Partnership has
completed substantially all of its property acquisition, drilling and
development operations, the General Partner may, without the vote, consent or
approval of the Limited Partners, cause all or substantially all of the oil and
gas properties and other assets of the Partnership to be sold, assigned or
transferred to, or the Partnership merged or consolidated with, another
partnership or a corporation, trust or other entity for the purpose of combining
the assets of two or more of the oil and gas partnerships formed for
investment or

                                     21

<PAGE>
participation by employees, directors and/or consultants of UNIT or any of its
subsidiaries; provided, however, that the valuation of the oil and gas
properties and other assets of all such participating partnerships for purposes
of such transfer or combination shall be made on a consistent basis and in a
manner which the General Partner and UNIT believe is fair and equitable to the
Limited Partners.  As a consequence of any such transfer or combination, the
Partnership shall be dissolved and terminated and the Limited Partners shall
receive partnership interests, stock or other equity interests in the transferee
or resulting entity.  Any such action will cause the Limited Partners'
attributable interest in the Partnership Properties to be diluted but it will
also provide them with attributable interests in the properties and other assets
of the other partnerships participating in the consolidation.  It also may
reduce somewhat the amount of their attributable shares of the direct and
indirect costs of administering the Partnership.  See "RISK FACTORS --Investment
Risks - Roll-Up or Consolidation of Partnership."

                              ADDITIONAL FINANCING

     The General Partner will use its best efforts, consistent with Partnership
objectives, to acquire Productive properties and complete the Partnership's
drilling and development operations before the Aggregate Subscription has been
fully expended or committed.  However, funds in addition to the Aggregate
Subscription may be required to pay costs and expenses which are chargeable to
the Limited Partners.  In those instances described below, the General Partner
may call for Additional Assessments or may apply Partnership Revenue allocable
to the Limited Partners in payment and satisfaction of such costs or the
General Partner may, but shall not be required to, fund the deficiency with
Partnership borrowings to be repaid with Partnership Revenue.

Additional Assessments

     When the Aggregate Subscription has been fully expended or committed, the
General Partner may make one or more calls for any portion or all of the maximum
Additional Assessments of $100 per Unit.  However, no Additional Assessments may
be required before the General Partner's Minimum Capital Contribution has been
fully expended.  Such assessments may be used to pay the Limited Partners' share
of the Drilling Costs, Special Production and Marketing Costs or Leasehold
Acquisition Costs of Productive properties which are chargeable to the Limited
Partners.  The amount of the Additional Assessment so called shall be due and
payable on or before such date as the General Partner may set in such call,
which in no event will be earlier than thirty (30) days after the date of
mailing of the call.  The notice of the call for Additional Assessments will
specify the amount of the assessment being required, the intended use of such
funds, the date on which the contributions are payable and describe the
consequences of nonpayment.  Although the Limited Partners who do not respond
will participate in production, if any, obtained from operations conducted
with the proceeds from the aggregate Additional Assessments paid into the
Partnership, the amount of the unpaid Additional Assessment shall bear interest
at the annual rate equal to two (2) percentage points in excess of the prime
rate of interest of Bank of Oklahoma, N.A., Tulsa, Oklahoma, or successor bank,
as announced and in effect from time to time, until paid.  The Partnership will
have a lien on the defaulting Limited Partner's interest in the Partnership and
the General Partner may retain Partnership Revenue otherwise available for
distribution to the defaulting Limited Partner until an amount equal to the
unpaid Additional Assessment and interest is received.  Furthermore, the
General Partner may satisfy such lien by proceeding with legal action to enforce
the lien and the defaulting Limited Partner shall pay all expenses of
collection, including interest, court costs and a reasonable attorney's fee.

                                     22

<PAGE>
Prior Programs

     In the prior employee programs conducted by UNIT or the General Partner in
each of the years 1984 through 2001, Additional Assessments could be called for
as provided herein. At September 30, 2001, there had been no calls for
Additional Assessments in such programs.  There can be no assurance, however,
that Additional Assessments will not be required to pay Partnership costs.

Partnership Borrowings

     At any time after the General Partner's Minimum Capital Contribution has
been fully expended, the General Partner may cause the Partnership to borrow
funds for the purpose of paying Drilling Costs, Special Production and Marketing
Costs or Leasehold Acquisition Costs of Productive properties, which borrowings
may be secured by interests in the Partnership Properties and will be repaid,
including interest accruing thereon, out of Partnership Revenue.  The General
Partner may, but is not required to, advance funds to the Partnership for the
same purposes for which Partnership borrowings are authorized.  With respect to
any such advances, the General Partner will receive interest in an amount equal
to the lesser of the interest which would be charged to the Partnership by
unrelated banks on comparable loans for the same purpose or the General
Partner's interest cost with respect to such loan, where it borrows the same.
No financing charges will be levied by the General Partner in connection with
any such loan.  If Partnership borrowings secured by interests in the
Partnership Wells and repayable out of Partnership Revenue cannot be arranged on
a basis which, in the opinion of the General Partner, is fair and reasonable,
and the entire sum required to pay such costs is not available from Partnership
Revenue, the General Partner may dispose of some or all of the Partnership
Properties upon which such operations were to be conducted by sale, farm-out or
abandonment.

     If the Partnership requires funds to conduct Partnership operations during
the period between any of the Installments due from the Limited Partners, then,
notwithstanding the foregoing, the General Partner shall advance funds to the
Partnership in an amount equal to the funds then required to conduct such
operations but in no event more than the total amount of the Aggregate
Subscription remaining unpaid.  With respect to any such advances, the General
Partner shall receive no interest thereon and no financing charges will be
levied by the General Partner in connection therewith.  The General Partner
shall be repaid out of the Installments thereafter paid into the capital of the
Partnership when due.

     The Partnership may attempt to finance any expenses in excess of the
Partners' Capital Subscriptions by the foregoing means and any other means which
the General Partner deems in the best interests of the Partnership, but the
Partnership's inability to meet such costs could result in the deferral of
drilling operations or in the inability to participate in future drilling or in
non-consent penalties pursuant to which co-owners of particular working
interests recover several times the amount which would have been funded by the
Partnership in accordance with its ownership interest before the Partnership
would participate in revenues.

     The use of Partnership Revenue allocable to the Limited Partners to pay
Partnership costs and expenses and to repay any Partnership borrowings will mean
that such revenue will not be available for distribution to the Limited
Partners.  Nonetheless, the Limited Partners may incur income tax liability by
virtue of that revenue and, thus, may not receive distributions from the
Partnership in amounts necessary to pay such income tax.  However, the use of
such revenue to pay Partnership costs and expenses may generate additional
deductions for the Limited Partners.

                                     23

<PAGE>
                            PLAN OF DISTRIBUTION

     Units will be offered privately only to select persons who can demonstrate
to the General Partner that they have both the economic means and investment
expertise to qualify as suitable investors.  The Units will be offered and sold
by the officers and directors of UPC or UNIT.

Suitability of Investors

     Subscriptions should be made only by appropriate persons who can reasonably
benefit from an investment in the Partnership.  In this regard, a subscription
will generally be accepted only from a person who can represent that such person
has (or in the case of a husband and wife, acting as joint tenants, tenants in
common or tenants in the entirety, that they have) a net worth, including home,
furnishings and automobiles, of at least five times the amount of his or her
Capital Subscription, and estimates that such person will have during the
current year adjusted gross income in an amount which will enable him or her to
bear the economic risks of his or her investment in the Partnership.  Such
person must also demonstrate that he or she has sufficient investment experience
and expertise to evaluate the risks and merits of an investment in the
Partnership.

     Participation in the Partnership is intended only for those persons willing
to assume the risk of a speculative, illiquid, long-term investment.
Entitlement to and maintenance of the exemptions from registration provided by
Sections 3(b) and/or 4(2) of the Securities Act of 1933, as amended, require the
imposition of certain limitations on the persons to whom offers may be made, and
from whom subscriptions may be accepted.  Therefore, this offering is limited to
persons who, by virtue of investment acumen or financial resources, satisfy the
General Partner that they meet suitability standards consistent with the
maintenance and preservation of the exemptions provided by Sections 3(b) and/or
4(2) and by the applicable rules and regulations of the Securities and Exchange
Commission, as well as those contained herein and in the Subscription Agreement.
Persons offering interests shall sufficiently inquire of a prospective
investor to be reasonably assured that such investor meets such acceptable
standards.  Suitability standards may also be imposed by the regulatory
authorities of the various states in which interests may be offered.

                         RELATIONSHIP OF THE PARTNERSHIP,
                        THE GENERAL PARTNER AND AFFILIATES

     The following diagram depicts the primary relationships among the
Partnership, the General Partner and certain of its affiliates.

                                     24

<PAGE>

                              UNIT CORPORATION
                              ----------------
                                     |
                |-----------------------------------------|
                |                                         |
   |--------------------------|              |-------------------------|
   |  Unit Petroleum Company  |              |  Unit Drilling Company  |
   |--------------------------|              |-------------------------|
                |
                |   General Partner
                |   ---------------
                |
   |--------------------------|
   |  Unit 2002 Employee Oil  |
   | & Gas Limited Partnership|
   |--------------------------|
                |
                |   Limited Partners
                |   ----------------
                |
   |--------------------------|
   |    Eligible Employees    |
   |       and Directors      |
   |--------------------------|

                              PROPOSED ACTIVITIES

General

     The Partnership will, with certain limited exceptions, participate in all
of UNIT's or UPC's oil and gas activities commenced during 2002.  The
Partnership will acquire 2 1/2% of essentially all of UNIT's interest in such
activities.  The activities will include (i) participating as a joint working
interest owner with UNIT or UPC in any producing leases acquired and in any
wells commenced by UNIT or UPC other than as a general partner in a drilling or
income program during 2002 and (ii) serving as a co-general partner in any
drilling or income programs, or both, formed by the General Partner or UNIT
during 2002.

     Acquisition of Properties and Drilling Operations.  The Partnership will
participate, to the extent of 2 1/2% of UPC or UNIT's final interest in each
well, as a fractional working interest holder in any producing leases acquired
and in any drilling operations conducted by UPC or UNIT for its own account
which are acquired or commenced, respectively, from January 1, 2002, or the time
of the formation of the Partnership if subsequent to January 1, 2002, until
December 31, 2002, except for wells, if any:

     (i)   drilled outside the 48 contiguous United States;

     (ii)  drilled as part of secondary or tertiary recovery operations
           which were in existence prior to formation of the
           Partnership;

     (iii) drilled by third parties under farm-out or similar arrangements with
           UNIT or the General Partner or whereby UNIT or the General Partner
           may be entitled to an overriding royalty, reversionary or other
           similar interest in the production from such wells but is not
           obligated to pay any of the Drilling Costs thereof;

                                     25

<PAGE>
     (iv)  acquired by UNIT or the General Partner through the acquisition by
           UNIT or the General Partner of, or merger of UNIT or the General
           Partner with, other companies (However, this exception may, at the
           discretion of Unit or the General Partner, be waived); or

     (v)   with respect to which the General Partner does not believe that the
           potential economic return therefrom justifies the costs of
           participation by the Partnership.

Instances referred to in (v) could occur when UNIT or one of its subsidiaries
agrees to participate in the ownership of a prospect for its own account in
order to obtain the contract to drill the well thereon.  There may be situations
where the potential economic return of the well alone would not be sufficient to
warrant participation by UNIT but when considered in light of the revenues
expected to be realized as a result of the drilling contract, such participation
is desirable from UNIT's standpoint.  However, in such a situation, the
Partnership would not be entitled to any of the revenues generated by the
drilling contract so its participation in the well would not be desirable.

     For these purposes, the drilling of a well will be deemed to have commenced
on the "spud date," i.e., the date that the drilling rig is set up and actual
drilling operations are commenced.  Any clearing or other site preparation
operations will not be considered part of the drilling operations for these
purposes.

     Participation in Drilling or Income Programs.  Except for certain limited
exceptions it is anticipated that the Partnership will participate with UPC or
UNIT as a co-general partner of any drilling or income programs, or both, formed
by UPC or UNIT and its affiliates during 2002.  The Partnership will be charged
with 2 1/2% of the total costs and expenses charged to the general partners and
allocated 2 1/2% of the revenues allocable to the general partners in any such
program and UPC or UNIT will be charged with the remaining 97 1/2% of the
general partners' share of costs and expenses and allocated the remaining 97
1/2% of the general partners' share of program revenues.

     UNIT or its affiliates formed drilling programs for outside investors from
1979 through 1984.  In 1987, the Unit 1986 Energy Income Limited Partnership
(the "1986 Energy Program") was formed primarily to acquire interests in
producing oil and gas properties.  See "PRIOR ACTIVITIES".  All of the programs
were formed as limited partnerships and interests in all of the programs other
than the Unit 1979 Oil and Gas Program and the 1986 Energy Program were offered
in registered public offerings.  The 1979 Program and 1986 Energy Program
were offered privately to a limited number of sophisticated investors.

     No drilling or income programs for third party investors were formed in
2001.  Although it does not currently contemplate doing so, UNIT may form such
drilling or income programs during 2002.  If such a program is formed, there
would be only one or two such programs and they probably would be privately
offered.  The precise revenue and cost sharing format of any such programs has
not been determined.

     The cost and revenue sharing provisions of virtually all drilling programs
offered to third parties generally require the limited partners or investors to
bear a somewhat higher percentage of the program's drilling and development
costs than the percentage of program revenues to which they are entitled.
Likewise, the general partners will normally receive a higher percentage of
revenues than the percentage of drilling and development costs which they are
required to pay.  The difference in these percentages is often referred to as
the general partners' "promote".  Any drilling program which UNIT or UPC may
form in 2002 for outside investors would likely have some amount of "promote"
for the general partner(s).

                                     26

<PAGE>
     Any income program may use the same or a similar format as that used for
the 1986 Partnership.  In the 1986 Partnership, virtually all partnership costs
and expenses other than property acquisition costs are allocated to the partners
in the same percentages that partnership revenue is being shared at the time
such expenses are incurred, with property acquisition costs and certain other
expenses being charged 85% to the accounts of the limited partners and 15% to
the accounts of the general partners.  Partnership revenue in the 1986
Partnership is allocated 85% to the limited partners' accounts and 15% to the
general partners' accounts until program payout (as defined in the agreement
of limited partnership for the 1986 Partnership).  After program payout, the
percentages of partnership revenue allocable to the respective accounts of the
partners depend upon the length of the period during which program payout occurs
and range from 60% to the limited partners' accounts and 40% to the general
partners' accounts to 85% to the limited partners' accounts and 15% to the
general partners' accounts.

     As co-general partners of any drilling or income programs that may be
formed by UNIT and/or UPC during 2002 and participated in by the Partnership,
UNIT and/or UPC and the Partnership will share the costs, expenses and revenues
allocable to the general partners on a proportionate basis, 97 1/2% for the
account of UNIT and/or UPC and 2 1/2% for the account of the Partnership.  The
Partnership will not receive any portion of any management fees payable to the
general partners nor any fees or payments for supervisory services which UNIT
or UPC may render to such programs as operator of program wells or other fees
and payments which UNIT or UPC may be entitled to receive from such programs for
services rendered to them or goods, materials, equipment or other property sold
to them.

     Extent and Nature of Operations.  Although the General Partner maintains a
general inventory of prospects, it cannot predict with certainty on which of
those prospects wells will be started during 2002 nor can it predict what
producing properties, if any, will be acquired by it during 2002.  Further,
since the General Partner anticipates that the Partnership will acquire a small
interest (either directly or through any drilling or income programs of which it
or UNIT serves as a general partner) in approximately 125 to 150 wells (however,
the exact number of wells may vary greatly depending on the actual activity
undertaken), it would be impractical to describe in any detail all of the
properties in which the Partnership can be expected to acquire some interest.

     The Partnership's drilling and development operations are expected to
include both Exploratory Wells and comparatively lower-risk Development Wells.
Exploratory Wells include both the high-risk "wildcat" wells which are located
in areas substantially removed from existing production and "controlled"
Exploratory Wells which are located in areas where production has been
established and where objective horizons have produced from similar geological
features in the vicinity.  Based on UNIT's historical profile of its drilling
operations, it is presently anticipated that the portion of the Aggregate
Subscription expended for Partnership drilling operations (see "APPLICATION OF
PROCEEDS") will be spent approximately 7% on Exploratory Wells and 93% on
Development Wells.  However, these percentages may vary significantly.

     Certain of the Partnership's Development Wells may be drilled on prospects
on which initial drilling operations were conducted by the General Partner or
UNIT prior to the formation of the Partnership.  Further, certain of the
Partnership Wells will be drilled on prospects on which the General Partner,
UNIT or possibly future employee programs may conduct additional drilling
operations in years subsequent to 2002.  In either instance, the Partnership
will have an interest only in those wells begun in 2002 and will have no rights
in production from wells commenced in years other than 2002 even though
such other wells may be located on prospects or spacing units on which
Partnership Wells have been drilled.  Furthermore, it is possible that in years
subsequent to 2002, UNIT, UPC or possibly future

                                     27

<PAGE>
employee programs will acquire additional interests in wells participated in by
the Partnership.  In such event the Partnership will generally not be entitled
to share in the acquisition of such additional interests.  With respect to the
acquisition of producing properties, UNIT will endeavor to diversify its
investments by acquiring properties located in differing geographic locations
and by balancing its investments between properties having high rates of
production in early years and properties with more consistent production over a
longer term.  See "CONFLICTS OF INTERESTS -- Acquisition of Properties and
Drilling Operations."

Partnership Objectives

     The Partnership is being formed to provide eligible employees and directors
the opportunity to participate in the oil and gas exploration and producing
property acquisition activities of UNIT during 2002.  UNIT hopes that
participation in the Partnership will provide the participants with greater
proprietary interests in its operations and the potential for realizing a more
direct benefit in the event these operations prove to be profitable.  The
Partnership has been structured to achieve the objective of providing the
Limited Partners with essentially the same economic returns that UNIT realizes
from the wells drilled or acquired during 2002.

Areas of Interest

     The Agreement authorizes the Partnership to engage in oil and gas
exploration, drilling and development operations and to acquire producing oil
and gas properties anywhere in the United States, but the areas presently under
consideration are located in the states of Oklahoma, Texas, Louisiana, Kansas,
Arkansas, Colorado, Montana, North Dakota and Wyoming.  It is possible that the
Partnership may drill in inland waterways, riverbeds, bayous or marshes but no
drilling in the open seas will be attempted.  Plans to conduct drilling and
development operations or to acquire producing properties in certain of these
states may be abandoned if attractive prospects cannot be obtained upon
satisfactory terms or if the Partnership is not fully subscribed.

Transfer of Properties

     In the case of wells drilled or producing properties acquired by the
Partnership and UPC or UNIT for their own accounts and not through another
drilling or income program, the Partnership will acquire from UPC or UNIT a
portion of the fractional undivided working interest in the properties or
portions thereof comprising the spacing unit on which a proposed Partnership
Well is to be drilled or on which a producing Partnership Well is located, and
UPC or UNIT will retain for its own account all or a portion of the remainder of
such working interest.  Such working interests will be sold to the Partnership
for an amount equal to the Leasehold Acquisition Costs attributable to the
interest being acquired.  Neither UNIT nor its affiliates will retain any
overrides or other burdens on the working interests conveyed to the Partnership,
and the respective working interests of UPC or UNIT and the Partnership in a
property will bear their proportionate shares of costs and revenues.

     The Partnership's direct interest in a property will only encompass the
area included within the spacing unit on which a Partnership Well is to be
drilled or on which a producing Partnership Well is located, and, in the case of
a Partnership Well to be drilled, it will acquire that interest only when the
drilling of the well is ready to commence.  If the size of a spacing unit is
ever reduced, or any subsequent well in which the Partnership has no interest is
drilled thereon, the Partnership will have no interest in any additional wells
drilled on properties which were part of the original spacing unit unless such
additional wells are commenced during 2002.  If additional interests in
Partnership Wells are

                                     28

<PAGE>
acquired in years subsequent to 2002 the Partnership will generally not be
entitled to participate or share in the acquisition of such additional
interests.  In addition, if the Partnership Well drilled on a spacing unit is
dry or abandoned, the Partnership will not have an interest in any subsequent or
additional well drilled on the spacing unit unless it is commenced during 2002.
The Partnership will never own any significant amounts of undeveloped properties
or have an occasion to sell or farm out any undeveloped Partnership Properties.

     Transfers of properties to any drilling or income programs of which the
Partnership serves as a general partner will be governed by the provisions of
the agreement of limited partnership in effect with respect thereto.  If any
such program is to be offered publicly, those provisions will have to be
consistent with the provisions contained in the Guidelines for the Registration
of Oil and Gas Programs adopted by the North American Securities Administrators
Association, Inc.

Record Title to Partnership Properties

     Record title to the Partnership Properties will be held by the General
Partner.  However, the General Partner will hold the Partnership Properties as a
nominee for the Partnership under a form of nominee agreement to be entered into
between the General Partner and the Partnership.  Under the form of nominee
agreement, the General Partner will disclaim any beneficial interest in the
Partnership Properties held as nominee for the Partnership.

Marketing of Reserves

     The General Partner has the authority to market the oil and gas production
of the Partnership.  In this connection, it may execute on behalf of the
Partnership division orders, contracts for the marketing or sale of oil, gas or
other hydrocarbons or other marketing agreements.  Sales of the oil and gas
production of the Partnership will be to independent third parties or to the
General Partner or its affiliates (see "CONFLICTS OF INTEREST").

Conduct of Operations

     The General Partner will have full, exclusive and complete discretion and
control over the management, business and affairs of the Partnership and will
make all decisions affecting the Partnership Properties.  To the extent that
Partnership funds are reasonably available, the General Partner will cause the
Partnership to (1) test and investigate the Partnership Properties by
appropriate geological and geophysical means, (2) conduct drilling and
development operations on such Partnership Properties as it deems appropriate in
view of such testing and investigation, (3) attempt completion of wells so
drilled if in its opinion conditions warrant the attempt and (4) properly
equip and complete productive Partnership Wells.  The General Partner will also
cause the Partnership's productive wells to be operated in accordance with sound
and economical oil and gas recovery practices.

     The General Partner will operate certain drilling and productive wells on
behalf of the Partnership in accordance with the terms of the Agreement (see
"COMPENSATION").  In those cases, execution of separate operating agreements
will not be necessary unless third party owners are involved, e.g., fractional
undivided interest Partnership Properties and Partnership Properties that are
pooled or unitized with other properties owned by third parties.  In such cases,
and in all cases where Partnership Properties are operated by third parties, the
General Partner will, where appropriate, make or cause to be made and enter into
operating agreements, pooling agreements, unitization agreements, etc., in the
form

                                     29

<PAGE>
in general use in the area where the affected property is located.  The General
Partner is also authorized to execute production sales contracts on behalf of
the Partnership.

                            APPLICATION OF PROCEEDS

     The Aggregate Subscription will be used to pay costs and expenses incurred
in the operations of the Partnership which are chargeable to the Limited
Partners.  The organizational costs of the Partnership and the offering costs of
the Units will be paid by the General Partner.

     If all 600 Units offered hereby are sold, the proceeds to the Partnership
would be $600,000.  If the minimum 50 Units are sold, the proceeds to the
Partnership would be $50,000.  The General Partner estimates that the gross
proceeds will be expended as follows:

                                        $600,000           $50,000
                                         Program           Program
                                    ----------------   ----------------
                                    Percent   Amount   Percent   Amount
                                    -------  -------   -------  -------
Leasehold Acquisition Costs
  of Properties to Be Drilled......    5%   $ 30,000      5%    $ 2,500
Drilling Costs of Exploratory
  Wells............................    5%     30,000      5%      2,500
Drilling Costs of Develop-
  ment Wells.......................   70%    420,000     70%     35,000
Leasehold Acquisition Costs
  of Productive Properties.........   20%    120,000     20%     10,000

          Total....................  100%   $600,000    100%    $50,000

     The foregoing allocation between Drilling Costs and Leasehold Acquisition
Costs is solely an estimate and the actual percentages may vary materially from
this estimate.  Funds otherwise available for drilling Exploratory Wells will be
reduced to the extent that such funds are used in conducting development
operations in which the Partnership participates.

     Until Capital Contributions are invested in the Partnership's operations,
they will be temporarily deposited, with or without interest, in one or more
bank accounts of the Partnership or invested in short-term United States
government securities, money market funds, bank certificates of deposit or
commercial paper rated as "A1" or "P1" as the General Partner deems advisable.
Partnership funds other than Capital Contributions may be commingled with the
funds of the General Partner or UNIT.

                       PARTICIPATION IN COSTS AND REVENUES

     All costs of organizing the Partnership and offering Units therein will be
paid by the General Partner.  All costs incurred in the offering and syndication
of any drilling or income program formed by UPC or UNIT and its affiliates
during 2002 in which the Partnership participates as a co-general partner will
also be paid by the General Partner.  All other Partnership costs and expenses
will be charged 99% to the Limited Partners and 1% to the General Partner until
such time as the Aggregate Subscription has been fully expended.  Thereafter and
until the General Partner's Minimum Capital Contribution has been fully
expended, all of such costs and expenses will be charged to the General Partner.
After the General Partner's Minimum Capital Contribution has been fully
expended, such costs and expenses will be

                                     30

<PAGE>
charged to the respective accounts of the General Partner and the Limited
Partners on the basis of their respective Percentages (see "GLOSSARY").

     All Partnership Revenues will be allocated between the General Partner and
the Limited Partners on the basis of their respective Percentages.

     The General Partner's Minimum Capital Contribution will be determined as of
December 31, 2002 and will be an amount equal to:

(a)  all costs and expenses previously charged to the General Partner as of that
     date, plus

(b)  the General Partner's good faith estimate of the additional amounts that it
     will have to contribute in order to fund the Leasehold Acquisition Costs
     and Drilling Costs expected to be incurred by the Partnership after that
     date.

The respective Percentages of the General Partner and the Limited Partners will
then be determined as of December 31, 2002 based on the relative contributions
of the Partners previously made and expected to be made in the future during the
remainder of the Partnership's property acquisition and drilling phases.  See
"GLOSSARY -- General Partner's Minimum Capital Contribution", "General Partner's
Percentage" and " Limited Partners' Percentage."  If the General Partner's
estimate of future Leasehold Acquisition Costs and Drilling Costs proves to be
lower than the actual amount of such costs and expenses, the excess amounts will
be charged to the Partners on the basis of their respective Percentages and the
Limited Partners' share will be paid out of their share of Partnership Revenues,
Additional Assessments required of them or the proceeds of Partnership
borrowings.  See "ADDITIONAL FINANCING."  If the General Partner's estimate of
such costs and expenses proves to be higher than the actual costs and expenses,
the General Partner will continue to bear Partnership costs and expenses that
would otherwise have been chargeable to the Limited Partners until the total
Partnership costs and expenses charged to it (including, without limitation,
offering and organizational costs, Operating Expenses, general and
administrative overhead costs and reimbursements and Special Production and
Marketing Costs as well as Leasehold Acquisition Costs and Drilling Costs) since
the formation of the Partnership equals the General Partner's Minimum Capital
Contribution.  In addition to actual contributions of cash or properties, any
Partner will be deemed to have contributed amounts of Partnership Revenues
allocated to it which are used to pay its share of Partnership costs and
expenses.

     The following table presents a summary of the allocation of Partnership
costs, expenses and revenues between the General Partner and the Limited
Partners:

                                               General            Limited
                                               Partner            Partners
                                               -------            --------
COSTS AND EXPENSES

.. Organizational and offering
  costs of the Partnership and any
  drilling or income programs in
  which the Partnership participates
  as a co-general partner.................      100%                 0%

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<PAGE>
                                               General            Limited
                                               Partner            Partners
                                               -------            --------
.. All other Partnership Costs and
  Expenses:

  .  Prior to time Limited Partner
     Capital Contributions are
     entirely expended....................        1%                99%

  .  After expenditure of Limited
     Partner Capital Contributions
     and until expenditure of
     General Partner's Minimum
     Capital Contribution.................      100%                 0%

  .  After expenditure of General              General            Limited
     Partner's Minimum Capital                Partner's          Partners'
     Contribution.........................    Percentage         Percentage

REVENUES                                       General            Limited
                                              Partner's          Partners'
                                              Percentage         Percentage

                                 COMPENSATION

Supervision of Operations

     It is anticipated that the General Partner will operate most, if not all,
Partnership Properties during the drilling of Partnership Wells and most, if not
all, productive Partnership Wells.  For the General Partner's services performed
as operator, the Partnership will compensate the General Partner its pro rata
portion of the compensation due to the General Partner under the operating
agreements, if any, in effect with respect to such wells or, if none is in
effect for such wells, at rates no higher than those normally charged in the
same or a comparable geographic area by non-affiliated persons or companies
dealing at arm's length.

     That portion of the General Partner's general and administrative overhead
expense that is attributable to its conduct of the actual and necessary
business, affairs and operations of the Partnership will be reimbursed by the
Partnership out of Partnership Revenue.  The General Partner's general and
administrative overhead expenses are determined in accordance with industry
practices.  The costs and expenses to be allocated include all customary and
routine legal, accounting, geological, engineering, travel, office rent,
telephone, secretarial, salaries, data processing, word processing and other
incidental reasonable expenses necessary to the conduct of the Partnership's
business and generated by the General Partner or allocated to it by UNIT, but
will not include filing fees, commissions, professional fees, printing costs and
other expenses incurred in forming the Partnership or offering interests
therein.  The amount of such costs and expenses to be reimbursed with respect to
any particular period will be determined by allocating to the Partnership that
portion of the General Partner's total general and administrative overhead
expense incurred during such period which is equal to the ratio of the
Partnership's total expenditures compared to the total expenditures by the
General Partner for its own account.  The portion of such general and
administrative overhead expense reimbursement which is charged to the Limited
Partners may not exceed an amount equal to 3% of the Aggregate Subscription
during the first 12 months of the Partnership's operations, and in each
succeeding twelve-month period, the lesser of (a) 2% of the Aggregate
Subscription and (b) 10% of the total Partnership Revenue realized

                                     32

<PAGE>
in such twelve-month period.  Administrative expenses incurred directly by the
Partnership, or incurred by the General Partner on behalf of the Partnership and
reimbursable to the General Partner, such as legal, accounting, auditing,
reporting, engineering, mailing and other such fees, costs and expenses are not
considered a part of the general and administrative expense reimbursed to the
General Partner and the amounts thereof will not be subject to the limitations
described in the preceding sentence.

Purchase of Equipment and Provision of Services

     UNIT, through its subsidiary Unit Drilling Company, will probably perform
significant drilling services for the Partnership.  In addition, UNIT owns a 40%
interest in Superior Pipeline Company, L.L.C., an Oklahoma limited liability
company, which may build or own an interest in certain gathering systems through
which a portion of the Partnership's gas production is transported.

     These persons are in the business of supplying such equipment and services
to non-affiliated parties in the industry and any such equipment and such
services will be acquired or provided at prices or rates no higher than those
normally charged in the same or comparable geographic area by non-affiliated
persons or companies dealing at arms' length.  Production purchased by any
affiliate of UNIT will be for prices which are not less than the highest posted
price (in the case of crude oil) or prevailing price (in the case of natural
gas) in the same field or area.

     UNIT or one of its affiliates may provide other goods or services to the
Partnership in which event the compensation received therefore will be subject
to the same restrictions and conditions described above and under "CONFLICTS OF
INTEREST" below.

Prior Programs

     UNIT was formed in 1986 in connection with a major reorganization and
recapitalization whereby UNIT acquired all of the assets and liabilities of all
of the limited partnerships formed by UNIT's predecessor, Unit Drilling and
Exploration Company ("UDEC"), during the period of 1980 through 1983 in exchange
for shares of UNIT's common stock and UDEC was merged with a wholly owned
subsidiary of UNIT whereby UDEC was the surviving corporation and thereby became
a wholly owned subsidiary of UNIT.  UNIT has conducted one oil and gas
program since the date of its formation, the 1986 Energy Program.  The 1986
Energy Program was formed on June 12, 1987 with total subscriptions of one
million dollars.  The Unit 1986 Employee Oil and Gas Limited Partnership is a
co-general partner with Unit Petroleum Company of the 1986 Energy Program.
Direct compensation charged to or paid by the partnerships and earned by the
General Partners for their services in connection with these programs through
September 30, 2001, is set forth below.

                                 Compensation
                                      for
                                  Supervision    Reimbursement
                                      and          of General
                                  Operation of   Administrative
                                  Productive          and            Fees
                                     and           Overhead      Received as
                     Management    Drilling         Expense       a Drilling
Program                Fee(1)     Wells(2)(3)      (2)(3)(4)    Contractor(2)
-------                -------    -----------     -----------   -------------
1979...............    150,000     2,589,182       2,437,750      1,835,762
1980...............    200,000       261,456       1,345,158      1,810,310
1981...............  1,250,000       329,695       1,892,568      4,047,260
1981-II............    450,000       158,406       1,607,706      1,629,201
1982-A.............    634,200       521,910       1,688,024      4,110,107

                                     33

<PAGE>
                                 Compensation
                                      for
                                  Supervision    Reimbursement
                                      and          of General
                                  Operation of   Administrative
                                  Productive          and            Fees
                                     and           Overhead      Received as
                     Management    Drilling         Expense       a Drilling
Program                Fee(1)     Wells(2)(3)      (2)(3)(4)    Contractor(2)
-------                -------    -----------     -----------   -------------
1982-B.............    316,650       331,594       1,224,023      4,945,437
1983-A.............     50,600       151,289         698,597        695,255
1984...............          -       273,929         861,718        829,503
1984 Employee(*)...          -         3,924           5,000         13,452
1985 Employee(*)...          -        10,316               -         54,892
1986 Energy
Income Fund(**) ...          -       288,586       1,022,687         64,945
1986 Employee(*)...          -        23,505               -         59,446
1987 Employee(*)...          -        50,688               -         97,079
1988 Employee(*)...          -        93,854               -        112,861
1989 Employee(*)...          -        54,536               -        165,436
1990 Employee(*)...          -        28,884               -        144,722
1991 Employee......          -       506,410               -        144,993
1992 Employee......          -       138,171               -         14,934
1993 Employee......          -        74,296               -         68,504
Consolidated
Program(*).........          -       149,229               -              -
1994 Employee......          -       102,509               -         41,403
1995 Employee......          -        61,406               -         35,903
1996 Employee......          -        68,889               -        112,911
1997 Employee......          -        57,738               -        170,173
1998 Employee......          -        41,093               -        161,094
1999 Employee......          -        63,223               -        186,408
2000 Employee......          -        21,317               -        601,080
2001 Employee......          -         1,407               -        194,929
_______________
(*)  Effective December 31, 1993, pursuant to an Agreement and Plan of Merger,
this employee partnership was merged with and into the Unit Consolidated
Employee Oil and Gas Limited Partnership (the "Consolidated Program"), with the
latter being the surviving limited partnership.  See Prior Activities.

(**) Formed primarily for purposes of acquiring producing oil and gas
properties.

     (1)  Paid to both UDEC and a prior Key Employee Exploration Fund as general
partners.  No management fee was payable to UDEC or any of its affiliates by any
of the 1984 - 2001 Employee Programs and no management fee is payable by the
Partnership to UNIT or any of its affiliates.

     (2)  Paid only to UDEC.

     (3)  In the case of compensation for supervision and operation of
productive wells and reimbursement of UNIT's general and administrative overhead
expense, the general partners generally were charged with and paid a percentage
of such amounts equal to the percentage of partnership revenues being allocated
to them.

     (4)  Although the partnership agreement for each of the 1985 - 2001
Employee Programs provides that the General Partner is entitled to reimbursement
for the general administrative and overhead expenses attributable to each of
such programs, the General Partner has to date elected not to

                                     34

<PAGE>
seek such reimbursement.  However, there can be no assurance that the General
Partner will continue to forego such reimbursement in the future.

     (5)  Includes a special allocation of gross revenues totaling $500,000.

                                 MANAGEMENT

The General Partner

     UNIT was formed in 1986 in connection with a major reorganization and
recapitalization whereby UNIT acquired all of the assets and liabilities of all
of the limited partnerships formed by UNIT's predecessor, UDEC, during the
period of 1980 through 1983 in exchange for shares of UNIT's common stock and
UDEC was merged with a wholly owned subsidiary of UNIT whereby UDEC was the
surviving corporation and thereby became a wholly owned subsidiary of UNIT.  UPC
was incorporated in the State of Oklahoma on February 9, 1984 as Sunshine
Development Corporation ("SDC").  On October 8, 1985 pursuant to the terms of a
Stock Purchase Agreement," UDEC purchased all of the issued and outstanding
stock of SDC whereby SDC became a wholly owned subsidiary of UDEC.  On February
1, 1988, pursuant to the terms of an "Amended and Restated Certificate of
Incorporation", SDC was renamed Unit Petroleum Company.

     UPC's as well as UNIT's, principal office is at 1000 Kensington Tower I,
7130 South Lewis Avenue, Tulsa, Oklahoma 74136 and its telephone number is (918)
493-7700.  UNIT through its various subsidiaries is engaged in the onshore
contract drilling of oil and gas wells and in the exploration for and production
of oil and gas.  Unless the context otherwise requires, references in this
Memorandum to UNIT include its predecessor as well as all or any of its
subsidiaries.

Officers, Directors and Key Employees

     The Partnership will have no directors or officers.  The directors of the
General Partner are elected annually and serve until their successors are
elected and qualified.  Directors of UNIT are elected at the Annual Meeting of
Shareholders for a staggered term of three years each, or until their successors
are duly elected and qualified.  The executive officers of the General Partner
are elected by and serve at the pleasure of its Board of Directors.  The names,
ages and respective positions of the directors and executive officers of UNIT
are as follows:

     Name                        Age                  Position
     ----                        ---                  --------
King P. Kirchner                  74            Chairman of the Board and
                                                 Director

John G. Nikkel                    66            President, Chief Executive
                                                 Officer, Chief Operating
                                                 Officer and Director

O. Earle Lamborn                  66            Senior Vice President,
                                                 Drilling and Director

                                     35

<PAGE>
Philip M. Keeley                  60            Senior Vice President,
                                                 Exploration and Production

Larry D. Pinkston                 47            Vice President, Treasurer
                                                 and Chief Financial Officer

Mark E. Schell                    44            Secretary and General Counsel

William B. Morgan                 57            Director

Don Cook                          76            Director

John S. Zink                      73            Director

John H. Williams                  83            Director

J. Michael Adcock                 52            Director

     The names, ages and respective positions of the directors and
executive officers of UPC are as follows:

     Name                        Age                  Position
     ----                        ---                  --------
King P. Kirchner                  74            Chairman of the Board

John G. Nikkel                    66            President and Director

Philip M. Keeley                  60            Vice President and Director

Mark E. Schell                    44            Secretary, General Counsel
                                                 and Director

Larry Pinkston                    47            Treasurer

     Mr. Kirchner, a co-founder of UNIT, has been the Chairman of the Board and
a director since 1963.  He served as the Company's  President until November
1983 and as its Chief Executive Officer until June 30, 2001.  Mr.  Kirchner is a
Registered Professional Engineer within the State of Oklahoma, having received
degrees in Mechanical Engineering from Oklahoma State University and in
Petroleum Engineering, with honors, from the University of Oklahoma.  Following
graduation, he was employed by Lufkin Manufacturing as a development engineer
for hydraulic pumping units.  Prior to co-founding Unit he served in the US Army
during the Korean War and after that as vice-president engineering and
operations for Woolaroc Oil Company.

     Mr. Nikkel joined UNIT in 1983 as its President and a director.  On July 1,
2001 Mr. Nikkel was elected to the additional office of Chief Executive Officer
on July 1, 2001.  From 1976 until January 1982 when he co-founded Nike
Exploration Company, Mr. Nikkel was an officer and director of Cotton Petroleum

                                     36

<PAGE>
Corporation, serving as the President of Cotton from 1979 until his departure.
Prior to joining Cotton, Mr. Nikkel was employed by Amoco Production Company for
18 years, last serving as Division Geologist for Amoco's Denver Division.  Mr.
Nikkel presently serves as President and a director of Nike Exploration Company.
Mr. Nikkel received a Bachelor of Science degree in Geology and Mathematics from
Texas Christian University.

     Mr. Lamborn has been actively involved in the oil field for over 50 years,
joining UNIT's predecessor in 1952 prior to its becoming a publicly-held
corporation.  He was elected Vice President, Drilling in 1973 and to his current
position as Senior Vice President, Drilling and director in 1979.

     Mr. Keeley joined UNIT in November 1983 as Senior Vice President,
Exploration and Production.  Prior to that time, Mr. Keeley co-founded (with Mr.
Nikkel) Nike Exploration Company in January 1982 and, until November 2001,
served as Executive Vice President and a director of that company.  From 1977
until 1982, Mr. Keeley was employed by Cotton Petroleum Corporation, serving
first as Manager of Land and from 1979 as Vice President and a director.  Before
joining Cotton, Mr. Keeley was employed for four years by Apexco, Inc. as
Manager of Land and prior thereto he was employed by Texaco, Inc. for nine
years.  He received a Bachelor of Arts degree in Petroleum Land Management from
the University of Oklahoma.

     Mr. Pinkston joined UNIT in December 1981.  He had served as Corporate
Budget Director and Assistant Controller prior to being appointed Controller in
February 1985.  He has been Treasurer since December 1986 and was elected to the
position of Vice President and Chief Financial Officer in May 1989.  He holds a
Bachelor of Science Degree in Accounting from East Central University of
Oklahoma and is a Certified Public Accountant.

     Mr. Schell joined UNIT in January 1987, as its Secretary and General
Counsel.  From 1979 until joining UNIT, Mr. Schell was Counsel, Vice President
and a member of the Board of Directors of C&S Exploration, Inc.  He received a
Bachelor of Science degree in Political Science from Arizona State University
and his Juris Doctorate degree from the University of Tulsa Law School.  He is a
member of the Oklahoma and American Bar Association as well as being a member of
the American Corporate Counsel Association and the American Society of Corporate
Secretaries.

     Mr. Morgan was elected a director of UNIT in February 1988.  Mr. Morgan has
been Executive Vice President and General Counsel of St.  John Health System,
Inc., Tulsa, Oklahoma, since March 1, 1995 and, since October 1, 1996, the
President of its principal for profit subsidiary Utica Services, Inc.  Before
that, he was a Partner in the law firm of Doerner, Saunders, Daniel & Anderson,
Tulsa, Oklahoma, for over 20 years.

     Mr. Cook has served as a director of UNIT since UNIT's inception.  He is a
Certified Public Accountant and was a partner in the accounting firm of Finley &
Cook, Shawnee, Oklahoma, from 1950 until 1987, when he retired.

     Mr. Zink was elected a director of UNIT in May 1982.  For over 5 years, he
has been a principal in several privately held companies engaged in the
businesses of designing and manufacturing equipment used in the petroleum
industry, construction and heating and air conditioning services and
installation.  He holds a Bachelor of Science degree in Mechanical Engineering
from Oklahoma State University.  He is also a director of Matrix Service
Company, Tulsa, Oklahoma.

                                     37
<PAGE>
     Mr. Williams was elected a director of UNIT in December 1988.  Prior to
retiring on December 31, 1978, he was Chairman of the Board and Chief Executive
Officer of The Williams Companies, Inc. where he continues to serve as an
honorary director.  Mr. Williams also serves as a director of Apco Argentina,
Inc., Westwood Corporation, and Willbros Group, Inc.  In addition, Mr. Williams
also serves as a director of the Gilcrease and Philbrook Museums and is a
Trustee for the Tulsa Performing Arts Center Trust.

     Mr. Adcock was elected a director of UNIT in December 1997.  He is an
attorney and currently manages a private trust that deals in real estate, oil
and gas properties and commercial banking as well as other equity investments.
He is Chairman of the Board of Arvest Bank, Shawnee and Mid-America Heathcare,
Inc..  Between 1997 through September, 1998 he was the Chairman of the Board of
Ameribank and President and Chief Executive Officer of American National Bank
and Trust Company of Shawnee, Oklahoma, and Chairman of AmeriTrust Corporation,
Tulsa, Oklahoma.  Prior to holding these positions, he was engaged in the
private practice of law and served as General Counsel for Ameribank Corporation.

Prior Employee Programs

     Since 1984, UNIT has formed limited partnerships for investment by certain
of its key employees and directors that participate with UNIT in its exploration
and production operations.  The name, month of formation and amount of limited
partner capital subscriptions of each of these limited partnerships (the
"Employee Programs") are set forth below.

                                                                  Limited
                                                                 Partners'
                                                                  Capital
               Name                               Formed       Subscriptions
               ----                               ------       -------------

Unit 1984 Employee Oil and Gas Program          April 1984        $348,000

Unit 1985 Employee Oil and Gas Limited
Partnership                                    January 1985       $378,000

Unit 1986 Employee Oil and Gas Limited
Partnership                                    January 1986       $307,000

Unit 1987 Employee Oil and Gas Limited
Partnership                                     March 1987        $209,000

Unit 1988 Employee Oil and Gas Limited
Partnership                                   April 29, 1988      $177,000

Unit 1989 Employee Oil and Gas Limited
Partnership                                  December 30, 1988    $157,000

Unit 1990 Employee Oil and Gas Limited
Partnership                                   January 19, 1990    $253,000

Unit 1991 Employee Oil and Gas Limited
Partnership                                    January 7, 1991    $263,000

Unit 1992 Employee Oil and Gas Limited
Partnership                                   January 23, 1992    $240,000

Unit 1993 Employee Oil and Gas Limited
Partnership                                   January 21, 1993    $245,000

Unit 1994 Employee Oil and Gas Limited
Partnership                                   January 19, 1994    $284,000

                                     38

<PAGE>
                                                                  Limited
                                                                 Partners'
                                                                  Capital
               Name                               Formed       Subscriptions
               ----                               ------       -------------
Unit 1995 Employee Oil and Gas Limited
Partnership                                     March 7, 1995     $454,000

Unit 1996 Employee Oil and Gas Limited
Partnership                                   February 5, 1996    $437,000

Unit 1997 Employee Oil and Gas Limited
Partnership                                  February 4, 1997     $413,000

Unit 1998 Employee Oil and Gas Limited
Partnership                                  February 19, 1998    $471,000

Unit 1999 Employee Oil and Gas Limited
Partnership                                  February 22, 1999    $188,000

Unit 2000 Employee Oil and Gas Limited
Partnership                                  February 22, 2000    $199,000

Unit 2001 Employee Oil and Gas Limited
Partnership                                   February 9, 2001    $370,000

     One-half of the capital subscriptions from all limited partners were
required to be paid in the 1984 Employee Program, three-fourths of the capital
subscriptions from all limited partners were required to be paid in the 1985
Employee Program and the 1986 Employee Program.  All of the capital
subscriptions from all limited partners, including those shown below, were
required to be paid in the 1987 through 1999 Employee Programs.  The capital
subscriptions of the following limited partners to the 1999, 2000 and 2001
Employee Programs were as shown below:

                                                   Amount of Capital
                                                     Subscripation
                      Position with                  -------------
   Subscriber              UNIT             1999         2000         2001
   ----------              ----             ----         ----         ----

King P. Kirchner   Chairman of the Board  $20,000 (1)       $0 (1)  $25,000
                   and Chief Executive
                   Officer

John G. Nikkel     President, Chief       $94,264 (2) $114,264 (2) $151,400 (2)
                   Operating Officer
                   and Director

Philip M. Keeley   Senior Vice President, $31,736 (2)  $33,736 (2)  $43,600 (2)
                   Exploration and
                   Production
_______________
     (1)  Mr. Kirchner invested $20,000 indirectly in each of the 1999 Employee
Program and $25,000 in the 2001 Employee Programs, through the King P. Kirchner
Revocable Trust as permitted by the limited partnership agreement of those
Employee Programs.

     (2)  Messrs. Nikkel and Keeley have invested in the 1999, 2000 and 2001
Employee Programs both directly and through Nike Exploration Company which is
owned 71.4% by Mr. Nikkel and 28.6% by Mr. Keeley.  The amounts invested
directly and indirectly through Nike Exploration Company in the 1999, 2000 and
2001 Employee Programs by Messrs. Nikkel and Keeley are set forth below:

                                     39

<PAGE>
                                                  Nike
            Employee   Mr. Nikkel  Mr. Keeley  Exploration
             Program    Directly    Directly     Company
             -------    --------    --------     -------

              1999       $40,000     $10,000     $76,000
              2000       $60,000     $12,000     $76,000
              2001       $80,000     $15,000    $100,000

Ownership of Common Stock

     UNIT's Common Stock is listed on the New York Stock Exchange as reported on
the Composite Tape.  On December 11, 2001, there were 36,005,367 shares
outstanding.

     As of December 11, 2001, the directors and officers of UNIT owned of record
or beneficially owned shares of UNIT Common Stock as follows:

                                   Amount of
                                   Beneficial             % of
Name                             Ownership (1)       Outstanding(1)
----                             -------------       -----------
King P. Kirchner.............    898,628 (2)             2.5
John Williams................      4,500 (3)             *
Don Cook.....................     27,618 (3)             *
Philip M. Keeley.............    132,734 (2)(4)          *
Earle Lamborn................    265,113 (2)(4)          *
John G. Nikkel...............    410,501 (2)(4)          1.1
Larry D. Pinkston............     57,075 (2)(4)          *
Mark E. Schell...............     33,711 (2)(4)          *
John S. Zink.................     68,000 (3)             *
William B. Morgan............     17,100 (3)             *
J. Michael Adcock............    599,791 (3)(5)          1.6

All Officers and Directors
    as a Group...............  2,514,771                 6.9
_______________
     *Less than 1%

     (1)  The number of shares includes the shares presently issued and
outstanding plus the number of shares which any owner has the right to acquire
within 60 days after December 11, 2001, pursuant to the exercise of currently
exercisable stock options. For purposes of calculating the percent of the shares
outstanding held by each owner, the total number of shares excludes the shares
which all other persons have the right to acquire within 60 days after December
11, 2001 pursuant to the exercise of currently exercisable stock options.

     (2)  Includes shares of common stock held under UNIT's 401(k) thrift plan
as of December 10, 2001 for the account of: Earle Lamborn, 13,139; John G.
Nikkel, 30,842; Philip M. Keeley, 11,152; Larry D. Pinkston, 483; and Mark E.
Schell, 29,172.

                                     40

<PAGE>
     (3)  Includes unexercised stock options granted under UNIT's non-Employee
Directors' Stock Option Plan to each of the following, all of which are
currently exercisable at the discretion of the holder: J.  Michael Adcock,
12,000; Don Cook, 22,000; William B. Morgan, 11,000; John H.  Williams, 3,500;
John S. Zink, 27,000; and all non-Employee Directors as a group, 75,500.

     (4)  Includes unexercised stock options granted under UNIT's Amended and
Restated Stock Option Plan to each of the following, all of  which are currently
exercisable at the discretion of the holder: John G. Nikkel 103,000; Philip M.
Keeley, 32,500; Earle Lamborn, 38,500; Larry D. Pinkston, 16,200; and Mark E.
Schell, 16,200.

     (5)  Of the shares shown, Mr. J. Michael Adcock is deemed to be the
beneficial owner of  587,791 shares by virtue of his position as one of three
trustees of the Don Bodard 1995 Revocable Trust.

Interest of Management in Certain Transactions

     Reference is made to "COMPENSATION" for a discussion of the compensation
for supervision and operation of productive wells and the reimbursement of
overhead expenses attributable to the Partnership's operations to which UNIT is
entitled under the terms of the Partnership Agreement.

                         CONFLICTS OF INTEREST

     There will be situations in which the individual interests of the General
Partner and the Limited Partners will conflict.  Although the General Partner is
obligated to deal fairly and in good faith with the Limited Partners and conduct
Partnership operations using the standards of a prudent operator in the oil and
gas industry, such conflicts may not in every instance be resolved to the
maximum advantage of the Limited Partners.  Certain circumstances which will
or may involve potential conflicts of interest are as follows:

     .    The General Partner currently manages and in the future will sponsor
          and manage oil and natural gas drilling programs similar to the
          Partnership.

     .    The General Partner will decide which prospects the Partnership will
          acquire.

     .    The General Partner will act as operator for Partnership Wells and
          will, through its affiliates, furnish drilling and/or marketing
          services with respect to Partnership Wells, the terms of which have
          not been negotiated by non-affiliated persons.

     .    The General Partner is a general partner of numerous other
          partnerships, and owes duties of good faith dealing to such other
          partnerships.

     .    The General Partner and its affiliates engage in drilling, operating
          and producing activities for other partnerships.

                                     41

<PAGE>
Acquisition of Properties and Drilling Operations

     With certain limited exceptions it is anticipated that the Partnership will
participate in each producing property, if any, acquired by the General Partner
and in the drilling of each of the wells, if any, commenced by the General
Partner for its own account during the period commencing January 1, 2002, or
from the formation of the Partnership if subsequent to January 1, 2002, through
December 31, 2002 except for wells:

     (i)   drilled outside the 48 contiguous United States;

     (ii)  drilled as part of secondary or tertiary recovery operations which
           were in existence prior to formation of the Partnership;

     (iii) drilled by third parties under farm-out or similar arrangements with
           UNIT or the General Partner or whereby UNIT or the General Partner
           may be entitled to an overriding royalty, reversionary or other
           similar interest in the production from such wells but is not
           obligated to pay any of the Drilling Costs thereof;

     (iv)  acquired by UNIT or the General Partner through the acquisition by
           UNIT or the General Partner of, or merger of UNIT or the General
           Partner with, other companies; or

     (v)   with respect to which the General Partner does not believe that the
           potential economic return therefrom justifies the costs and
           participation by the Partnership.

As a result, the Partnership may have an interest in wells located on prospects
on which producing wells have been drilled by UNIT or the General Partner in
prior years.  Likewise, it is possible that the Partnership will participate in
the drilling of initial wells on prospects on which some or all of the
development or offset wells will be drilled in years subsequent to 2002.  In the
latter case, the Partnership would have no right to participate in the drilling
of such development or offset wells.

     Sometimes UNIT will agree to participate in drilling operations on a
prospect which it may not believe are fully warranted from an economic
standpoint if it believes that such participation is necessary for, or will
significantly increase its chances of, obtaining a contract to drill the well
with one of its drilling rigs and the revenues from the contract make the
economics of the entire arrangement desirable from UNIT's standpoint.  In such
an instance, the Partnership would not be entitled to any of the drilling
contract revenues so the General Partner will not cause the Partnership to
participate in such a well.  However, an analysis of the economic potential of
any proposed well is a very inexact science and wells which have a very high
potential commonly prove to be dry or only marginally profitable and
occasionally a well with apparently very little promise may prove to be very
profitable.  Thus, there can be no assurance that the General Partner will
always make the most profitable decision from the Partnership's standpoint in
determining in which of such potential wells the Partnership should or should
not participate.

     Because the Partnership will acquire an interest only in those properties
comprising the spacing unit on which each Partnership Well is located, it will
not be entitled to participate in other wells drilled by the General Partner,
UNIT or any of its affiliates in the same prospect area unless the drilling of
those wells commences during the period from January 1, 2002, or from the
formation of the Partnership if subsequent to January 1, 2002, through December
31, 2002.  If the size of a spacing unit in which the Partnership has an
interest is reduced, the Partnership will have no interest in any additional
well drilled

                                     42

<PAGE>
on the property comprising the original spacing unit unless it is commenced
during the period from January 1, 2002, or from the formation of the Partnership
if subsequent to January 1, 2002, through December 31, 2002.  Likewise the
Partnership would have no interest in any increased density wells drilled on the
original spacing unit unless such wells were drilled during 2002.  In addition,
if additional interests are acquired in wells participated in by the Partnership
after 2002, the Partnership will generally not be entitled to participate in the
acquisition of such additional interests.  Management believes that the apparent
conflicts of interest arising from these situations are mitigated by the fact
that the Partnership is expected to participate in all of UNIT's drilling
operations (with the exceptions noted above) conducted during the period.  Thus,
there is little opportunity for the General Partner to selectively choose
Partnership drilling locations for the purpose of proving up other properties of
UNIT or its affiliates in which the Partnership has no interest.  Further, the
Partnership will benefit in many instances by its participation in the drilling
of wells located on prospects previously proved up by drilling operations
conducted by UNIT prior to formation of the Partnership.

Participation in UNIT's Drilling or Income Programs

     If UNIT forms any drilling or income programs in 2002, it is anticipated
that the Partnership will serve as a co-general partner with UNIT in any such
drilling or income programs, or both.  As the other co-general partner of any
such drilling or income program, UNIT would have exclusive management and
control over the business, operations and affairs of the drilling or income
program.  Conflicts of interest may arise between the limited partners and the
general partners of such drilling or income program and it is possible that
UNIT may elect to resolve those conflicts in favor of the limited partners.
Further, if any such drilling or income program is offered publicly, the program
agreement will be required to contain a number of provisions concerning the
conduct of program operations and handling conflicts of interests required by
the Guidelines for the Registration of Oil and Gas Programs adopted by the North
American Securities Administrators Association, Inc.  Such provisions may
significantly reduce the flexibility of UNIT in managing such programs or may
affect the profitability of the program operations or the transactions between
the general partners and the program.

Transfer of Properties

     The General Partner or its affiliates are authorized to transfer interests
in oil and gas properties to the Partnership, in which case the General Partner
or its affiliate will receive an amount equal to the Leasehold Acquisition Costs
attributable to the interests being acquired by the Partnership in the spacing
unit on which the Partnership Well is located or is to be drilled.  The amount
of the Leasehold Acquisition Costs attributable to the fractional undivided
interest in a property transferred to the Partnership by the General Partner or
any affiliate shall not be reduced or offset by the amount of any gain or profit
the General Partner or its affiliate might have realized by any prior sale or
transfer of a fractional undivided interest in the property to an unaffiliated
third party for a price in excess of the portion of the Leasehold Acquisition
Costs of the property that is attributable to the transferred interest.  The
Partnership will not be reimbursed for or refunded any Leasehold Acquisition
Costs if the size of a spacing unit on which a Partnership Well is located or
drilled is reduced even though the Partnership will have no interest in any
subsequent wells drilled on the area encompassed by the original spacing unit
unless they are commenced during 2002.

     A sale, transfer or conveyance to the Partnership of less than all of the
ownership of the General Partner or its affiliates in any interest or property
is prohibited unless:

                                     43

                                     43

<PAGE>
     (1)  the interest retained by the General Partner or its affiliates is a
          proportionate working interest;

     (2)  the obligations of the Partnership with respect to the properties will
          be substantially the same proportionately as those of the General
          Partner or its affiliates at the time it acquired the properties; and

     (3)  the Partnership's interest in revenues will not be less than the
          proportionate interest therein of the General Partner or its
          affiliates when it acquired the properties.

With respect to the General Partner or its affiliates' remaining interest, it
may retain such interest for its own account or it may sell, transfer, farm-out
or otherwise convey all or a portion of such remaining interest to non-
affiliated industry members, which may occur either before or after the transfer
of the interests in the same properties to the Partnership.  The General Partner
or its affiliates may realize a profit on the interests or may be carried to
some extent with respect to its cost obligations in connection with any drilling
on such properties and any such profit or interests will be strictly for the
account of the General Partner or its affiliates and the Partnership will have
no claim with respect thereto.  The General Partner or its affiliates may not
retain any overrides or other burdens on the property conveyed to the
Partnership (other than overriding royalty interests granted to geologists and
other persons employed or retained by the General Partner or its affiliates) and
may not enter into any farm-out arrangements with respect to its retained
interest except to non-affiliated third parties or other programs managed by the
General Partner or its affiliates.

Partnership Assets

     The General Partner will not take any action with respect to assets or
property of the Partnership which does not benefit primarily the Partnership as
a whole.  The General Partner will not utilize the funds of the Partnership as
compensating balances for the benefit of the General Partner or its affiliates.
All benefits from marketing arrangements or other relationships affecting
property of the Partnership will be fairly and equitably apportioned according
to the respective interests of the Partnership and the General Partner.

     The Partnership Agreement provides that when the Partnership is terminated,
there will be an accounting with respect to its assets, liabilities and
accounts.  The Partnership's physical property and its oil and gas properties
may be sold for cash.  Except in the case of an election by the General Partner
to terminate the Partnership before the tenth anniversary of the Effective Date,
Partnership Properties may be sold to the General Partner or any of its
affiliates for their fair market value as determined in good faith by the
General Partner.

Transactions with the General Partner or Affiliates

     UNIT provides through its subsidiary Unit Drilling Company contract
drilling services in the ordinary course of its business.  UNIT also owns a 40%
interest in Superior Pipeline Company, L.L.C.  which is engaged in the business
of buying and building gas gathering systems.  It is anticipated that the
Partnership will obtain services, equipment and supplies from one or both of
such persons.  In addition, UNIT may supply other goods or services to the
Partnership.  The terms of any contracts or agreements between the Partnership
and UNIT or any affiliate will be no less favorable to the Partnership than
those of comparable contracts or agreements entered into, and will be at prices
not in excess of (or in the case

                                     44

<PAGE>
of purchases of production, less than) those charged in the same geographical
area, by non-affiliated persons or companies dealing at arm's length.

     For its services as a drilling contractor, Unit Drilling Company will
charge the Partnership on either a daywork (a specified per day rate for each
day a drilling rig is on the drill site), a footage (a specified rate per foot
drilled) or a turnkey (specified amount for drilling the well) basis.  The rate
charged by Unit Drilling Company for such services will be the same as those
offered to unaffiliated third parties in the same or similar geographic areas.

Right of Presentment Price Determination

     Under the terms of the Partnership Agreement, a Limited Partner can,
subject to certain conditions, require the General Partner to purchase his or
her Units at a price determined by the application of a stated formula to the
estimated future net revenues attributable to the Partnership's estimated proved
reserves.  See "TERMS OF THE OFFERING -- Right of Presentment."  It is
anticipated that if an independent engineering firm makes an evaluation of the
proved reserves of the Partnership, the result of that evaluation will be
used in determining the price to be paid to a Limited Partner exercising his or
her right of presentment.  However, if no such independent evaluation is made,
the right of presentment purchase price will be determined by using the proved
reserves and future net revenue estimates of the technical staff of the General
Partner.

Receipt of Compensation Regardless of Profitability

     The General Partner is entitled to receive its fees and other compensation
and reimbursements from the Partnership regardless of whether the Partnership
operates at a profit or loss.  See "PARTICIPATION IN COSTS AND REVENUES" and
"COMPENSATION."  Such fees, compensation and reimbursements will decrease the
Limited Partners' share of any profits generated by operations of the
Partnership or increase losses if such operations should prove unprofitable.

Legal Counsel

     Conner & Winters serves as special legal counsel for the General Partner.
Such firm has performed legal services for the General Partner and UNIT and is
expected to render legal services to the Partnership.  Although such firm has
indicated its intention to withdraw from representation of the Partnership if
conflicts of interest do in fact arise, there can be no assurance that
representation of both the General Partner or UNIT and the Partnership by such
firm will not be disadvantageous to the Partnership.

                           FIDUCIARY RESPONSIBILITY

General

     Under Oklahoma law, the General Partner will have a fiduciary duty to the
Limited Partners and consequently must exercise good faith, fairness and loyalty
in the handling of the Partnership's affairs.  The General Partner must provide
Limited Partners (or their representatives) with timely and full information
concerning matters affecting the business of the Partnership.  Each Limited
Partner may inspect the Partnership's books and records upon reasonable prior
notice.  The nature of the fiduciary duties of general partners is an evolving
area of law and prospective investors who have questions concerning the duties
of the General Partner should consult with their counsel.

                                     45
<PAGE>
     Regardless of the fiduciary obligations of the General Partner, the General
Partner, UNIT or its affiliates, subject to any restrictions or requirements set
forth in the Agreement, may:

     .    engage independently of the Partnership in all aspects of the oil and
          gas business, either for their own accounts or for the accounts of
          others;

     .    sell interests in oil and gas properties held by them to, purchase oil
          and gas production from, and engage in other transactions with, the
          Partnership;

     .    serve as general partner of other oil and gas drilling or income
          partnerships, including those which may be in competition with the
          Partnership; and

     .    engage in other activities that may involve conflicts of interest.

See "CONFLICTS OF INTEREST."  Thus, unlike the strict duty of a fiduciary who
must act solely in the best interests of his or her beneficiary, the Agreement
permits the General Partner to consider, among other things, the interests of
other partnerships sponsored by the General Partner, UNIT or its affiliates in
resolving investment and other conflicts of interest.  The foregoing provisions
permit the General Partner to conduct its own operations and to act as the
general partner of more than one similar partnership or investment program and
for the Partnership to benefit from its experience resulting therefrom, but
relieves the General Partner of the strict fiduciary duty of a general partner
acting as such for only one investment program at a time.  These provisions are
primarily intended to reconcile the applicable duties under Oklahoma law with
the fact that the General Partner will manage and administer its own oil and
gas operations and a number of other oil and gas investment programs with which
possible conflicts of interests may arise and resolve such conflicts in a manner
consistent with the expectation of the investors in all such programs, the
General Partner's fiduciary duties and customary business practices and statutes
applicable thereto.

Liability and Indemnification

     The Agreement provides that the General Partner will perform its duties in
an efficient and businesslike manner with due caution and in accordance with
established practices of the oil and gas industry.  The Agreement further
provides that the General Partner and its affiliates will not be liable to the
Partnership or the Partners, and will be indemnified by the Partnership, for any
expense (including attorney fees), loss or damage incurred by reason of any act
or omission performed or omitted in good faith in a manner reasonably
believed by the General Partner or its affiliates to be within the scope of
authority and in the best interest of the Partnership or the Partners unless the
General Partner or its affiliates is guilty of gross negligence or willful
misconduct.  While not totally certain under Oklahoma law, absent specific
provisions in the partnership agreement to the contrary, a general partner of a
limited partnership may be liable to its limited partners if it fails to conduct
the partnership affairs with the same amount of care which ordinarily
prudent persons would use in similar circumstances.  Consequently, the Agreement
may be viewed as requiring a lesser standard of duty and care than what Oklahoma
law might otherwise require of the General Partner.

     Any claim against the Partnership for indemnification must be satisfied
only out of Partnership assets including insurance proceeds, if any, and none of
the Limited Partners will have personal liability therefore.

                                     46

<PAGE>
     The Limited Partners may have more limited rights of action than they would
have absent the liability and indemnification provisions above.  Moreover,
indemnification enforced by the General Partner under such provisions will
reduce the assets of the Partnership.  It should be noted, however, that it is
the position of the Securities and Exchange Commission ("Commission") that any
attempt to limit the liability of a general partner or to indemnify a general
partner under the federal securities laws is contrary to public policy and,
therefore, unenforceable.  The General Partner has been advised of the position
of the Commission.

     Generally, the Limited Partners' remedy for the General Partner's breach of
a fiduciary duty will be to bring a legal action against the General Partner to
recover any damages, generally measured by the benefits earned by the General
Partner as a result of the fiduciary breach.  Additionally, Limited Partners may
also be able to obtain other forms of relief, including injunctive relief.  The
Act provides that a limited partner may bring an action in the name of a limited
partnership (a partnership derivative action) to recover a judgment in its favor
if general partners with authority to do so have refused to bring the action or
if an effort to cause such general partners to bring the action is not likely to
succeed.

                                PRIOR ACTIVITIES

     UNIT has been engaged in oil and gas exploration and development
operations since late 1974 and has conducted oil and gas drilling
programs using the limited partnership format since 1979.  The following table
depicts the drilling results achieved as of September 30, 2001 by UNIT during
each year since 1975.  Because of the unpredictability of oil and gas
exploration in general, such results should not be considered indicative of the
results that may be achieved by the Partnership.

                         Gross Wells(2)                  Net Wells(3)
Year Ended               --------------                  ------------
July 31(1)            Total  Oil   Gas  Dry      Total    Oil     Gas     Dry
----------            -----  ---   ---  ---      -----  -----   -----   -----

1975 Exploratory....      2    0     2    0        .01      0     .01       0
  Development.......      4    0     2    2        .07      0     .03     .04
                      -----  ---   ---  ---      -----  -----   -----   -----
                          6    0     4    2        .08      0     .04     .04
                      -----  ---   ---  ---      -----  -----   -----   -----

1976 Exploratory....      1    0     0    1        .01      0       0     .01
  Development.......      8    0     6    2        .29      0     .28     .01
                      -----  ---   ---  ---      -----  -----   -----   -----
                          9    0     6    3        .30      0     .28     .02
                      -----  ---   ---  ---      -----  -----   -----   -----

1977 Exploratory....      9    0     3    6       1.50      0     .45    1.05
  Development.......     16    0     9    7       2.00      0     .70    1.30
                      -----  ---   ---  ---      -----  -----   -----   -----
                         25    0    12   13       3.50      0    1.15    2.35
                      -----  ---   ---  ---      -----  -----   -----   -----

1978 Exploratory....      8    1     1    6       1.17    .34     .15     .68
  Development.......     26    0    13   13       2.64      0     .76    1.88
                      -----  ---   ---  ---      -----  -----   -----   -----
                         34    1    14   19       3.81    .34     .91    2.56
                      -----  ---   ---  ---      -----  -----   -----   -----

1979 Exploratory....     10    0     5    5       1.40      0     .76     .64
  Development.......     16    1     8    7       1.99    .06     .95     .98
                      -----  ---   ---  ---      -----  -----   -----   -----
                         26    1    13   12       3.39    .06    1.71    1.62
                      -----  ---   ---  ---      -----  -----   -----   -----

1980 Exploratory....      1    0     1    0       1.28      0     .23    1.05
  Development.......     10    0     8    2       3.13      0     .85    2.28
                      -----  ---   ---  ---      -----  -----   -----   -----
                         11    0     9    2       4.41      0    1.08    3.33
                      -----  ---   ---  ---      -----  -----   -----   -----

                                          47

<PAGE>
                         Gross Wells(2)                  Net Wells(3)
Year Ended               --------------                  ------------
December 31(1)        Total  Oil   Gas  Dry      Total    Oil     Gas     Dry
--------------        -----  ---   ---  ---      -----  -----   -----   -----

1981 Exploratory....     14    1     4    9       1.12    .02     .16     .94
  Development.......     66   18    29   19       7.38   2.96    1.77    2.65
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     80   19    33   28       8.50   2.98    1.93    3.59
                      -----  ---   ---  ---      -----  -----   -----   -----

1982 Exploratory....     40    5     9   26       3.39    .60     .32    2.47
  Development.......    100   22    51   27      11.70   4.70    2.71    4.29
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........    140   27    60   53      15.09   5.30    3.03    6.76
                      -----  ---   ---  ---      -----  -----   -----   -----

1983 Exploratory....      6    2     0    4       1.31    .72       0     .59
  Development.......     72   18    26   28       8.01   3.45    1.17    3.39
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     78   20    26   32       9.32   4.17    1.17    3.98
                      -----  ---   ---  ---      -----  -----   -----   -----

1984 Exploratory....      2    1     1    0        .52    .49     .03       0
  Development.......     50   15    22   13       6.81   3.42    2.74     .65
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     52   16    23   13       7.33   3.91    2.77     .65
                      -----  ---   ---  ---      -----  -----   -----   -----

1985 Exploratory....      0    0     0    0          0      0       0       0
  Development.......     38   11    16   11       8.32   2.89    2.39    3.04
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     38   11    16   11       8.32   2.89    2.39    3.04
                      -----  ---   ---  ---      -----  -----   -----   -----

1986 Exploratory....      0    0     0    0          0      0       0       0
  Development.......     21    4     6   11       3.85    .81    1.01    2.03
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     21    4     6   11       3.85    .81    1.01    2.03
                      -----  ---   ---  ---      -----  -----   -----   -----

1987 Exploratory....      0    0     0    0          0      0       0       0
  Development.......     46   23    10   13      11.91   7.95    1.76    2.34
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     46   23    10   13      11.91   7.95    1.76    2.34
                      -----  ---   ---  ---      -----  -----   -----   -----

1988 Exploratory....      0    0     0    0          0      0       0       0
  Development.......     39   20    10    9      22.56  14.77    4.05    3.74
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     39   20    10    9      22.56  14.77    4.05    3.74
                      -----  ---   ---  ---      -----  -----   -----   -----

1989 Exploratory....      3    0     1    2       1.97      0     .47    1.50
  Development.......     40   12    15   13      18.83   8.81    4.13    5.89
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     43   12    16   15      20.80   8.81    4.60    7.39
                      -----  ---   ---  ---      -----  -----   -----   -----

1990 Exploratory....      5    0     2    3       1.22      0     .12    1.10
  Development.......     35   11    14   10      16.53   8.38    3.52    4.63
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     40   11    16   13      17.75   8.38    3.64    5.73
                      -----  ---   ---  ---      -----  -----   -----   -----

1991 Exploratory....      4    0     0    4        .82      0       0     .82
  Development.......     28   10     9    9      15.88   8.61    3.91    3.36
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     32   10     9   13      16.70   8.61    3.91    4.18
                      -----  ---   ---  ---      -----  -----   -----   -----

1992 Exploratory....      0    0     0    0          0      0       0       0
  Development.......     18    1    11    6       5.81   1.00    3.33    1.48
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     18    1    11    6       5.81   1.00    3.33    1.48
                      -----  ---   ---  ---      -----  -----   -----   -----

1993 Exploratory....      1    0     0    1        .10      0       0     .10
  Development.......     16    9     6    1      12.48   8.98    3.32     .18
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     17    9     6    2      12.58   8.98    3.32     .28
                      -----  ---   ---  ---      -----  -----   -----   -----

1994 Exploratory....      3    0     1    2       1.71      0     .95     .76
  Development.......     57    5    40   12      25.79   4.75   14.14    6.90
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     60    5    41   14      27.50   4.75   15.09    7.66
                      -----  ---   ---  ---      -----  -----   -----   -----

                                     48

<PAGE>
                         Gross Wells(2)                  Net Wells(3)
Year Ended               --------------                  ------------
December 31(1)        Total  Oil   Gas  Dry      Total    Oil     Gas     Dry
--------------        -----  ---   ---  ---      -----  -----   -----   -----

1995 Exploratory....      0    0     0    0          0      0       0       0
  Development.......     45   15    24    6      14.94   4.67    8.04    2.23
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     45   15    24    6      14.94   4.67    8.04    2.23
                      -----  ---   ---  ---      -----  -----   -----   -----

1996 Exploratory....      0    0     0    0          0      0       0       0
  Development.......     70   10    51    9      32.09   7.61   20.09    4.39
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     70   10    51    9      32.09   7.61   20.09    4.39
                      -----  ---   ---  ---      -----  -----   -----   -----

1997 Exploratory....      2    0     0    2       2.00      0       0    2.00
  Development.......     80    8    58   14      35.94   4.35   23.29    8.30
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     82    8    58   16      37.94   4.35   23.29   10.30
                      -----  ---   ---  ---      -----  -----   -----   -----

1998 Exploratory....      2    0     1    1        .63      0    .375     .26
  Development.......     76    3    52   21      30.17    .31  18.750   11.11
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     78    3    53   22      30.80    .31  19.125   11.37
                      -----  ---   ---  ---      -----  -----   -----   -----

1999 Exploratory....      0    0     0    0          0      0       0       0
  Development.......     51    1    42    8      21.80    .40   17.40     4.0
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     51    1    42    8      21.80    .40   17.40     4.0
                      -----  ---   ---  ---      -----  -----   -----   -----

2000 Exploratory....      2    0     2    0       1.72      0    1.72       0
  Development.......     98    7    73   18      38.37   1.45   28.55    8.37
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........    100    7    75   18      40.09   1.45   30.27    8.37
                      -----  ---   ---  ---      -----  -----   -----   -----

Period of January 1,
2001 to
September 30, 2001

  Exploratory.......      2    0     1    1       1.47      0     .50     .97
  Development.......     90    1    71   18      35.13    .79   23.23   11.11
                      -----  ---   ---  ---      -----  -----   -----   -----
     Total..........     92    1    72   19      36.60    .79   23.73   12.08
                      -----  ---   ---  ---      -----  -----   -----   -----

_______________
     (1)  Except as indicated, the figures used in this table relate to wells
drilled and completed during each of the 12 month periods ended July 31 or
December 31, as the case may be.  Oil wells and gas wells shown include both
producing wells and wells capable of production.

     (2)  "Gross Wells" refers to the total number of wells in which there was
participation by UNIT.

     (3)  "Net Wells" refers to the aggregate leasehold working interest of UNIT
in such wells.  For example, a 50% leasehold working interest in a well drilled
represents 1.0 Gross Well, but a .50 Net Well.

Prior Employee Programs

     During the period of 1979 to 1983, persons who were designated key
employees of UNIT by its board of directors participated in the Unit Key
Employee Exploration Funds (the "Funds").  These Funds were formed as general
partnerships for the purpose of participating in 10% of all of the exploration
and development operations conducted by UNIT during a specified period.  Except
for the Fund formed in 1983, each of the prior Funds served as one of the
general partners in at least one of the prior drilling programs sponsored by
UNIT and was allocated 10% of the expenses and revenues

                                     49

<PAGE>
allocable to the general partners as a group.  In each of these Funds the costs
charged to it in connection with its operations were financed with the proceeds
of bank borrowings and out of the Funds' share of revenues.

     The 1983 Fund served as the sole capital limited partner in the Unit 1983-A
Oil and Gas Program and as such made no contribution to the capital of that
program and shared in 10% of the costs and revenues otherwise allocable to the
General Partner after the distributions to the General Partner from the program
equaled the amount of its contributions thereto plus UNIT's interest costs with
respect to the unrecovered amount of its contributions.

     Because of the differences in structure, format and plan of operations
between the prior Funds and the Partnership and because of the uncertainties
which are inherent in oil and gas operations generally, the results achieved by
the prior Funds should not be considered indicative of the results the
Partnership may achieve.

     For each year from 1984 through 2001, a separate Employee Program was
formed as an Oklahoma limited partnership with UNIT or UPC as its sole general
partner (UPC now serves as the sole general partner of each of these Employee
Programs) and with eligible employees and directors of UNIT and its subsidiaries
who subscribed for units therein as the limited partners.  Each Employee Program
participated on a proportionate basis (to the extent of 10% of the General
Partner's interest in each case except for the 1986 and 1987 Employee Programs,
in which case the percentage participation was 15% and the 1992 - 2001 Employee
Programs, in which case the percentage was 5% and the 2001 Employee Program in
which case the percentage was 2 1/2%) in all of UNIT's oil and gas exploration
and development operations conducted during the calendar year for which the
program was formed beginning with its date of formation if it was formed after
January 1.  Although the terms and provisions of these Employee Programs are
virtually identical to those of the Partnership, because of the unpredictability
of oil and gas exploration and development in general, the results for the
Employee Programs shown below should not be considered indicative of the results
that may be achieved by the Partnership.

     The Funds and the Employee Programs have participated in either 10% or 5%
(15% in the case of the 1986 and 1987 Employee Programs and 2 1/2% in the case
of the 2001 Employee Program) of virtually all of UNIT's or the General
Partner's exploration and development operations conducted since the latter half
of 1979.  Thus, the drilling results of these partnerships would be
proportionate to those drilling results of UNIT for the periods beginning after
the fiscal year ended July 31, 1979 shown above.

Results of the Prior Oil and Gas Programs

     In each of the General Partner's prior oil and gas programs other than the
Unit 1983-A Oil and Gas Program and the Unit 1984 Oil and Gas Limited
Partnership, one of the prior Funds also served as a general partner.  The 1983
Fund served as the sole capital limited partner of the Unit 1983-A Oil and Gas
Program and the 1984 Employee Program serves as a general partner of the Unit
1984 Oil and Gas Limited Partnership.  The Unit 1979 Oil and Gas Program was the
first limited partnership drilling program of which UNIT was a sponsor.  The
revenue sharing terms of the 1979 Program are generally 70% to the limited
partners and 30% to the general partners until 150% program payout at which time
the revenues are to be shared 55% to the limited partners and 45% to the general
partners.  The revenue sharing terms of the Unit 1980 Oil and Gas Program were
generally 60% to the limited partners and 40% to the general partners.  The
revenue sharing terms of the Unit 1981 Oil and Gas Program were generally 70% to
the limited partners and 30% to the general partners until program payout and
50% to

                                     50

<PAGE>
the limited partners and 50% to the general partners thereafter.  The revenue
sharing terms of the Unit 1981-II Oil and Gas Program, the Unit 1982-A Oil and
Gas Program and the Unit 1982-B Oil and Gas Program (60% to the limited partners
and 40% to the general partners) were substantially the same as those of the
Unit 1983-A Oil and Gas Program and the Unit 1984 Oil and Gas Limited
Partnership (65% to the limited partners and 35% to the general partner) except
that the general partners' cost percentage and the general partners' revenue
share in each of those prior programs could not be less than 25%.  The
following tables depict the drilling results at September 30, 2001, and the
economic results at September 30, 2001 of prior oil and gas programs and the
1984 - 2001 Employee Programs.  On September 12, 1986, in connection with a
major restructuring and recapitalization, UNIT acquired all of the assets
and liabilities of the programs formed during 1980 through 1983 and these
programs have now been dissolved.  Effective December 31, 1993, pursuant to an
Agreement and Plan of Merger, dated as of December 28, 1993, all of the assets
and all of the liabilities of the 1984, 1985, 1986, 1987, 1988, 1989 and 1990
Employee Programs were merged with and consolidated into a new Employee Program
called the Unit Consolidated Employee Oil and Gas Limited Partnership, an
Oklahoma Limited Partnership which was formed November 30, 1993 (the
"Consolidated Program").  The Consolidated Program holds no assets other than
those acquired in the merger with the 1984 through 1990 Employee Programs.
The Unit 1979 Oil and Gas Program continues in existence as do the 1991, 1992,
1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000 and 2001 Employee Programs.
Certain of these programs have not completed all of their drilling and
development operations.  Moreover, because of the unpredictability of oil and
gas exploration and development in general, the results shown below should not
be considered indicative of the results that may be achieved by the Partnership.

                                 DRILLING RESULTS

                             As of September 30, 2001

                             Gross Wells                      Net Wells
                           ---------------                  ------------
Programs                Total  Oil   Gas  Dry      Total    Oil     Gas     Dry
--------                -----  ---   ---  ---      -----  -----   -----   -----

1979       Exploratory
             Wells....      6    0     2    4       2.43   0.00    0.65    1.78
           Development
             Wells....     21   16     1    4      17.28  14.14    0.03    3.11
                        -----  ---   ---  ---      -----  -----   -----   -----
           Total......     27   16     3    8      19.71  14.14    0.68    4.89
                        -----  ---   ---  ---      -----  -----   -----   -----

1980(1)    Exploratory
             Wells....     15    2     5    8       5.65   0.50    2.14    3.01
           Development
             Wells....     32    5    15   12      12.77   1.17    5.75    5.85
                        -----  ---   ---  ---      -----  -----   -----   -----
           Total......     47    7    20   20      18.42   1.67    7.89    8.86
                        -----  ---   ---  ---      -----  -----   -----   -----

1981(1)    Exploratory
             Wells....     11    1     4    6       4.61   0.33    0.88    3.40
           Development
             Wells....     67   14    34   19      21.77   5.03    6.61   10.13
                        -----  ---   ---  ---      -----  -----   -----   -----
           Total......     78   15    38   25      26.38   5.36    7.49   13.53
                        -----  ---   ---  ---      -----  -----   -----   -----

1981-II(1) Exploratory
             Wells....     13    1     5    7       5.21   0.25    1.12    3.84
           Development
             Wells....     45    3    29   13       9.07   0.69    4.78    3.60
                        -----  ---   ---  ---      -----  -----   -----   -----
           Total......     58    4    34   20      14.28   0.94    5.90    7.44
                        -----  ---   ---  ---      -----  -----   -----   -----

1982-A(1)  Exploratory
             Wells....     11    3     1    7       3.55   0.78    0.00    2.77
           Development
             Wells....     69   23    22   24      25.22  13.09    3.59    8.54
                        -----  ---   ---  ---      -----  -----   -----   -----
           Total......     80   26    23   31      28.77  13.87    3.59   11.31
                        -----  ---   ---  ---      -----  -----   -----   -----

1982-B(1)  Exploratory
             Wells....      4    1     1    2       2.28   0.80    0.08    1.40
           Development
             Wells....     41   16     9   16      18.60   9.47    1.01    8.12
                        -----  ---   ---  ---      -----  -----   -----   -----
           Total......     45   17    10   18      20.88  10.27    1.09    9.52
                        -----  ---   ---  ---      -----  -----   -----   -----

                                     51

<PAGE>
                             Gross Wells                      Net Wells
                           ---------------                  ------------
Programs                Total  Oil   Gas  Dry      Total    Oil     Gas     Dry
--------                -----  ---   ---  ---      -----  -----   -----   -----

1983-A(1)  Exploratory
             Wells....      1    1     0    0       1.00   1.00    0.00    0.00
           Development
             Wells....     26   14    10    2       6.60   4.39    1.27    0.94
                        -----  ---   ---  ---      -----  -----   -----   -----
           Total......     27   15    10    2       7.60   5.39    1.27    0.94
                        -----  ---   ---  ---      -----  -----   -----   -----

1984       Exploratory
             Wells....      0    0     0    0       0.00   0.00    0.00    0.00
           Development
             Wells....     21    1    10   10       5.89    .38    3.08    2.43
                        -----  ---   ---  ---      -----  -----   -----   -----
           Total......     21    1    10   10       5.89    .38    3.08    2.43
                        -----  ---   ---  ---      -----  -----   -----   -----
_______________
     (1)  On September 12, 1986, Unit acquired all of the assets and liabilities
of this Program and the Program has been dissolved.

                                     52
<PAGE>
                           EMPLOYEE PROGRAMS
                           -----------------
                       As of September 30, 2001

                             Gross Wells                      Net Wells
                           ---------------                  ------------
Programs                Total  Oil   Gas  Dry      Total    Oil     Gas     Dry
--------                -----  ---   ---  ---      -----  -----   -----   -----

1984(1) Exploratory
Empl.     Wells....         0    0     0    0       0.00   0.00    0.00    0.00
        Development
          Wells....        25    4    12    9        .14    .02     .06     .06
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        25    4    12    9        .14    .02     .06     .06
                        -----  ---   ---  ---      -----  -----   -----   -----
1985(1) Exploratory
Empl.     Wells....         0    0     0    0      0.00    0.00    0.00    0.00
        Development
          Wells....        30    8    10   12       .38     .12     .08     .18
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        30    8    10   12       .38     .12     .08     .18
                        -----  ---   ---  ---      -----  -----   -----   -----

1986(1) Exploratory
Empl.     Wells....         0    0     0    0      0.00    0.00    0.00    0.00
        Development
          Wells....        18    6     8    4       .48     .12     .30     .06
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        18    6     8    4       .48     .12     .30     .06
                        -----  ---   ---  ---      -----  -----   -----   -----

1987(1) Exploratory
Empl.     Wells....         0    0     0    0      0.00    0.00    0.00    0.00
        Development
          Wells....        21   12     5    4      1.17     .74     .25     .18
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        21   12     5    4      1.17     .74     .25     .18
                        -----  ---   ---  ---      -----  -----   -----   -----

1988(1) Exploratory
Empl.     Wells....         0    0     0    0      0.00    0.00    0.00    0.00
        Development
          Wells....        29   15     9    5      1.55    1.03     .28     .24
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        29   15     9    5      1.55    1.03     .28     .24
                        -----  ---   ---  ---      -----  -----   -----   -----

1989(1) Exploratory
Empl.     Wells....         0    0     0    0      0.00    0.00    0.00    0.00
        Development
          Wells....        32    7    14   11      1.48     .59     .36     .53
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        32    7    14   11      1.48     .59     .36     .53
                        -----  ---   ---  ---      -----  -----   -----   -----

1990(1) Exploratory
Empl.     Wells....         5    0     2    3      .122    0.00     .01     .11
        Development
          Wells....        34   11    14    9      1.65     .83     .35     .46
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total              39   11    16   12      1.78     .83     .36     .57
                        -----  ---   ---  ---      -----  -----   -----   -----

1991    Exploratory
Empl.     Wells....         4    0     0    4       .08    0.00    0.00     .08
        Development
          Wells....        28   10     9    9      1.59     .86     .39     .34
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        32   10     9   13      1.67     .86     .39     .42
                        -----  ---   ---  ---      -----  -----   -----   -----

1992    Exploratory
Empl.     Wells....         0    0     0    0      0.00    0.00    0.00    0.00
        Development
          Wells....        18    1    11    6       .29     .05     .17     .07
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        18    1    11    6       .29     .05     .17     .07
                        -----  ---   ---  ---      -----  -----   -----   -----

1993    Exploratory
Empl.     Wells....         0    0     0    0      0.00    0.00    0.00    0.00
        Development
          Wells....        16    9     6    1       .63     .45     .17     .01
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        16    9     6    1       .63     .45     .17     .01
                        -----  ---   ---  ---      -----  -----   -----   -----

1994    Exploratory
Empl.     Wells....         3    0     1    2       .09    0.00     .05     .04
        Development
          Wells....        57    5    40   12      1.29     .24     .70     .35
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        60    5    41   14      1.38     .24     .75     .39
                        -----  ---   ---  ---      -----  -----   -----   -----

1995    Exploratory
Empl.     Wells....         0    0     0    0      0.00    0.00    0.00    0.00
        Development
          Wells....        45   15    24    6       .74     .23     .40     .11
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        45   15    24    6       .74     .23     .40     .11
                        -----  ---   ---  ---      -----  -----   -----   -----

1996    Exploratory
Empl.     Wells....         0    0     0    0      0.00    0.00    0.00    0.00
        Development
          Wells....        53    7    38    8      1.24     .27     .76     .21
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        53    7    38    8      1.24     .27     .76     .21
                        -----  ---   ---  ---      -----  -----   -----   -----

                                     53

<PAGE>
                             Gross Wells                      Net Wells
                           ---------------                  ------------
Programs                Total  Oil   Gas  Dry      Total    Oil     Gas     Dry
--------                -----  ---   ---  ---      -----  -----   -----   -----

1997    Exploratory
Empl.     Wells....         2    0     0    2       .10    0.00    0.00     .10
        Development
          Wells....        80    8    58   14      1.80     .22    1.16     .42
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        82    8    58   16      1.90     .22    1.16     .52
                        -----  ---   ---  ---      -----  -----   -----   -----

1998    Exploratory
Empl.     Wells             2    0     1    1       .03    0.00     .02     .01
        Development
          Wells....        76    3    52   21      1.51     .02     .94     .56
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        78    3    53   22      1.54     .02     .96     .57
                        -----  ---   ---  ---      -----  -----   -----   -----

1999    Exploratory
Empl.     Wells             0    0     0    0      0.00    0.00    0.00    0.00
        Development
          Wells....        51    1    42    8      1.09     .02     .87     .20
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        51    1    42    8      1.09     .02     .87     .20
                        -----  ---   ---  ---      -----  -----   -----   -----

2000    Exploratory
Empl.     Wells....         2    0     2    0       .09    0.00     .09    0.00
        Development
          Wells....        98    7    73   18      1.92     .07    1.43     .42
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......       100    7    75   18      2.01     .07    1.52     .42
                        -----  ---   ---  ---      -----  -----   -----   -----

2001    Exploratory
Empl.     Wells....         2    0     1    1       .04    0.00     .01     .02
        Development
          Wells....        90    1    71   18       .88     .02     .59     .28
                        -----  ---   ---  ---      -----  -----   -----   -----
        Total......        92    1    72   19       .92     .02     .60     .30
                        -----  ---   ---  ---      -----  -----   -----   -----
_______________
     (1)  Effective December 31, 1993 this Program was merged with and
into the Consolidated Program.

                                     54

<PAGE>
                     GENERAL PARTNERS' PAYOUT TABLE(1)
                          As of September 30, 2001

                                                       Total Revenues
                                                            Before
                                              Total      Deducting
                                 Total       Revenues  Operating Costs
                              Expenditures    Before     for 3 Months
                               Including    Deducting       Ended
                               Operating    Operating   September 30,
Program                         Costs(2)      Costs         2001
-------                         --------      -----         ----
1979......................... $11,236,726  $10,593,870     $40,720
1980.........................   4,043,599    4,044,424          -
1981.........................   8,325,594    6,338,173          -
1981-II......................   6,642,875    3,995,616          -
1982-A.......................   9,190,842    6,782,893          -
1982-B.......................   4,213,710    3,126,326          -
1983-A.......................   2,277,514    1,312,531          -
1984.........................   2,950,593    2,057,599      20,049
1984 Employee(*).............       1,542        1,745          -
1985 Employee(*).............       2,820        1,808          -
1986 Energy Income Fund(**)..   1,723,049    1,689,858      14,007
1986 Employee(*).............       4,403        6,813          -
1987 Employee(*).............     624,354      815,358          -
1988 Employee(*).............   1,196,564    1,588,132          -
1989 Employee(*).............   1,424,525    1,171,961          -
1990 Employee(*).............     653,563      525,572          -
1991 Employee................   3,067,321    2,804,091      48,692
1992 Employee................     337,418      369,083       6,685
1993 Employee................     714,054      681,918       8,934
Consolidated Program.........      26,134       13,989         352
1994 Employee................   2,167,707    1,691,314      36,079
1995 Employee................     792,118      548,625      10,948
1996 Employee................   1,618,379      803,029      14,007
1997 Employee................   2,201,345    1,034,483      29,423
1998 Employee................   1,994,080      887,172      43,154
1999 Employee................   1,297,447    1,065,278      70,727
2000 Employee................   2,876,082    1,354,454     141,176
2001 Employee................     418,105      155,989      32,179
_______________
(*)  Effective December 31, 1993, this program was merged with and
into the Consolidated Program.

(**) Formed primarily for purposes of acquiring producing oil and gas
properties.

                                     55

<PAGE>
                      LIMITED PARTNERS' PAYOUT TABLE(1)

                          As of September 30, 2001

                                                       Total Revenues
                                                            Before
                                              Total      Deducting
                                 Total       Revenues  Operating Costs
                              Expenditures    Before     for 3 Months
                               Including    Deducting       Ended
                               Operating    Operating   September 30,
Program                         Costs(2)      Costs         2001
-------                         --------      -----         ----
1979........................  $18,974,727  $18,529,680     $49,769
1980........................   17,688,367    6,949,008          -
1981........................   37,073,946   15,768,826          -
1981-II.....................   18,638,600    7,028,946          -
1982-A......................   24,866,078   12,708,949          -
1982-B......................   12,069,566    5,367,312          -
1983-A......................    3,770,856    1,922,177          -
1984........................    3,938,163    2,152,201      20,049
1984 Employee(*)............      120,942      171,540          -
1985 Employee(*)............      277,901      178,984          -
1986 Energy Income
Fund(**)....................    3,507,329    3,655,170      21,011
1986 Employee(*)............      435,858      676,972          -
1987 Employee(*)............      341,846      469,830          -
1988 Employee(*)............      333,898      446,044          -
1989 Employee(*)............      179,593      175,331          -
1990 Employee(*)............      300,852      188,848          -
1991 Employee...............      814,147      747,613      12,944
1992 Employee...............      860,330      953,159      17,191
1993 Employee...............      678,047      631,653       8,246
Consolidated Program........      572,900    1,385,800      34,823
1994 Employee...............      876,555      692,925      14,689
1995 Employee...............    1,254,859      863,492      17,124
1996 Employee...............    1,000,757      494,020       8,585
1997 Employee...............      948,837      465,803      13,221
1998 Employee...............    1,042,167      450,268      22,207
1999 Employee...............      445,042      318,200      21,126
2000 Employee...............      432,929      184,822      19,251
2001 Employee...............      278,737      103,992      21,452
_______________
(*)  Effective December 31, 1993, this program was merged with and
into the Consolidated Program.

(**) Formed primarily for purposes of acquiring producing oil and gas
properties.

                                     56

<PAGE>
                    GENERAL PARTNERS' NET CASH TABLE(1)

                          As of September 30, 2001

                                             Total
                                           Revenues               Total
                                             Less               Revenues
                                           Operating          Distributed
                       Total       Total   Costs for             for 3
                    Expenditures Revenues  3 Months              Months
                        Less       Less      Ended     Total      Ended
                     Operating   Operating Sept. 30,  Revenues  Sept. 30,
Program              Costs(2)      Costs     2001    Distributed  2001
-------              --------      -----     ----    -----------  ----
1979.............   $5,510,369  $4,867,513 $  3,064  $3,943,739  $21,900
1980.............    2,628,978   2,629,803      -     2,635,751      -
1981.............    6,546,160   4,558,739      -     5,368,272      -
1981-II..........    4,817,145   2,169,886      -     2,609,000      -
1982-A...........    6,297,972   3,890,023      -     3,755,000      -
1982-B...........    2,565,504   1,478,120      -     1,158,000      -
1983-A...........    1,380,331     415,348      -       819,000      -
1984.............    1,472,124     579,129    4,052     917,299   19,825
1984 Employee(*).          874       1,077      -         1,000      -
1985 Employee(*).        2,300       1,288      -         1,035      -
1986 Energy
Income Fund(**)..      331,395     298,204   (2,424)    466,265    8,825
1986 Employee(*).        2,698       5,108      -         4,486      -
1987 Employee(*).      357,368     548,372      -       465,800      -
1988 Employee(*).      770,272   1,161,840      -       942,800      -
1989 Employee(*).    1,010,133     752,569      -       607,900      -
1990 Employee(*).      466,272     338,281      -       266,600      -
1991 Employee....    1,896,174   1,632,945   27,855   1,506,410   56,350
1992 Employee....      199,633     231,299    3,744     216,045    9,800
1993 Employee....      542,928     510,792    5,165     453,095    9,785
Consolidated
Program..........       20,584       8,438      221       8,297      550
1994 Employee....    1,658,386   1,181,994   22,248     997,425   38,850
1995 Employee....      654,608     411,115    6,018     322,995   11,925
1996 Employee....    1,430,737     615,387    8,357     419,455   18,350
1997 Employee....    1,988,539     821,676   18,456     612,040   40,400
1998 Employee....    1,796,851     689,942   29,792     512,250   55,050
1999 Employee....    1,130,015     897,845   55,633     583,650   92,525
2000 Employee....    2,678,039   1,156,411  110,852     398,300  185,800
2001 Employee....      405,842     143,725   30,751         -        -
_______________
(*)  Effective December 31, 1993, this program was merged with and into the
Consolidated Program.

(**) Formed primarily for purposes of acquiring producing oil and gas
properties.

                                     57

                     LIMITED PARTNERS' NET CASH TABLE(1)

                           As of September 30, 2001

                                                Total
                                               Revenues
                                                 Less               Total
                                              Operating            Revenues
                                              Costs for          Distributed
                           Total       Total   3 Months              for 3
                       Expenditures  Revenues    Ended              Months
                           Less         Less     Sept.   Total       Ended
            Capital      Operating   Operating    30,   Revenues   Sept. 30,
Program   Contributed    Costs(2)      Costs     2001  Distributed   2001
-------   -----------    --------      -----     ----  -----------   ----

1979....  $3,000,000    $10,635,066 $10,190,018  $3,707 $6,191,121 $32,160 (5)
1980....  12,000,000 (3) 14,469,265   3,729,906       -    760,000       -
1981....  29,255,000 (4) 32,700,741  11,395,621       -  5,335,065       -
1981-II.  15,000,000     16,603,760   4,994,106       -  1,710,001       -
1982-A..  21,140,000     21,591,442   9,434,313       -  6,342,000       -
1982-B..  10,555,000      9,935,850   3,233,596       -  2,828,740       -
1983-A..   2,530,000      2,993,705   1,145,026       -    227,700       -
1984....   1,875,000      3,012,905   1,226,944   8,422    844,241  25,830 (6)
1984
Employee(*)  174,000         86,664     137,262       -    125,280       -
1985
Employee(*)  283,500        227,670     128,753       -    182,644       -
1986 Energy
Income
Fund(**).  1,000,000      1,841,209   1,989,050  (3,644) 1,870,800  11,800 (7)
1986
Employee(*)  229,750        267,008     508,122       -    460,007       -
1987
Employee(*)  209,000        207,060     335,044       -    324,845       -
1988
Employee(*)  177,000        214,712     326,858       -    281,630       -
1989
Employee(*)  157,000        157,306     153,044       -    147,737       -
1990
Employee(*)  253,000        254,483     142,479       -    180,895       -
1991
Employee.    263,000        502,638     436,104   7,383    406,335  17,095 (8)
1992
Employee.    240,000        505,330     598,159   9,599    582,248  26,400 (9)
1993
Employee.    245,000        519,939     473,545   4,758    439,530   9,065 (10)
Consolidated       -         46,743     859,643  21,561    876,146  43,516 (11)
1994
Employee.    284,000        667,986     484,356   9,015    397,884  18,460 (12)
1995
Employee.    454,000        999,728     608,361   9,383    524,854  21,338 (13)
1996
Employee.    437,000        892,707     385,970   5,105    361,835  12,236 (14)
1997
Employee.    413,000        852,450     369,415   8,266    308,924  21,889 (15)
1998
Employee.    471,000        947,016     355,117  15,285    330,624  34,383 (16)
1999
Employee.    141,000        393,692     266,850  16,582    229,172  31,208 (17)
2000
Employee.    199,000        404,839     156,732  15,088    116,415  29,253 (18)
2001
Employee.    370,000        270,561      95,816  20,500          -       -

 _______________
 (*)  Effective December 31, 1993, this program was merged with and into
 the Consolidated Program.

 (**) Formed primarily for purposes of acquiring producing oil and gas
 properties.

      (1)  Amounts reflect the accrual method of accounting.

      (2)  Does not include expenditures of $237,600, $920,453, $2,252,900,
 $1,480,248, $2,079,268, $985,371 and $241,076 which were obtained from bank
 borrowings and used to pay the limited partners' share of sales commissions of
 $237,600, $722,453, $1,940,400, $1,183,248, $1,656,468, $827,046 and $190,476
 and organization costs of $--0--, $198,000, $312,500, $297,000,

                                     58

<PAGE>
 $422,800, $158,325 and $50,600 for the 1979, 1980, 1981, 1981-II, 1982-A, 1982-
  B and 1983-A Programs, respectively.

      (3)  Includes original subscriptions of limited partners totaling
$10,000,000 and additional assessments totaling $2,000,000.

      (4)  Includes original subscriptions of limited partners totaling
 $25,000,000 and additional assessments totaling $4,255,000.

      (5)  In November 2001 the 1979 Program made a distribution of
 $$7,680.00 to that program's limited partners.

      (6)  In November 2001 the 1984 Program made a distribution of
 $22,050.00 to that program's limited partners.

      (7)  In November 2001 the 1986 Program made a distribution of
 $7,200.00 to that program's limited partners.

      (8)  In November 2001 the 1991 Employee Program made a distribution of
 $8,942.00 to that program's limited partners.

      (9)  In November 2001 the 1992 Employee Program made a distribution of
 $13,440.00 to that program's limited partners.

      (10) In November 2001 the 1993 Employee Program made a distribution of
 $5,635.00 to that program's limited partners.

      (11) In November 2001 the Consolidated Program made a distribution of
 $23,094.00 to that program's limited partners.

      (12) In November 2001 the 1994 Employee Program made a distribution of
 $11,928.00 to that program's limited partners.

      (13) In November 2001 the 1995 Employee Program made a distribution of
 $13,620.00 to that program's limited partners.

      (14) In November 2001 the 1996 Employee Program made a distribution of
 $6,118.00 to that program's limited partners.

      (15) In November 2001 the 1997 Employee Program made a distribution of
 $11,151.00 to that program's limited partners.

      (16) In November 2001 the 1998 Employee Program made a distribution of
 $17,427.00 to that program's limited partners.

      (17) In November 2001 the 1999 Employee Program made a distribution of
 $19,364.00 to that program's limited partners.

                                     59

<PAGE>
      (18) In November 2001 the 2000 Employee Program made a distribution of
 $17,313.00 to that program's limited partners.

                     FEDERAL INCOME TAX CONSIDERATIONS

      The full tax opinion of Conner & Winters is attached to this Memorandum as
Exhibit B.  All prospective investors should review Exhibit B in its entirety
before investing in the Partnership.  All references in this "Federal Income Tax
Considerations" section to the opinion of Conner & Winters are to the tax
opinion set forth in Exhibit B.

      The following is a summary of the opinions of Conner & Winters which
represent Conner & Winter's opinions on all material federal income tax
consequences to the Partnership and to the Limited Partners.  There may be
aspects of a particular investor's tax situation which are not addressed in the
following discussion or in Exhibit B.  Additionally, the resolution of certain
tax issues depends upon future facts and circumstances not known to Conner &
Winters as of the date of this Memorandum; thus, no assurance as to the final
resolution of such issues should be drawn from the following discussion.

      The following statements are based upon the provisions of the Code,
existing and proposed regulations promulgated under the Code ("Regulations"),
current administrative rulings, and court decisions.  It is possible that
legislative or administrative changes or future court decisions may
significantly modify the statements and opinions expressed herein.  Such
changes could be retroactive with respect to the transactions occurring prior to
the date of such changes.

      Moreover, uncertainty exists concerning some of the federal income tax
aspects of the transactions being undertaken by the Partnership.  Some of
the tax positions being taken by the Partnership may be challenged by the
Service and any such challenge could be successful.  Thus, there can be no
assurance that all of the anticipated tax benefits of an investment in the
Partnership will be realized.

      Conner & Winter's opinion is based upon the transactions described in this
Memorandum (the "Transaction") and upon facts as they have been represented to
Conner & Winters or determined by it as of the date of the opinion.  Any
alteration of the facts may adversely affect the opinions rendered.  It is
possible, however, that a variation of such facts could result in some of the
tax benefits will be being eliminated or deferred to future years.

      Because of the factual nature of the inquiry, and in certain cases the
lack of clear authority in the law, it is not possible to reach a judgment as to
the outcome on the merits (either favorable or unfavorable) of certain material
federal income tax issues as described more fully herein.

Summary of Conclusions

      Opinions expressed: The following is a summary of the specific opinions
expressed by Conner & Winters with respect to Federal Income Tax Considerations
discussed herein.

      TO BE FULLY UNDERSTOOD, THE COMPLETE DISCUSSION OF THESE MATTERS SET FORTH
IN THE FULL TAX OPINION IN EXHIBIT B SHOULD BE READ BY EACH PROSPECTIVE LIMITED
PARTNER.

                                     60

<PAGE>
      1.   The material federal income tax benefits in the aggregate from an
investment in the Partnership will be realized.

      2.   The Partnership will be treated as a partnership for federal income
tax purposes and not as a corporation, an association taxable as a corporation
or a "publicly traded partnership".  See "Partnership Status";" "Federal
Taxation of Partnerships".

      3.   To the extent the Partnership's wells are timely drilled and its
drilling costs are timely paid, the Partners will be entitled to their pro
rata shares of the Partnership's IDC paid in 2002.  See "Intangible Drilling and
Development Costs Deductions".

      4.   Most Limited Partners' Units will be considered as ownership
interests in a passive activity within the meaning of Code Section 469 and
losses generated therefrom will be limited by the passive activity provisions of
the Code.  See "Passive Loss and Credit Limitations".

      5.   To the extent provided herein, the Partners' distributive shares of
Partnership tax items will be determined and allocated substantially in
accordance with the terms of the Partnership Agreement.  See "Partnership
Allocations".

      6.   The Partnership will not be required to register with the Service as
a tax shelter.  See "Registration as a Tax Shelter".

      No opinion expressed:  Due to the lack of authority regarding, or the
essentially factual nature of, the issue, Conner & Winters expresses no opinion
as to:

      1.   The impact of an investment in the Partnership on an investor's
alternative minimum tax liability, due to the factual nature of the issue.
(See "Alternative Minimum Tax");

      2.   Whether, under Code Section 183, the losses of the Partnership will
be treated as derived from "activities not engaged in for profit"," and
therefore nondeductible from other gross income, due to the inherently factual
nature of a Partner's interest and motive in engaging in the Transaction.  (See
"Profit Motive");

      3.   Whether each Partner will be entitled to percentage depletion since
such a determination is dependent upon the status of the Partner as an
independent producer and on the Partner's other oil and gas production; due to
the inherently factual nature of such a determination, Conner & Winters  is
unable to render an opinion as to the availability of percentage depletion (See
"Depletion Deductions");

      4.   Whether any interest incurred by a Partner with respect to any
borrowings to acquire a Unit will be deductible or subject to limitations on
deductibility, due to the factual nature of the issue; and

      5.   Whether the Partnership will be treated as the tax owner of
Partnership Properties acquired by the General Partner as nominee for the
Partnership.

      General Information:  Certain matters contained herein are not considered
to address a material tax consequence and are for general information, including
the matters contained in sections dealing with gain or loss on the sale of Units
or of Property, Partnership distributions, tax audits, penalties, and state,
local, and self-employment tax.  See "General Tax Effects of Partnership
Structure", "Gain or Loss

                                     61

<PAGE>
on Sale of Properties or Units", "Partnership Distributions", "Administrative
Matters", "Accounting Methods and Periods", and "State and Local
Tax".

      Facts and Representations:  The opinions of Conner & Winters are also
based upon the facts described in this Memorandum and upon certain
representations made to it by the General Partner, including the following:

      1.   The Partnership Agreement to be entered into by and among the General
Partner and Limited Partners and any amendments thereto will be duly executed
and will be made available to any Limited Partner upon written request.  The
Partnership Agreement will be duly recorded in all places required under the
Oklahoma Revised Uniform Limited Partnership Act (the "Act") for the due
formation of the Partnership and for the continuation thereof in accordance with
the terms of the Partnership Agreement.  The Partnership will at all times be
operated in accordance with the terms of the Partnership Agreement, the
Memorandum, and the Act.

      2.   No election will be made by the Partnership, Limited Partners, or
General Partner to be excluded from the application of the provisions of
Subchapter K of the Code.

      3.   The Partnership will own operating mineral interests, as defined in
the Code and in the Regulations, and none of the Partnership's revenues will be
from non-working interests.

      4.   The General Partner will cause the Partnership to properly elect to
deduct currently all IDC.

      5.   The Partnership will have a December 31 taxable year and will report
its income on the accrual basis.

      6.   All Partnership wells will be spudded by not later than December 31,
2002.  The entire amount to be paid under any drilling and operating agreements
entered into by the Partnership will be attributable to IDC.

      7.   Such drilling and operating agreements will be duly executed and will
govern the operation of the Partnership's wells.

      8.   Based upon the General Partner's review of its experience with its
previous oil and gas partnerships for the past several years and upon the
intended operations of the Partnership, the General Partner believes that the
sum of (i) the aggregate deductions, including depletion deductions, and (ii)
350 percent of the aggregate tax credits from the Partnership will not, as of
the close of any of the first five years ending after the date on which Units
are offered for sale, exceed two times the aggregate cash invested by the
Partners in the Partnership as of such dates.  In that regard, the General
Partner has reviewed the economics of its similar oil and gas partnerships for
the past several years, and has represented that it has determined that none of
those partnerships has resulted in a "tax shelter ratio", as such term is
defined in the Code and Regulations, greater than two to one.  Further, the
General Partner has represented that the deductions that are or will be
represented as potentially allowable to an investor will not result in the
Partnership having a tax shelter ratio, as such term is defined in the code and
Regulations, greater than two to one and believes that no person could
reasonably infer from representations made, or to be made, in connection with
the offering of Units that such sums as of such dates will exceed two times the
Partners' cash investments as of such dates.

                                     62

<PAGE>
      9.   The General Partner believes that at least 90% of the gross income of
the Partnership will constitute income derived from the exploration,
development, production, and/or marketing of oil and gas.  The General Partner
does not believe that any market will ever exist for the sale of Units and the
General Partner will not make a market for the Units.  Further, the Units will
not be traded on an established securities
market.

      10.  The Partnership and each Partner will have the objective of carrying
on the business of the Partnership for profit and dividing the gain therefrom.

      11.  The General Partner will, as nominee for the Partnership, acquire and
hold title to Partnership Properties on behalf of the
Partnership; the General Partner will enter into an agency agreement before the
General Partner acquires any such oil and gas properties on behalf of the
Partnership; the agency agreement will reflect that the General Partner's
acquisition of Partnership properties is on behalf of the Partnership; and the
General Partner will execute assignments of all oil and gas interests acquired
by it on behalf of the Partnership to the Partnership.

      The opinions of Conner & Winters are also subject to all the assumptions,
qualifications, and limitations set forth in the following discussion and in the
opinion, including the assumptions that each of the Partners has full power,
authority, and legal right to enter into and perform the terms of the
Partnership Agreement and to take any and all actions thereunder in connection
with the transactions contemplated thereby.

      Each prospective investor should be aware that, unlike a ruling from the
Service, an opinion of Conner & Winters represents only Conner & Winter's best
judgment.  THERE CAN BE NO ASSURANCE THAT THE SERVICE WILL NOT SUCCESSFULLY
ASSERT POSITIONS WHICH ARE INCONSISTENT WITH THE OPINIONS OF CONNER & WINTERS
SET FORTH IN THIS DISCUSSION AND EXHIBIT B OR IN THE TAX REPORTING POSITIONS
TAKEN BY THE PARTNERS OR THE PARTNERSHIP.  EACH PROSPECTIVE INVESTOR SHOULD
CONSULT HIS OR HER OWN TAX ADVISOR TO DETERMINE THE EFFECT OF THE TAX ISSUES
DISCUSSED HEREIN AND IN EXHIBIT B ON HIS OR HER INDIVIDUAL TAX SITUATION.

General Tax Effects of Partnership Structure

      The Partnership will be formed as a limited partnership pursuant to the
Partnership Agreement and the laws of the State of Oklahoma.  No tax ruling will
be sought from the Service as to the status of the Partnership as a
partnership for federal income tax purposes.  The applicability of the federal
income tax consequences described herein depends on the treatment of the
Partnership as a partnership for federal income tax purposes and not as a
corporation and not as an association taxable as a corporation.  Any tax
benefits anticipated from an investment in the Partnership would be adversely
affected or eliminated if the Partnership is were treated as a corporation for
federal income tax purposes.

      Conner & Winters is of the opinion that, at the time of its formation, the
Partnership will be treated as a partnership for federal income tax purposes.
The opinion is based on the provisions of the Partnership Agreement and
applicable state law and representations made by the General Partner.  The
opinion of Conner & Winters is not binding on the Service and is based on
existing law, which is to a great extent the result of administrative and
judicial interpretation.  In addition, no assurance can be given that the
Partnership will not lose partnership status as a result of changes in either
the manner in which it is operated or the facts other facts upon which the
opinion of Conner & Winters is based.

                                     63

<PAGE>
      Under the Code, a partnership is not a taxable entity and, accordingly,
incurs no federal income tax liability.  Rather, a partnership is a "pass-
through" entity which is required to file an information return with the
Service.  In general, the character of a partner's share of each item of income,
gain, loss, deduction, and credit is determined at the partnership level.  Each
partner is allocated a distributive share of such items in accordance with the
partnership agreement and is required to take such items into account in
determining the partner's income.  Each partner includes such amounts in
determining his or her income for any taxable year of the partnership ending
within or with the taxable year of the partner, without regard to whether the
partner has received or will receive any cash distributions from the
partnership.

Ownership of Partnership Properties

      The General Partner has indicated that it, as nominee for the Partnership
(the "Nominee"), will acquire and hold title to Partnership Properties on behalf
of the Partnership.  The Nominee and the Partnership will enter into an agency
agreement before the Nominee acquires any oil and gas properties on behalf of
the Partnership.  That agency agreement will reflect that the Nominee's
acquisition of Partnership Properties is on behalf of the Partnership. The
Nominee will execute assignments to all oil and gas interest acquired by the
Nominee on behalf of the Partnership to the Partnership.  For various cost and
procedural reasons, these assignments will not be recorded in the real estate
records in the counties in which the Partnership Properties are located.  That
is, while the Partnership will be the owner of the Partnership Properties, there
will be no public record of that ownership.  It is possible that the
Service could assert that the Nominee should be treated for federal income tax
urposes as the owner of the Partnership Properties, notwithstanding the
assignment of those Partnership Properties to the Partnership.  If the Service
were to argue successfully that the Nominee should be treated as the tax owner
of the Partnership Properties, there would be significant adverse federal income
tax consequences to the Limited Partners, such as the unavailability of
depletion deductions in respect of income from Partnership Properties.  The
Service is concerned that taxpayers not be able to shift the tax consequences of
transactions between parties based on the parties' declaration that one party is
the agent of another; the Service generally requires that taxpayers respect the
form of their transactions and ownership of property.  Based on this concern,
the Service may challenge the Partnership's treatment of Partnership Properties,
and tax attributes thereof, which are held of record by the Nominee.

      In Commissioner of Internal Revenue v.  Bollinger, 485 U.S. 340 (1988),
the United States Supreme Court reviewed a principal-agent relationship and held
for the taxpayer in concluding that the principal should be treated as the tax
owner of property held in the name of the agent.  In that case the Supreme Court
noted that "It seems to us that the genuineness of the agency relationship is
adequately assured, and tax-avoiding manipulation adequately avoided, when the
fact that the corporation is acting as agent for its shareholders with respect
to a particular asset is set forth in a written agreement at the time the asset
is acquired, the corporation functions as agent and not principal with respect
to the asset for all purposes, and the corporation is held out as the agent and
not principal in all dealings with third parties relating to the asset."  While
the Partnership and the Nominee will have in place an agreement defining their
relationship before any Partnership Properties are acquired by the Nominee and
the Nominee will function as agent with respect to those Partnership Properties
on behalf of the Partnership, the Nominee will not hold itself out to all third
parties as the agent of the Partnership in dealings relating to the Partnership
Properties.  Unlike the relationship between the principal and the agent in
Bollinger, the Nominee will, however, assign title to Partnership Properties to
the Partnership, but will not record those assignments.  Accordingly, the facts
related to the relationship between the Nominee and the Partnership are not the
same as the facts in Bollinger and it is not clear that the failure of the
Nominee to

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hold itself out to third parties as the agent of the Partnership in dealings
relating to Partnership Properties should result in the treatment of the Nominee
as the tax owner of the Partnership Properties.  For the foregoing reasons,
Conner & Winters have not expressed an opinion on this issue, but Conner &
Winters believe that substantial arguments may be made that the Partnership
should be treated as the tax owner of Partnership Properties acquired by the
Nominee on the Partnership's behalf.  If the Partnership were not treated as the
tax owner of Partnership Properties, then the following discussions which relate
to the Partners' deduction of tax items which are derived from Partnership
Properties, such as IDC, depletion and depreciation, would not be applicable.

Intangible Drilling and Development Costs Deductions

      Congress granted to the Secretary of the Treasury the authority to
prescribe regulations that would allow taxpayers the option of deducting, rather
than capitalizing, IDC.  The Secretary's rules state that, in general, the
option to deduct IDC applies only to expenditures for drilling and development
items that do not have a salvage value.

      The Memorandum provides that 75% of the Partners' capital contributions
will be utilized for IDC, which is deductible in the year of investment.  The
deduction by most Limited Partners generally will be available only to offset
passive income.  Based on a 75% deduction, a one Unit ($1,000) investor in a 35%
marginal Federal tax bracket would reduce taxes payable by $262.  The investor
could also realize additional tax savings on Oklahoma state income taxes in the
state in which such investor resides.

      Classification of Costs.  In general, IDC consists of those costs which in
and of themselves have no salvage value.  In previous partnerships intangible
drilling costs have ranged from 72% to 27% of the investors' contributions.
While the planned activities of the Partnership are similar in nature to those
of prior partnerships, the amount of expenditures classified as IDC could
be greater than or less than for prior partnerships.  In addition, a
partnership's classification of a cost as IDC is not binding on the Service,
which might reclassify an item labeled as IDC as a cost which must be
capitalized.  To the extent not deductible, such amounts will be included in the
Partnership's basis in a mineral property and in the Partners' tax basies
in their interests in the Partnership.

      Timing of Deductions.  Although the Partnership will elect to deduct IDC,
each investor has an option of deducting IDC, or capitalizing all or a part of
the IDC and amortizing it on a straight-line basis over a sixty-month period,
beginning with the taxable month in which the expenditure is made.  In addition
to the effect of this change on regular taxable income, the two methods have
different treatment under the Alternative Minimum Tax ("AMT") (see "Alternative
Minimum Tax").

      Although the General Partner will attempt to satisfy each requirement of
the Service and judicial authority for deductibility of IDC in 2002 for the
Partnership, no assurance can be given that the Service will not successfully
contend that the IDC of a well which is not completed until 2003 for the
Partnership are not deductible in whole or in part until 2003.  Furthermore, no
assurance can be given that the Service will not challenge the current deduction
of IDC because of the prepayment being made to a related party.  If the Service
were successful with such a challenge, the Partners' deductions for IDC would be
deferred to later years.

      Recapture of IDC.  IDC previously deducted that is allocable to a property
(directly or through the ownership of an interest in a partnership) and which
would have been included in the adjusted basis of the property is recaptured as
ordinary income to the extent of ny gain realized upon the disposition of the
property.  Treasury regulations provide that recapture is determined at the
partner level (subject to

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certain anti-abuse provisions).  Where only a portion of recapture property is
disposed of, any IDC related to the entire property is recaptured to the extent
of the gain realized on the portion of the property sold.  In the case of the
disposition of an undivided interest in a property (as opposed to the
disposition of a portion of the property), a proportionate part of the IDC with
respect to the property is treated as allocable to the transferred undivided
interest to the extent of any realized gain.

Depletion Deductions

      The owner of an economic interest in an oil and gas property is entitled
to claim the greater of percentage depletion or cost depletion with respect
to oil and gas properties which qualify for such depletion methods.  In the case
of partnerships, the depletion allowance must be computed separately
by each partner and not by the partnership.  For properties placed in service
after 1986, depletion deductions, to the extent they reduce basis in an oil and
gas property, are subject to ecapture under Code section 1254.

      Cost depletion for any year is determined by multiplying the number of
units (e.g., barrels of oil or Mcf of gas) sold during the year by a fraction,
the numerator of which is the cost or other basis of the mineral interest and
the denominator of which is total reserves available at the beginning of the
period.  In no event can the cost depletion exceed the adjusted basis of the
property to which it relates.

      Percentage depletion is a statutory allowance pursuant to which a
deduction currently equal to 15% of the taxpayer's gross income from each
property is allowed in any taxable year, not to xceed 100% of the
taxpayer's taxable income from the property (computed without the allowance for
depletion) with the aggregate deduction limited to 65% of the taxpayer's
taxable income for the year (computed without regard to percentage depletion and
net operating loss and capital loss carrybacks).  The percentage depletion
deduction rate will vary with the price of oil, but the rate will not be less
than 15%.  A percentage depletion deduction that is disallowed in a year due
to the 65% of taxable income limitation may be carried forward and allowed as a
deduction for the following a subsequent year, subject to the 65% limitation in
that subsequent year.  Percentage depletion deductions reduce the taxpayer's
adjusted basis in the property.  However, unlike cost depletion, percentage
depletion deductions are not limited to the adjusted basis of the property; the
percentage depletion amount continues to be allowable as a deduction after the
adjusted basis has been reduced to zero.

      The availability of depletion, whether cost or percentage, will be
determined separately by each Partner.  Each Partner must separately keep
records of his share of the adjusted basis in an oil or gas property, adjust
such share of the adjusted basis for any depletion taken on such property, and
use such adjusted basis each year in the computation of his cost depletion or in
the computation of his gain or loss on the disposition of such property.  These
requirements may place an administrative burden on a Partner.

Depreciation Deductions

      The Partnership will claim depreciation, cost recovery, and amortization
deductions with respect to its basis in Partnership Property as permitted by
the Code.  For most tangible personal property placed in service after December
31, 1986, the "modified accelerated cost recovery system" ("MACRS") must be used
in calculating the cost recovery deductions.  Thus, the cost of lease
equipment and well equipment, such as casing, tubing, tanks, and pumping units,
and the cost of oil or gas pipelines cannot be deducted currently but must be
capitalized and recovered under MACRS.  The cost recovery deduction for most
equipment used in domestic oil and gas exploration and production and for most
of

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the tangible personal property used in natural gas gathering systems is
calculated using the 200% declining balance method switching to the straight-
line method, a seven-year recovery period, and a half-year convention.  If an
accelerated depreciation method is used, a portion of the depreciation will be a
preference item for AMT purposes.

Interest Deductions

      In the Transaction, the Limited Partners will acquire their interests by
remitting cash in the amount of $1,000 per Unit to the Partnership.  Some
Limited Partners may choose to borrow the funds necessary to acquire a Unit and
may incur interest expense in connection with those loans. Conner & Winters is
unable to express an opinion with respect to the deductibility of any interest
paid or incurred on such a loan because the deductibility of such interest is
dependent upon facts unique to each Limited Partner.

 Transaction Fees

      The Partnership may classify a portion of the fees or expense
reimbursements to be paid to third parties and to the General Partner as
expenses which are deductible as organizational expenses or otherwise.  There is
no assurance that the Service will allow the deductibility of such expenses and
Conner & Winters expresses no opinion with respect to the allocation of such
fees or reimbursements to deductible and nondeductible items.

      Generally, expenditures made in connection with the creation of, and with
sales of interests in, a partnership will fit within one of several
categories.

      A partnership may elect to amortize and deduct its organizational expenses
ratably over a period of not less than 60 months commencing with the month the
partnership begins business. Examples of organizational expenses are legal fees
for services incident to the organization of the partnership, such as
negotiation and preparation of a partnership agreement, accounting fees for
services incident to the organization of the partnership, and filing fees.

      No deduction is allowable for "syndication expenses," examples of which
include brokerage fees, registration fees, legal fees of the underwriter or
placement agent and the issuer (general partners or the partnership) for
securities advice and for advice pertaining to the adequacy of tax disclosures
in the Memorandum offering or private placement memorandum for securities law
purposes, printing costs, and other selling or promotional material.  These
costs must be capitalized.    Payments for services performed in connection with
the acquisition of capital assets must be amortized over the useful life of
such assets.

      No deduction is allowable with respect to "start-up expenditures,"
although such expenditures may be capitalized and amortized over a period of not
less than 60 months.

      The Partnership intends to make overhead reimbursement payments to the
General Partner, as described in greater detail in the Memorandum.  To be
deductible, payments to a general partner must be for services rendered by the
partner other than in his capacity as partner or for compensation determined
without regard to partnership income.  Payments which are not deductible because
they fail to meet this test may be treated as special allocations of income to
the recipient partner and thereby decrease the net loss, or increase the net
income among all partners.  If the Service were to successfully challenge the
General Partner's allocations, a Partner's taxable income could be
increased, thereby resulting in increased taxes and in liability for interest
and penalties.

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Basis and At Risk Limitations

      A Partner's share of Partnership losses will be allowed only to the extent
of the aggregate amount with respect to which the taxpayer is "at risk"
for such activity at the close of the taxable year.  Any such loss disallowed by
the "at risk" limitation shall be treated as a deduction allocable to the
activity in the first succeeding taxable year.

      The Code provides that a taxpayer must recognize taxable income to the
extent that his or her "at risk" amount is reduced below zero.  This recaptured
income is limited to the sum of the loss deductions previously allowed to the
taxpayer, less any amounts previously recaptured.  A taxpayer may be allowed a
deduction for the recaptured amounts included in his taxable income if and when
he increases his amount "at risk" in a subsequent taxable year.

      The Limited Partners will purchase Units by tendering cash to the
Partnership.  To the extent the cash contributed constitutes the "personal
funds" of the Partners, the Partners should be considered at risk with respect
to those amounts.  If the cash contributed constitutes "personal funds," in the
opinion of Conner & Winters, neither the at risk rules nor the adjusted basis
rules will limit the deductibility of losses generated from
the Partnership and allocated to a Limited Partner, to the extent of such
Limited Partner's cash contributions.  In no event, however,  may a Partner
utilize his distributive share of partnership loss where such share exceeds the
Partner's tax basis in the Partnership.

Passive Loss Limitations

      Introduction.  The deductibility of losses generated from passive
activities will be limited for certain taxpayers.  The passive activity loss
limitations apply to individuals, estates, trusts, and personal service
corporations as well as, to a lesser extent, closely held C corporations.

      The definition of a "passive activity" generally encompasses all rental
activities as well as all activities with respect to which the taxpayer does not
"materially participate." Notwithstanding this general rule, however, the term
"passive activity" does not include "any working interest in any oil or gas
property which the taxpayer holds directly or through an entity which does not
limit the liability of the taxpayer with respect to such interest."  A
taxpayer will be considered as materially participating in a venture only if the
taxpayer is involved in the operations of the activity on a "regular,
continuous, and substantial" basis.  In addition, no limited partnership
interest will be treated as an interest with respect to which a taxpayer
materially participates.

      A passive activity loss ("PAL") of a taxpayer is the amount by which the
such taxpayer's aggregate osses from all passive activities for the
taxable year exceed the his or her aggregate income from all passive activities
for such year.

      Individuals and personal service corporations will be entitled to deduct
PALs only to the extent of their passive income whereas closely held C
corporations (other than personal service corporations) can offset PALs against
both passive and net active income, but not against portfolio (dividends,
interest, etc.) income.  In calculating passive income and loss, however, all
activities of the taxpayer are aggregated.  PALs disallowed as a result of the
above rules will be suspended and can be carried forward indefinitely to offset
future passive (or passive and active, in the case of a closely held C
corporation) income.

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<PAGE>
      Upon the disposition of an entire interest in a passive activity in a
fully taxable transaction not involving a related party, any passive loss
that was suspended by the provisions of the passive activity rules is deductible
from either passive or non-passive income.

      Limited Partner Interests.  Most Limited Partners' distributive shares of
the Partnership's losses will be treated as PALs, the availability of which will
be limited in each case to the individual Partners's passive income.  If a
Limited Partner does not have sufficient passive income to utilize the PALs, the
disallowed PALs will be suspended and may be carried forward to be deducted
against passive income arising in future years.  Further, upon the disposition
of the interest to an unrelated party in a fully taxable transaction, such
suspended losses will be available, as described above.

      Limited Partners should generally be entitled to offset their distributive
shares of passive income from the Partnership with deductions from other passive
activities, but not portfolio income.

Alternative Minimum Tax

      Tax benefits associated with oil and gas exploration activities similar to
that of the Partnership had for several years been subject to the AMT.
Specifically, prior to January 1, 1993, IDC was an AMT preference item to the
extent that "excess IDC" exceeded 65% of a taxpayer's net income from oil and
gas properties for the year.  Excess IDC was the amount by which the taxpayer's
IDC deduction exceeded the deduction that would have been allowed if the IDC had
been capitalized and amortized on a straight-line basis over ten years.
Percentage depletion, to the extent it exceeded a property's basis, was also an
AMT preference item.

      For independent producers in taxable years beginning after 1992, the
Energy Policy Act of 1992 repealed the treatment of percentage depletion as a
preference item for AMT purposes and reduced the AMT on expensing of IDC by 30%.

Gain or Loss on Sale of Property or Units

      In the event some or all of the property of the Partnership is sold, or
upon sale of a Unit, a Limited Partner will recognize realize gain to the extent
the amount realized exceeds his or her basis in the Partnership.  In
such case, there may be recapture of IDCs and depletion which is treated as
additional ordinary income for tax purposes.  If the gain realized exceeds the
amount of the recaptured income, the investor will recognize capital gains for
the balance.

      It is possible that a Limited Partner will be required to recognize
ordinary income pursuant to the recapture rules in excess of the taxable income
on the disposition transaction or in a situation where the disposition
transaction resulted in a taxable loss.  To balance the excess income, the
Limited Partner would recognize a capital loss for the difference between the
gain and the income.  Depending on a Limited Partner's particular tax situation,
some or all of this loss might be deferred to future years, resulting in a
greater tax liability in the year in which the sale was made and a reduced
future tax liability.

      Any partner who sells or exchanges interests in a partnership must
generally notify the partnership in writing within 30 days of such
transaction in accordance with Regulations and must attach a statement to
his tax return reflecting certain facts regarding the sale or exchange.  The
notice must include names, addresses, and taxpayer identification numbers
(if known) of the transferor and transferee and the date of the exchange.  The
partnership also is required to provide copies to the

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transferor and the transferee of the information it is required to provide to
the Service in connection with such a transfer.

      A Limited Partner who is required to notify the Partnership of a transfer
of his or her Partnership interest and who fails to do so, may be fined $50 for
each failure, limited to $100,000 provided there is no intentional disregard of
the filing requirement.  Similarly, the Partnership may be fined for failure to
report the transfer.  The partnership's penalty is $50 for each failure, limited
to $250,000 provided there is no intentional disregard of
the filing requirement.

      The tax consequences to an assignee purchaser of a Unit from a Partner are
not described herein.  Any assignor of a Unit should advise his assignee to
consult his own tax advisor regarding the tax consequences of such assignment.

Partnership Distributions

      Under the Code, any increase in a partner's share of partnership
liabilities, or any increase in such partner's individual liabilities by reason
of an assumption by him or her of partnership liabilities is considered to be a
contribution of money by the partner to the partnership.  Similarly,
any decrease in a partner's share of partnership liabilities or any decrease in
such partner's individual liabilities by reason of the partnership's
assumption of such individual liabilities will be considered as a distribution
of money to the partner by the partnership.

      The A Partners's adjusted basis in his or her Units will
initially consist of the cash he or she contributes to the Partnership.  Their
His or her bases will be increased by his or her share of Partnership income and
decreased by his or her share of Partnership losses and distributions.  To the
extent that actual or constructive distributions are in excess of a Partner's
adjusted basis in his or her Partnership interest (after adjustment for
contributions and his or her share of income and losses of the Partnership),
that excess will generally be treated as gain from the sale of a capital asset.
In addition, gain could be recognized to a distributee partner upon the
disproportionate distribution to a partner of unrealized receivables or
substantially appreciated inventory.  The Partnership Agreement prohibits
distributions to a Limited Partner to the extent such distribution would create
or increase a deficit in a Limited Partner's Capital Account.

Partnership Allocations

      The Partners' distributive shares of partnership income, gain, loss, and
deduction should be determined and allocated substantially in accordance with
the terms of the Partnership Agreement.

      The Service could contend that the allocations contained in the
Partnership Agreement do not have substantial economic effect or are not in
accordance with the Partners' interests in the Partnership and may seek to
reallocate these items in a manner that will increase the income or gain or
decrease the deductions allocable to a Partner.

Profit Motive

      The existence of economic, non-tax motives for entering into the
Transaction is essential if the Partners are to obtain the tax benefits
 associated with an investment in the Partnership.

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      Where an activity entered into by an individual is not engaged in for
profit, the individual's deductions with respect to that activity are
limited to those not dependent upon the nature of the activity (e.g., interest
and taxes); any remaining deductions are limited to gross income from the
activity for the year.  Should it be determined that a Partner's activities
motives with respect to the Transaction are "not for profit," the Service could
disallow all or a portion of the deductions generated by the Partnership's
activities and allocated to such Partner.

      The Code generally provides for a presumption that an activity is entered
into for profit where gross income from the activity exceeds the deductions
attributable to such activity for three or more of the five consecutive taxable
years ending with the taxable year in question.  At the taxpayer's election,
such presumption can relate to three or more of the taxable years in the 5-year
period beginning with the taxable year in which the taxpayer first engages in
the activity.

      Due to the inherently factual nature of a Partner's intent and motive in
engaging in the Transaction, Conner & Winters does not express an opinion as to
the ultimate resolution of this issue in the event of a challenge by the
Service.  Partners must, however, seek to make a profit from their activities
with respect to the Transaction beyond any tax benefits derived from those
activities or risk losing those tax benefits.

Administrative Matters

      Returns and Audits.  While no federal income tax is required to be paid by
an organization classified as a partnership for federal income tax purposes, a
partnership must file federal income tax information returns, which are subject
to audit by the Service.  Any such audit may lead to adjustments, in which
event the Limited Partners may be required to file amended personal federal
income tax returns.  Any such audit may also lead to an audit of a Limited
Partner's individual tax return and adjustments to items unrelated to an
investment in Units.

      For purposes of reporting, audit, and assessment of additional federal
income tax, the tax treatment of "partnership items" is determined at the
partnership level.  Partnership items will include those items that the
Regulations provide are more appropriately determined at the partnership level
than the partner level.  The Service generally cannot initiate deficiency
proceedings against an individual partner with respect to partnership
items without first conducting an administrative proceeding at the partnership
level as to the correctness of the partnership's treatment of the item.  An
individual partner may not file suit for a credit or a refund arising out of a
Partnership item without first filing a request for an administrative proceeding
by the Service at the partnership level.  Individual partners are entitled to
notice of such administrative proceedings and decisions therein,
except in the case of partners with less than 1% profits interest in a
partnership having more than 100 partners.  If a group of partners having
an aggregate profits interest of 5% or more in such a partnership so
requests, however, the Service also must mail notice to a partner appointed by
that group to receive notice.  All partners, whether or not entitled to notice,
are entitled to participate in the administrative proceedings at the partnership
level, although the Partnership Agreement provides for waiver of certain of
these rights by the Limited  Partners.  All Partners, including those not
entitled to notice, may be bound by a settlement reached by the Partnership's
representative, the "tax matters partner", which will be Unit Petroleum Company.
If a proposed tax deficiency is contested in any court by any Partner or by the
General Partner, all Partners may be deemed parties to such litigation and bound
by the result reached therein.

      Consistency Requirements.  A partner must generally treat partnership
items on his or her federal income tax returns consistently with the treatment
of such items on the partnership information

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return unless he or she files a statement with the Service identifying the
inconsistency or otherwise satisfies the requirements for waiver of the
consistency requirement.  Failure to satisfy this requirement will result in an
adjustment to conform the partner's treatment of the item with the treatment of
the item on the partnership return.  Intentional or negligent disregard of the
consistency requirement may subject a partner to substantial penalties.

      Compliance Provisions.  Taxpayers are subject to several penalties and
other provisions that encourage compliance with the federal income tax laws,
including an accuracy-related penalty in an amount equal to 20% of the portion
of an underpayment of tax caused by negligence, intentional disregard of rules
or regulations or any "substantial understatement" of income tax.  A
"substantial understatement" of tax is an understatement of income tax that
exceeds the greater of (a) 10% of the tax required to be shown on the return
(the correct tax), or (b) $5,000 ($10,000 in the case of a corporation other
than an S corporation or personal holding corporation).

      Except in the case of understatements attributable to "tax shelter" items,
an item of understatement may not give rise to the penalty if (a) there is
or was "substantial authority" for the taxpayer's treatment of the item or (b)
all facts relevant to the tax treatment of the item are disclosed on the return
or on a statement attached to the return, and there is a reasonable basis for
the tax treatment of such item by the taxpayer.  In the case of partnerships,
the disclosure is to be made on the return of the partnership.  Under the
applicable Regulations, however, an individual partner may make adequate
disclosure with respect to partnership items if certain conditions are met.

      In the case of understatements attributable to "tax shelter" items, the
substantial understatement penalty may be avoided only if the taxpayer
establishes that, in addition to having substantial authority for his or her
position, he or she reasonably believed the treatment claimed was more likely
than not the proper treatment of the item.  A "tax shelter" item is one that
arises from a partnership (or other form of investment) the principal purpose of
which is the avoidance or evasion of federal income tax.

      Based on the definition of a "tax shelter" in the Regulations, performance
of previous partnerships, and the planned activities of the Partnership, the
General Partner does not believe that the Partnership will qualify as a "tax
shelter" under the Code, and will not register it as such.

Accounting Methods and Periods

      The Partnership will use the accrual method of accounting and will select
the calendar year as its taxable year.

State and Local Taxes

      The opinions expressed herein are limited to issues of federal income tax
law and do not address issues of state or local law.  Prospective investors are
urged to consult their tax advisors regarding the impact of state and local laws
on an investment in the Partnership.

Individual Tax Advice Should Be Sought

      The foregoing is only a summary of the material tax considerations that
may affect an investor's decision regarding the purchase of Units.  The tax
considerations attendant to an investment in a Partnership are complex and vary
with individual circumstances.  Each prospective investor should review such tax
consequences with his tax advisor.

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COMPETITION, MARKETS AND REGULATION

      The oil and gas industry is highly competitive in all its phases.  The
Partnership will encounter strong competition from both major independent oil
companies and individuals, many of which possess substantial financial
resources, in acquiring economically desirable prospects and equipment and labor
to operate and maintain Partnership Properties.  There are likewise numerous
companies and individuals engaged in the organization and conduct of oil and gas
drilling programs and there is a high degree of competition among such companies
and individuals in the offering of their programs.

Marketing of Production

      The availability of a ready market for any oil and gas produced from
Partnership Wells will depend upon numerous factors beyond the control of the
Partnership, including the extent of domestic production and importation of oil
and gas, the proximity of Partnership Wells to gas pipelines and the capacity of
such gas pipelines, the marketing of other competitive fuels, fluctuation in
demand, governmental regulation of roduction, refining and transportation,
general national and worldwide economic conditions, and the pricing, use and
allocation of oil and gas and their substitute fuels.

      The demand for gas decreased significantly in the 1980s due to economic
conditions, conservation and other factors.  As a result of such reduced demand
and other factors, including the Power Plant and Industrial Fuel Use Act
(the "Fuel Use Act") which related to the use of oil and gas in the United
States in certain fuel burning installations, many pipeline companies began
purchasing gas on terms which were not as favorable to sellers as terms
governing purchases of gas prior thereto.  Spot market gas prices declined
generally during that period.  While the Fuel Use Act has been repealed and the
markets for gas have improved significantly recently, there can be no assurance
that such improvement will continue.  As a result, it is possible that there may
be significant delays in selling any gas from Partnership Properties.

      In the event the Partnership acquires an interest in a gas well or
completes a productive gas well, or a well that produces both oil and gas, the
well may be shut in for a substantial period of time for lack of a market if the
well is in an area distant from existing gas pipelines.  The well may remain
shut in until such time as a gas pipeline, with available capacity, is extended
to such an area or until such time as sufficient wells are drilled to establish
adequate reserves which would justify the construction of a gas pipeline,
processing facilities, if necessary, and a transmission system.

      The worldwide supply of oil has been largely dependent upon rates of
production of foreign reserves.  Although in recent years the demand for oil has
slightly increased in this country, imports of foreign oil continue to increase.
Consequently, historically the prices for domestic oil production have generally
remained low.  Future domestic oil prices will depend largely upon the actions
of foreign producers with respect to rates of production and it is virtually
impossible to predict what actions those producers will take in the future.
Prices may also be affected by political and other factors
relating to the Middle East.  As a result, it is possible that prices for oil,
if any, produced from a Partnership Well will be lower than those currently
available or projected at the time the interest therein is acquired.  In view of
the many uncertainties affecting the supply and demand for crude oil and natural
gas, and the change in the makeup of the Congress of the United States and the
resulting potential for a different focus for the United States energy policy,
the General Partner is unable to predict what future gas and oil prices will be.

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Regulation of Partnership Operations

      Production of any oil and gas found by the Partnership will be affected by
state and federal regulations.  All states in which the Partnership intends to
conduct activities have statutory provisions regulating the production and sale
of oil and gas.  Such statutes, and the regulations promulgated in connection
therewith, generally are intended to prevent waste of oil and gas and to protect
correlative rights and the opportunities to produce oil and gas as between
owners of a common reservoir.  Certain state regulatory authorities also
regulate the amount of oil and gas produced by assigning allowable rates of
production to each well or proration unit.  Pertinent state and federal statutes
and regulations also extend to the prevention and clean-up of pollution.
These laws and regulations are subject to change and no predictions can be made
as to what changes may be made or the effect of such changes on the
Partnership's operations.

      Under the laws and administrative regulations of the State of Oklahoma
regarding forced pooling, owners of oil and gas leases or unleased mineral
interests may be required to elect to participate in the drilling of a well with
other fractional undivided interest owners within an established spacing unit or
to sell or farm out their interest therein.  The terms of any such
sale or farm-out are generally those determined by the Oklahoma Corporation
Commission to be equal to the most favorable terms then available in the area in
arm's length transactions although there can be no assurance that this will
be the case.  In addition, if properties become the subject of a forced pooling
order, drilling operations may have to be undertaken at a time or with other
parties which the General Partner feels may not be in the best interest of the
Partnership.  In such event, the Partnership may have to farm out or assign its
interest in such properties.  In addition, if a property which might otherwise
be acquired by the Partnership becomes subject to such an order, it may become
unavailable to the Partnership.  Finally, as a result of forced pooling
proceedings involving a Partnership Property, the Partnership may acquire
larger than anticipated interest in such property, thereby increasing its share
of the costs of operations to be conducted.

Natural Gas Price Regulation

      Partnership Revenues are likely to be dependent on the sale and
transportation of natural gas that may be subject to regulation by the Federal
Energy Regulatory Commission ("FERC").  Historically the sale of natural gas
has been regulated by the FERC under the Natural Gas Act of 1938 ("NGA") and/or
the Natural Gas Policy Act of 1978 ("NGPA").  Under the NGPA, natural gas is
divided into numerous, complex categories based on, among other things, when,
where and how deep the gas well was drilled and whether the gas was committed to
interstate or intrastate commerce on the day before the date of enactment of the
statute.  These categories determine whether the natural gas remains subject to
non-price regulation under the NGA and/or to maximum price restrictions under
the NGPA.  In addition to setting ceiling prices for natural gas, FERC approval
is required for both the commencement and abandonment of sales of certain
categories of gas in interstate commerce for resale and for the transportation
of natural gas in interstate commerce.  FERC has general investigatory and other
powers, including limited authority to set aside or modify terms of
gas purchase contracts subject to its jurisdiction.  Price and non-price
regulation of natural gas produced from most wells drilled after 1978 has
terminated.  That gas may be sold without prior regulatory approval and at
whatever price the market will bear.

      On July 26, 1989, the Natural Gas Wellhead Decontrol Act of 1989 became
effective.  Consequently, due to this statutory deregulation and FERC's
issuance of Order No. 547 discussed below,

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as of January 7, 1993 the price of virtually all gas produced by producers not
affiliated with interstate pipelines has been deregulated by FERC.

      Market determined prices for deregulated categories of natural gas
fluctuate in response to market pressures which currently favor purchasers and
disfavor producers.  As a result of the deregulation of a greater proportion of
the domestic United States gas market and an increased availability of natural
gas transportation, a competitive trading market for gas has developed.  For
several reasons the supply of gas has exceeded demand.  The General Partner
cannot reliably predict at this time whether such supply/demand imbalance will
improve or worsen from a producer's viewpoint.

      During the past several years, FERC has adopted several regulations
designed to create a more competitive, less regulated market for natural gas.
These regulations have materially affected the market for natural gas.

      FERC's initial major initiative was adoption of its "open-access
transportation program," through Order No.s 436 and 500.  Regulation of Natural
Gas Pipelines After Partial Wellhead Decontrol, Order No.  436, 50 Fed. Reg.
42,408 (October 18, 1985), vacated and remanded, Associated Gas Distributors v.
FERC, 824 F.2d 981 (D.C. Cir.  1987), cert. denied, 485 U.S. 1006 (1988),
readopted on an interim basis, Order No. 500, 52 Fed. Reg. 30,344 (Aug.  14,
1987), remanded, American Gas Association v. FERC, 888 F.2d 136 (D.C. Cir.
1989), readopted, Order No. 500-H, 54 Fed. Reg. 52,344 (Dec. 21, 1989), reh'g
granted in part and denied in part, Order No. 500-I, 55 Red. Reg.  6605 (Feb.
26, 1990), aff'd in part and remanded in part, American Gas Association
v. FERC, 912 F.2d 1496 (D.C.  Cir.  1990), cert. denied, 111 S. Ct. 957
(1991).  Order 436 implemented three key requirements: (1) jurisdictional
pipelines were required to permit their firm sales customers to convert
their firm sales entitlements to a volumetrically equivalent amount of
firm transportation service over a five-year period; (2) jurisdictional
pipelines were required to offer their open-access transportation services
without discrimination or preference; and (3) jurisdictional pipelines
were required to design maximum rates to ration capacity during peak
periods and to maximize throughput for firm service during off-peak
periods and for interruptible service during all periods.  The
availability of transportation under Order 500 greatly expanded the free
trading market for natural gas, including the establishment of an active and
viable spot market.

      Subsequently, in Order 636 the FERC focused on whether the resulting
regulatory structure provided all gas sellers with the same regulatory
opportunity to compete for gas purchasers.  It decided that the form of
bundled pipeline services (gas sales and transportation) was unduly
discriminatory and anticompetitive.  Pipeline Service Obligations and
Revisions to Regulations Governing Self-Implementing Transportation; and
Regulation of Natural Gas Pipelines After Wellhead Decontrol, Order No. 636, 57
Fed.  Reg. 13,267 (Apr. 16, 1992), III FERC Stats. & Regs. Preambles
Paragraph 30,939, at 30,406;  Regulations of Natural Gas Pipelines After Partial
Wellhead Decontrol, and Order Denying Rehearing in Part, Granting Rehearing in
Part, and Clarifying Order No. 636, Order No.  636-A, 57 Fed. Reg.
36,128 (Aug. 12, 1992), III FERC Stats. & Regs.  Preambles Paragraph
30,950; Regulation of Natural Gas Pipelines After Partial Wellhead
Decontrol; Regulation of Natural Gas Pipelines After Partial Wellhead
Decontrol; Order Denying Rehearing and Clarifying Order Nos. 636 and 636-
A, Order No. 636-B, 57 Fed. Reg. 57,911 (Dec.  8, 1992).

      Among other things, Order 636 required each interstate pipeline
company to "unbundle" its traditional wholesale services and create and make
available on an open and nondiscriminatory basis numerous constituent services
(such as gathering services, storage services, firm and interruptible
transportation services, and stand-by sales services) and to adopt a new rate
making methodology

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(Straight Fixed Variable) to determine appropriate rates for those services.  To
the extent the pipeline company or its sales affiliate makes gas sales as a
merchant in the future, it will do so in direct competition with all other
sellers pursuant to private contracts; however, pipeline companies have or will
become "transporters only."  Order 636 also allows pipeline companies to act as
agents for their customers in arranging the transportation of gas purchased from
any supplier, including the pipeline itself, and to charge a negotiated fee for
such agency services.  The FERC required each pipeline company to develop the
specific terms of service in individual proceedings and to submit for approval
by FERC a compliance filing which set forth the pipeline company's new, detailed
procedures.

      In response to a Court remand, on February 27, 1997 FERC issued its final
rule further revising Order 636.  Pipeline Service Obligations and Revisions to
Regulations Governing Self-Implementing Transportation Under Part 284 and
Regulation of National Pipelines After Partial Wellhead Decontrol, 62 Fed. Reg.
10204 (Mar. 6, 1997).  It modified its regulation by (i) changing the selection
of a twenty-year matching term for the right of first refusal and instead
adopting a five-year matching term and (ii) reversing the requirement that
pipelines allocate 10% of GSR costs to interruptible customers and requiring
that pipelines propose the percentage that interruptible customers will bear
based on the individual circumstances present on each pipeline. Most of the
individual pipeline restructurings arising from Order 636 have been completed.

      In essence, the goal of Order 636 is to make a pipeline's position as gas
merchant indistinguishable from that of a non-pipeline supplier.  It,
therefore, pushes the point of sale of gas by pipelines upstream, perhaps all
the way to the wellhead.  Order 636 also requires pipelines to give firm
transportation customers flexibility with respect to receipt and delivery
points (except that a firm shipper's choice of delivery point cannot be
downstream of the existing primary delivery point) and to allow "no-notice"
service (which means that gas is available not only simultaneously but also
without prior nomination, with the only limitation being the customer's daily
contract demand) if the pipeline offered no-notice city-gate sales service on
May 18, 1992.  Thus, this separation of pipelines' sales and transportation
allows non-pipeline sellers to acquire firm downstream transportation rights
and thus to offer buyers what is effectively a bundled city-gate sales service
and it permits each customer to assemble a package of services that serves its
individual requirements.  But it also makes more difficult the coordination of
gas supply and transportation.

      The results of these changes could increase the marketability of natural
gas and place the burden of obtaining supplies of natural gas for local
distribution systems directly on distributors who would no longer be able to
rely on the aggregation of supplies by the interstate pipelines.  Such
distributors may return to longer term contracts with suppliers who can assure a
secure supply of natural gas.  A return to longer term contracts and the
attendant decrease in gas available for the spot market could improve gas
prices.  The primary beneficiaries of these changes should be gas marketers and
the producers who are able to demonstrate the availability of an assured long-
term supply of natural gas to local distribution purchasers and to large end
users.  However, due to the still evolutionary nature of Order 636 and
its implementation, it is not possible at this time to project the impact Order
636 will have on the Partnership's ability to sell gas directly into gas markets
previously served by the gas pipelines.

      As a corollary to Order 636, FERC issued Order 547, which is a blanket
certificate of public convenience and necessity pursuant to Section 7 of the NGA
that authorizes any person who is not an interstate pipeline or an affiliate
thereof to make sales for resale at negotiated rates in interstate commerce of
any category of gas that is subject to the Commission's NGA jurisdiction.
(There are certain requirements which must be met before an affiliated marketer
of an interstate pipeline can avail itself of this certification.) Regulations
Governing Blanket Marketer Sales Certificates, Order No.  547,

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57 Fed. Reg.  57,952 (Dec. 8, 1992) (to be codified at 18 C.F.R.  Sections
284.401 - .402).  The blanket certificates were effective January 7, 1993, and
do not require any further application by a person.  The goal of Order 457, in
conjunction with Orders 636, 636-A and 636-B, is to provide all merchants of
natural gas a "level playing field" so that gas merchants who are not interstate
pipelines are on an equal footing with interstate pipeline merchants who are
afforded blanket sales certificates pursuant to Order 636.

      The FERC has also begun to allow individual companies to depart from cost-
of-service regulation and set market-based rates if they can show they lack
significant market power or have mitigated market power.  See, e.g., Richmond
Gas Storage Systems, 59 FERC Paragraph 61,316 (1992); El Paso Natural Gas
Company, 54 FERC Paragraph 61,316, reh'g granted and denied in part, 56 FERC
Paragraph 61,290 (1990); Transcontinental Gas Pipe Line Corp., 53 FERC
Paragraph 61,446, reh'g granted and denied in part, 57 FERC Paragraph 61,345
(1991).  Since the FERC has stated that "[w]here companies have market power,
market-based rates are not appropriate," in order to "enhance productive
efficiency in non-competitive markets," the FERC issued a rule allowing
pipelines (and electric utilities) "to propose incentive rate mechanisms as
alternatives to traditional cost-of-service regulations." Incentive Ratemaking
for Interstate Natural Gas Pipelines, Oil Pipelines, and Electric Utilities;
Policy Statement on Incentive Regulation, 57 Fed. Reg.  55,231 (Nov. 24, 1992).
The FERC has established five specific regulatory standards for implementing
specific incentive mechanisms: they should (1) be prospective, (2) be voluntary,
(3) be understandable, (4) result in quantifiable benefits to consumers
including an upper limit on the risk to consumers that the incentive rates
would be higher than rates they would have paid under traditional regulation,
and (5) demonstrate how they maintain or enhance incentives to improve
the quality of service.

      Other regulatory actions have included elimination of minimum take and
minimum bill provisions of pipeline sales tariffs (Order 380) and authorization
of automatic abandonment authority upon expiration or termination of the
underlying contracts (Order 490).  FERC has also provided several forms of
"blanket" certificates authorizing sales of gas with pregranted abandonment.

      In addition, in Order 451, FERC established an alternative maximum
lawful price for certain NGPA Section 104 and 106 gas produced from wells
drilled prior to 1975 (so-called "old gas") which otherwise would be subject to
lower ceiling prices.  FERC provided, however, that the higher price could be
collected only where the parties amended the contract or pursuant to complicated
"good faith negotiation" rules which permit purchasers facing
requests for increased prices to seek reduction of certain higher prices
and authorize abandonment of both the higher cost and lower cost supplies if
agreement cannot be reached.  After the Fifth Circuit vacated Order 451 as an
invalid exercise of FERC's authority, the United States Supreme Court
reversed that decision and upheld the entirety of Order 451.

      The issuance of Order 636 and its future interpretation, as well
as the future interpretation and application by FERC of all of the above rules
and its broad authority, or of the state and local regulations by the relevant
agencies, could affect the terms and availability of transportation services
for transportation of natural gas to customers and the prices at which gas can
be sold on behalf of the Partnership.  For instance, as a result of Order 636,
many interstate pipeline companies have divested their gathering systems, either
to unregulated affiliates or to third persons, a practice which could result in
separate, and higher, rates for gathering a producer's natural gas.
In proceedings during mid and late 1994 allowing various interstate natural gas
companies' spindowns or spinoffs of gathering facilities, the FERC held that,
except in limited circumstances of abuse, it generally lacks jurisdiction over
a pipeline's gathering affiliates, which neither transport natural gas in
interstate commerce nor sell gas in interstate

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commerce for resale.  However, pipelines spinning down gathering systems have to
include two Order No. 497 standards of conduct in their tariffs:
nondiscriminatory access to transportation for all sources of supply and no
tying of pipeline transportation service to any service by the pipeline's
gathering affiliate.  In addition, if unable to reach a mutually acceptable
gathering contract with a present user of the gathering facilities, the FERC
required that the pipeline must offer a two-year "default contract" to existing
users of the gathering facilities.  However, on appeal, while the United States
Court of Appeals for the District of Columbia upheld the FERC's allowing the
spinning down of gathering facilities to a non-regulated affiliate, in Conoco
Inc. v. FERC, 90 F.3d 536, 552-53 (D.C. Cir.  1996) the D.C. Circuit remanded
the FERC's default contract mechanism.  On February 18, 1997 the United States
Supreme Court denied a petition to review the D. C.  Circuit's decision.  As a
result of FERC's action, some states have enacted or are considering statutory
and/or regulatory provisions to regulate gathering systems.  Consequently, the
General Partner cannot reliably predict at this time how regulation will
ultimately impact Partnership Revenue.

Oil Price Regulation

      With respect to oil pipeline rates subject to the FERC's jurisdiction
under the Interstate Commerce Act, in October 1993 the FERC issued Order 561 to
implement the requirements of Title XVIII of the Energy Policy Act of 1992.
Order 561 established an indexing system, effective January 1, 1995, under which
many oil pipelines are able to readily change their rates to track changes in
the Producer Price Index for Finished Goods (PPI-FG), minus one percent.  This
index established ceiling levels for rates.  Order 561 also permits cost-of-
service proceedings to establish just and reasonable rates.  The Order does not
alter the right of a pipeline to seek FERC authorization to charge market rates.
However, until the FERC makes the finding that the pipeline does not exercise
significant market power, the pipeline's rates cannot exceed the applicable
index ceiling level or a level justified by the pipeline's cost of service.

State Regulation of Oil and Gas Production

      Most states in which the Partnership may conduct oil and gas activities
regulate the production and sale of oil and natural gas.  Those states generally
impose requirements or restrictions for obtaining drilling permits, the method
of developing new fields, the spacing and operation of wells and the prevention
of waste of oil and gas resources.  In addition, most states regulate the
rate of production and may establish maximum daily production allowable from
both oil and gas wells on a market demand or conservation basis.  Until recently
there has been no limit on allowable daily production on the basis of market
demand, although at some locations production continues to be regulated for
conservation or market purposes.  In 1992 Oklahoma and Texas imposed additional
limitations on gas production to more closely track market demand.  The General
Partner cannot predict whether any state regulatory agency may issue additional
allowable reductions which may adversely affect the Partnership's ability to
produce its gas reserves.

Legislative and Regulatory Production and Pricing Proposals

      A number of legislative and regulatory proposals continually are advanced
which, if put into effect, could have an impact on the petroleum industry.  The
various proposals involve, among other things, an oil import fee, restructuring
how oil pipeline rates are determined and implemented reducing production
allowables, providing purchasers with "market-out" options in existing and
future gas purchase contracts, eliminating or limiting the operation of take-or-
pay clauses, eliminating or limiting the operation of "indefinite price
escalator clauses" (e.g., pricing provisions which allow prices

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<PAGE>
to escalate by means of reference to prices being paid by other purchasers of
natural gas or prices for competing fuels), and state regulation of gathering
systems.  Proposals concerning these and other matters have been and will be
made by members of the President's office, Congress, regulatory agencies and
special interest groups.  The General Partner cannot predict what legislation
or regulatory changes, if any, may result from such proposals or any effect
therefrom on the Partnership.

      The effect of these regulations could be to decrease allowable
production on Partnership Properties and thereby to decrease Partnership
Revenues.  However, by decreasing the amount of natural gas available in the
market, such regulations could also have the effect of increasing prices of
natural gas, although there can be no assurance that any such increase will
occur.  There can also be no assurance that the proposed regulations
described above will be adopted or that they will be adopted upon the
terms set forth above.  Additionally, such proposals, if adopted, are likely to
be challenged in the courts and there can be no assurance as to the outcome of
any such challenge.

Production and Environmental Regulation

      Certain states in which the Partnership may drill and own productive
properties control production from wells through regulations establishing
the spacing of wells, limiting the number of days in a given month
during which a well can produce and otherwise limiting the rate of
allowable production.

      In addition, the federal government and various state governments have
adopted laws and regulations regarding protection of the environment.  These
laws and regulations may require the acquisition of a permit before or after
drilling commences, impose requirements that increase the cost of operations,
prohibit drilling activities on certain lands lying within wilderness areas
or other environmentally sensitive areas and impose substantial liabilities for
pollution resulting from drilling operations, particularly operations in
offshore waters or on submerged lands.

      A past, present, or future release or threatened release of a hazardous
substance into the air, water, or ground by the Partnership or as a result of
disposal practices may subject the Partnership to liability under the
Comprehensive Environmental Response, Compensation and Liability Act, as amended
("CERCLA"), the Resource Conservation Recovery Act ("RCRA"), the Clean Water
Act, and/or similar state laws, and any regulations promulgated
pursuant thereto.  Under CERCLA and similar laws, the Partnership may be fully
liable for the cleanup costs of a release of hazardous substances even though
it contributed to only part of the release.  While liability under CERCLA and
similar laws may be limited under certain circumstances, typically the limits
are so high that the maximum liability would likely have a significant
adverse effect on the Partnership.  In certain circumstances, the Partnership
may have liability for releases of hazardous substances by previous owners of
Partnership Properties.  Additionally, the discharge or substantial threat of a
discharge of oil by the Partnership into United States waters or onto an
adjoining shoreline may subject the Partnership to liability under the Oil
Pollution Act of 1990 and similar state laws.  While liability under the Oil
Pollution Act of 1990 is limited under certain circumstances, the maximum
liability under those limits would still likely have a significant adverse
effect on the Partnership.  The Partnership's operations generally will be
covered by the insurance carried by the General Partner or UNIT, if any.
However, there can be no assurance that such insurance coverage will always be
in force or that, if in force, it will adequately cover any losses or liability
the Partnership may incur.

      Violation of environmental legislation and regulations may result
in the imposition of fines or civil or criminal penalties and, in certain
circumstances, the entry of an order for the removal,

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remediation and abatement of the conditions, or suspension of the activities,
giving rise to the violation.  The General Partner believes that the Partnership
will comply with all orders and regulations applicable to its operations.
However, in view of the many uncertainties with respect to the current controls,
including their duration and possible modification, the General Partner cannot
predict the overall effect of such controls on such operations.  Similarly, the
General Partner cannot predict what future environmental laws may be enacted or
regulations may be promulgated and what, if any, impact they would have on
operations or Partnership Revenue.

                 SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT

      The business and affairs of the Partnership and the respective rights and
obligations of the Partners will be governed by the Agreement.  The following is
a summary of certain pertinent provisions of the Agreement which have not been
as fully discussed elsewhere in this Memorandum but does not purport to be a
complete description of all relevant terms and provisions of the Agreement and
is qualified in its entirety by express reference to the Agreement.  Each
prospective subscriber should carefully review the entire Agreement.

Partnership Distributions

      The General Partner will make quarterly determinations of the
Partnership's cash position.  If it determines that excess cash is available for
distribution, it will be distributed to the Partners in the same proportions
that Partnership Revenue has been allocated to them after giving effect to
previous distributions and to portions of such revenues theretofore used or
expected to be thereafter used to pay costs incurred in conducting Partnership
operations or to repay Partnership borrowings.  It is expected that no cash
distributions will be made earlier than the first quarter of 2003.
Distributions of cash determined by the General Partner to be available
therefore will be made to the Limited Partners quarterly and to the General
Partner at any time.  All Partnership funds distributed to the Limited Partners
shall be distributed to the persons who were record holders of Units on the
day on which the distribution is made.  Thus, regardless of when an assignment
of Units is made, any distribution with respect to the Units which are assigned
will be made entirely to the assignee without regard to the period of time prior
to the date of such assignment that the assignee holds the Units.

      The Partnership will terminate automatically on December 31, 2032 unless
prior thereto the General Partner or Limited Partners holding a majority of the
outstanding Units elect to terminate the Partnership as of an earlier date.
Upon termination of the Partnership, the debts, liabilities and obligations of
the Partnership will be paid and the Partnership's oil and gas properties
and any tangible equipment, materials or other personal property may be sold for
cash.  The cash received will be used to make certain adjusting payments to
the Partners (see "SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT --Termination").
Any remaining cash and properties will then be distributed to the Partners in
proportion to and to the extent of any remaining balances in the Partners'
capital accounts and then in undivided percentage interests to the Partners in
the same proportions that Partnership Revenues are being shared at the time of
such termination (see "SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT --
Termination").

Deposit and Use of Funds

      Until required in the conduct of the Partnership's business, Partnership
funds, including, but not limited to, the Capital Contributions, Partnership
Revenue and proceeds of borrowings by the Partnership, will be deposited, with
or without interest, in one or more bank accounts of the Partnership

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in a bank or banks to be selected by the General Partner or invested in short-
term United States government securities, money market funds, bank certificates
of deposit or commercial paper rated as "A1" or "P1" as the General Partner, in
its sole discretion, deems advisable.  Any interest or other income generated by
such deposits or investments will be for the Partnership's account.  Except for
Capital Contributions, Partnership funds from any of the various sources
mentioned above may be commingled with funds of the General Partner and may be
used, expended and distributed as authorized by the terms and provisions of the
Agreement.  The General Partner will be entitled to prompt reimbursement of
expenses it incurs on behalf of the Partnership.

Power and Authority

      In managing the business and affairs of the Partnership, the General
Partner is authorized to take such action as it considers appropriate and in the
best interests of the Partnership (see Section 10.1 of the Agreement).  The
General Partner is authorized to engage legal counsel and otherwise to act with
respect to Service audits, assessments and administrative and judicial
proceedings as it deems in the best interests of the Partnership and pursuant to
the provisions of the Code.

      The General Partner is granted a broad power of attorney authorizing it to
execute certain documents required in connection with the organization,
qualification, continuance, modification and termination of the Partnership on
behalf of the Limited Partners (see Sections 1.5 and 1.6 of the Agreement).
Certain actions, such as an assignment for the benefit of its creditors or a
sale of substantially all of the Partnership Properties, except in connection
with the termination, roll-up or consolidation of the Partnership, cannot be
taken by the General Partner without the consent of a majority in interest of
the Limited Partners and the receipt of an opinion of Conner & Winters as
described under "Assignments by the General Partner" below (see Sections
10.15 and 12.1 of the Agreement).

      The Agreement provides that the General Partner will either conduct the
Partnership's drilling and production operations and operate each Partnership
Well or arrange for a third party operator to conduct such operations.
The General Partner will, on behalf of the Partnership, enter into an
appropriate operating agreement with the other owners of properties to be
developed by the Partnership authorizing either the General Partner or a third
party operator to conduct such operations.  The Partnership Agreement further
provides that the Partnership will take such action in connection with
operations pursuant to such operating agreements as the General Partner, in its
sole discretion, deems appropriate and in the best interests of the Partnership,
and the decision of the General Partner with respect thereto will be binding
upon the Partnership.

Rollup or Consolidation of the Partnership

      Two years or more after the Partnership has completed substantially all of
its property acquisition, drilling and development operations, the General
Partner may, without the vote, consent or approval of the Limited Partners,
cause all or substantially all of the oil and gas properties and other assets of
the Partnership to be sold, assigned or transferred to, or the Partnership
merged or consolidated with, another partnership or a corporation, trust or
other entity for the purpose of combining the assets of two or more of the oil
and gas partnerships formed for investment or participation by employees,
directors and/or consultants of UNIT or any of its subsidiaries; provided,
however, that the valuation of the oil and gas properties and other assets of
all such participating partnerships for purposes of such transfer or combination
shall be made on a consistent basis and in a manner which the
General Partner and UNIT believe is fair and equitable to the Limited Partners.
As a consequence of any such transfer or

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combination, the Partnership will be dissolved and terminated and the Limited
Partners shall receive partnership interests, stock or other equity interests in
the transferee or resulting entity.  See "RISK FACTORS -- Investment Risks -
Roll-Up or Consolidation of the Partnership."

Limited Liability

      Under the Act, a limited partner is not generally liable for partnership
obligations unless he or she takes part in the control of the business.  The
Agreement provides that the Limited Partners cannot bind or commit the
Partnership or take part in the control of its business or management of its
affairs, and that the Limited Partners will not be personally liable for any
debts or losses of the Partnership.  However, the amounts contributed to the
Partnership by the Limited Partners and the Limited Partners' interests in
Partnership assets, including amounts of undistributed Partnership Revenue
allocable to the Limited Partners, will be subject to the claims of creditors of
the Partnership.  A Limited Partner (or his or her estate) will be obligated to
contribute cash to the Partnership, even if the Limited Partner is unable to do
so because of death, disability or any other reason, for:

           (1)  any unpaid contribution which the Limited Partner agreed to make
      to the Partnership; and

           (2)  any return, in whole or in part, of the Limited Partner's
      contribution to the extent necessary to discharge Partnership liabilities
      to all creditors who extended credit or whose claims arose before such
      return.

      Liability of a Limited Partner is limited by the Act to one year for any
return of his or her contribution not in violation of the Partnership Agreement
or such Act and six years on any return of his or her contribution in violation
of the Partnership Agreement or such Act.  A partner is deemed to have received
a return of his or her contribution to the extent that a distribution to him or
her reduces his or her share of the fair value of the net assets of the
Partnership below the value of his or her contribution which has not been
distributed to him or her.  How this provision applies to a partnership whose
primary assets are producing oil and gas properties or other depleting assets is
not entirely clear.  The Agreement provides that for the purposes of this
provision, the value of a Limited Partner's contribution which has not been
distributed to him or her at any point in time will be the Limited Partner's
Percentage of the stated capital of the Partnership allocated to the Limited
Partners as reflected in its financial statements as of such point in time.

      Maintenance of limited liability of the Limited Partners in other
jurisdictions in which the Partnership may operate may require compliance with
certain legal requirements of those jurisdictions.  In such jurisdictions, the
General Partner shall cause the Partnership to operate in such a manner as it,
on the advice of responsible Conner & Winters, deems appropriate to avoid
unlimited liability for the Limited Partners (see Sections 1.5, 12.1
and 12.2 of the Agreement).  After the termination of the Partnership, any
distribution of Partnership Properties to the Limited Partners would result in
their having unlimited liability with respect to such properties.

      Although the Partnership will, with certain limited exceptions, serve as a
co-general partner of any drilling or income programs formed by UNIT or UPC in
2002 (see "PROPOSED ACTIVITIES"), the general liability of the Partnership will
not flow through to the Limited Partners.

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<PAGE>
Records, Reports and Returns

      The General Partner will maintain adequate books, records, accounts
 and files for the Partnership and keep the Limited Partners informed by means
of written interim reports rendered within 60 days after each quarter of
 the Partnership's fiscal year.  The reports will set forth the source and
 disposition of Partnership Revenues during the quarter.

      Engineering reports on the Partnership Properties will be prepared by the
General Partner for each year for which the General Partner prepares such a
report in connection with its own activities.  Such report will include an
estimate of the total oil and gas proven reserves of the Partnership, the dollar
value thereof and the value of the Limited Partners' interest in such reserve
value.  The report shall also contain an estimate of the life of the Partnership
Properties and the present worth of the reserves.  Each Limited Partner will
receive a summary statement of such report which will reflect the value of the
Limited Partners' interest in such reserves.

      The General Partner will timely file the Partnership's income tax
returns and by March 15 of each year or as soon thereafter as
practicable, furnish each person who was a Limited Partner during the prior year
all available information necessary for inclusion in his or her federal
income tax return.  (See Section 8.1 of the Agreement).

Transferability of Interests

      Restrictions.  A Limited Partner may not transfer or assign Units except
for certain transfers:

      .    to the General Partner;

      .    to or for the benefit of himself or herself, his or her spouse,
           or other members of the transferor Limited Partner's immediate
           family sharing the same residence;

      .    to any corporation or other entity whose beneficial owners are all
           Limited Partners or permitted assignees;

      .    by the General Partner to any person who at the time of such transfer
           is an employee of the General Partner, UNIT or its subsidiaries;
           and

      .    by reason of death or operation of law.

      Further, no sale or exchange of any Units may be made if the sale of such
interest would, in the opinion of Conner & Winters for the Partnership, result
in a termination of the Partnership for purposes of Section 708 of the
Code, violate any applicable securities laws or cause the Partnership to be
treated as an association taxable as a corporation for federal income tax
purposes; provided, however, that this condition may be waived by the General
Partner, in its sole discretion.  Moreover, in no event shall all or any portion
of a Limited Partner's Units be assigned to a minor or an incompetent, except by
will, intestate succession, in trust, or pursuant to the Uniform
Gifts to Minors Act.

      As the offer and sale of the Units are not being registered under the
Securities Act of 1933, as amended, they may be sold, transferred, assigned or
otherwise disposed of by a Limited Partner only if, in the opinion of Conner &
Winters for the Partnership, such transfer or assignment would not violate, or
cause the offering of the Units to be violative of, such act or applicable state
securities laws, including

                                     83

<PAGE>
investor suitability standards thereunder.  Because of the structure and
anticipated operation of the Partnership, Rule 144 under the Securities Act of
1933 will not be available to Limited Partners in connection with any such
sales.

      Assignees.  An assignee of a Limited Partner does not automatically become
a Substituted Limited Partner, but has the right to receive the same share of
Partnership Revenue and distributions thereof to which the assignor Limited
Partner would have been entitled.  A Limited Partner who assigns his or her
Partnership interest ceases to be a Limited Partner, except that until a
Substituted Limited Partner is admitted in his or her place, the assignor
retains the statutory rights of an assignor of a Limited Partner's interest
under the partnership laws of the State of Oklahoma.  The assignee of a
Partnership interest who does not become a Substituted Limited Partner and
desires to make a further assignment of such interest is subject to all of the
restrictions on transferability of Partnership interests described herein and in
the Partnership Agreement.

      In the event of the death, incapacity or bankruptcy of a Limited
Partner, his or her legal representatives will have all the rights of a Limited
Partner only for the purpose of settling or liquidating his or her estate and
such power as the decedent, incompetent or bankrupt Limited Partner possessed to
assign all or any part of his or her interest in the Partnership and to join
with such assignee in satisfying conditions precedent to such assignee's
becoming a Substituted Limited Partner.

      A purported sale, assignment or transfer of a Limited Partner's interest
will be recognized by the Partnership when it has received written notice
of such sale or assignment in form satisfactory to the General Partner, signed
by both parties, containing the purchaser's or assignee's acceptance of the
terms of the Agreement and a representation by the parties that the sale or
assignment was lawful.  Such sale or assignment will be recognized as of the
date of such notice, except that if such date is more than 30 days prior to the
time of filing, such sale or assignment will be recognized as of the time the
notice was filed with the Partnership.  Distributions of Partnership Revenue
will be made only to those persons who were record owners of Units on the
day any such distribution is made (see "RISK FACTORS -- Tax Related Risks -
Disproportionate Tax Liability upon Transfer").

      Substituted Limited Partners.  No Limited Partner has the right to
substitute an assignee as a Limited Partner in his or her place.  The General
Partner, however, has the right in its sole discretion to permit such assignee
to become a Substituted Limited Partner and any such permission by the General
Partner is binding and conclusive without the consent or approval of any Limited
Partner.  Any Substituted Limited Partner must, as a condition to receiving
any interest of the Limited Partner, agree in writing to be bound by the terms
and conditions of the Partnership Agreement, pay or agree to pay the costs and
expenses incurred by the Partnership in taking the actions necessary in
connection with his or her substitution as a Limited Partner and satisfy the
other conditions specified in Article XIII of the Partnership Agreement.

      Assignments by the General Partner.  The General Partner may not sell,
assign, transfer or otherwise dispose of its interest in the Partnership except
with the prior consent of a majority in interest of the Limited Partners,
provided that no such consent is required if the sale, assignment or transfer is
pursuant to a bona fide merger, other corporate reorganization or complete
liquidation, sale of substantially all of the General Partner's assets
(provided the purchasers agree to assume the duties and obligations of the
General Partner) or any sale or transfer to UNIT or any affiliate of UNIT.  Any
consent of the Limited Partners will not be effective without an opinion of
Conner & Winters to the Partnership or an order or judgment of a court of
competent jurisdiction to the effect that the exercise of such right will not
be deemed to evidence that the Limited Partners are taking part in the
management of the Partnership's business and affairs and will not result in a
loss of any Limited Partner's limited

                                     84

<PAGE>
liability or cause the Partnership to be classified as an association taxable as
a corporation for federal income tax purposes (see Section 12.1 of the
Agreement).  Any transferee of the General Partner's interest may become a
substitute General Partner by assuming and agreeing to perform all of the duties
and obligations of a General Partner under the Agreement.  In such event, the
transferring General Partner, upon making a proper accounting to the substitute
General Partner, will be relieved of any further duties or obligations with
respect to any future Partnership operations.

Amendments

      The Agreement may be amended upon the approval by a majority in interest
of the Limited Partners, except that amendments changing the Partners'
participation in costs and revenues, increasing or decreasing the General
Partner's compensation or otherwise materially and adversely affecting the
interests of either the Limited Partners or the General Partner must be approved
by all Limited Partners if their interests would be adversely affected
thereby or by the General Partner if its interest would be adversely affected
thereby.  The Limited Partners have no right to propose amendments to the
Agreement.

 Voting Rights

      Under the Agreement, the Limited Partners will have very limited rights to
vote on any Partnership matters.  Except for certain special amendments referred
to under "Amendments" above, matters submitted to the Limited Partners for
determination will be determined by the affirmative vote of Limited Partners
holding a majority of the outstanding Units.  Units held by the General Partner
may be voted by it.

      Generally, Limited Partners owning more than 50% of the outstanding Units
of the Partnership may, without the necessity of concurrence by the General
Partner, vote to:

      .    Approve the execution or delivery of any assignment for the benefit
           of the Partnership's creditors;

      .    Approve the sale or disposal of all or substantially all of the
           Partnership's assets, except pursuant to (i) a rollup or
           consolidation of the Partnership (see "Rollup or Consolidation of the
           Partnership" above) or (ii) termination (see "Termination" below);

      .    Approve the General Partner's sale, assignment, transfer or disposal
           of its interest in the Partnership, unless such sale, assignment or
           transfer is pursuant to (i) a merger or other corporate
           reorganization, or liquidation or sale of substantially all of its
           assets, and the purchaser agrees to assume the duties and obligations
           of the General Partner, or (ii) any sale to UNIT or its affiliates;

      .    Terminate and dissolve the Partnership; or

      .    Approve any amendments to the Agreement which may be proposed by the
           General Partner;

                                     85

<PAGE>
provided, however, any approvals, consents or elections of the Limited Partners
will not become effective unless prior to the exercise thereof the General
Partner is furnished with an opinion of Conner & Winters for the Partnership, or
an order or judgment of any court of competent jurisdiction, that the exercise
of such rights:

      .    Will not be deemed to evidence that the Limited Partners are taking
           part in the control or management of the Partnership's business
           affairs;

      .    Will not result in the loss of any Limited Partner's limited
           liability under the Act; and

      .    Will not result in the Partnership being classified as an association
           taxable as a corporation for federal income tax purposes.

Exculpation and Indemnification of the General Partner

      Pursuant to the Agreement, neither the General Partner or any affiliate
thereof will have any liability to the Partnership or to any Partners therein
for any loss suffered by the Partnership or such Partner that arises out of any
action or inaction of the General Partner or any affiliate thereof if the
General Partner or affiliate hereof in good faith determined that such course of
conduct was in the best interest of the Partnership, the General Partner or
affiliate was acting on behalf of or performing services for the Partnership,
such liability or loss was not the result of gross negligence or willful
misconduct by the General Partner or affiliates thereof, and payments arising
from such indemnification or agreement to hold harmless are receivable only out
of the tangible net assets of the Partnership.

Termination

      The Partnership will terminate automatically on December 31, 2032.  In
 addition, upon the dissolution (other than pursuant to a merger, or other
corporate reorganization or sale), bankruptcy, legal disability or withdrawal
of the General Partner, the Partnership shall immediately be dissolved and
terminated.  The Act provides, however, that the Limited Partners may elect to
reform and reconstitute themselves as a limited partnership within 90 days after
such dissolution under the provisions in the Partnership Agreement or under any
other terms.  The Partnership may terminate sooner if a majority in interest of
the Limited Partners or the General Partner elects to dissolve and terminate the
Partnership as of an earlier date.  Such right to accelerate termination of the
Partnership by the Limited Partners will not be available unless prior to any
exercise thereof the Limited Partners proposing such termination obtain and
furnish to the General Partner an opinion, order or judgment in the form
referred to above under "Transferability of Interests - Assignments by the
General Partner."  The withdrawal, expulsion, dissolution, death, legal
disability, bankruptcy or insolvency of any Limited Partner will not effect a
dissolution or termination of the Partnership.  In the event of an election to
terminate the Partnership prior to expiration of its stated terms, 90 days'
prior written notice must be given to all Partners specifying the termination
date which must be the last day of a calendar month following such 90 day period
unless an earlier date is approved by Limited Partners holding a majority of the
outstanding Units.

      When the Partnership is terminated, there will be an accounting with
respect to its assets, liabilities and accounts.  The Partnership's physical
property and its oil and gas properties may be sold for cash.  Except in the
case of an election by the General Partner to terminate the Partnership before
the tenth anniversary of the Effective Date, Partnership Properties may be sold
to the General Partner or any of its affiliates for their fair market value
as determined in good faith by the General Partner.

                                     86

<PAGE>
      Upon termination, all of the Partnership's debts, liabilities and
 obligations, including expenses incurred in connection with the termination and
the sale or distribution of Partnership assets, will be paid.  All Partnership
borrowings will be paid in full.  When the specified payments have all been
made, the remaining cash and properties of the Partnership, if any, will be
distributed to the Partners as set forth under "Partnership Distributions" above
(see Section 16.4 of the Agreement).  Such distribution will result in the
Limited Partners' having unlimited liability with respect to any Partnership
Properties distributed to them.

Insurance

      The General Partner will use its best efforts to obtain such insurance as
it deems prudent to serve as protection against liability for loss and damage.
Such insurance may include, but is not limited to, public liability, automotive
liability, workers' compensation and employer's liability insurance and blowout
and control of well insurance.

                                    COUNSEL

      Conner & Winters, P.C., 3700 First Place Tower, Tulsa, Oklahoma, has acted
as special counsel to the General Partner in connection with certain aspects of
this offering.  Conner & Winters has assisted in the preparation of the
Agreement and this Memorandum.  In connection with the preparation of this
Memorandum, Conner & Winters has relied entirely upon information submitted to
it by the General Partner.  Certain of this information has been verified by
Conner & Winters in the course of its representation, but no systematic effort
has been made to verify all of the material information contained herein, and
much of such information is not subject to independent verification.  In
addition, Conner & Winters has made no
independent investigation of the financial information concerning the General
Partner.  Further, while passing on certain legal matters, Conner & Winters has
not passed on the investment merits nor is it qualified to do so.  Because
substantial portions of the information contained in this Memorandum have not
been independently verified, each investor must make whatever independent
inquiries the investor or his or her advisors deem necessary or desirable to
verify or confirm the statements made herein.

                                    GLOSSARY

      As used herein and in the Agreement, the following terms and phrases will
have the meanings indicated.

      (a)  "Additional Assessments" are amounts required to be contributed by
the Limited Partners to the Partnership upon a call therefore by the General
Partner in the manner described under "ADDITIONAL FINANCING -- Additional
Assessments."

      (b)  An "affiliate" of another person is (1) any person directly or
indirectly owning, controlling or holding with power to vote 10% or more of the
outstanding voting securities of such other person; (2) any person 10% or more
of whose outstanding voting securities are directly or indirectly owned,
controlled, or held with power to vote, by such other person; (3) any person
directly or indirectly controlling, controlled by, or under common control with
such other person; (4) any officer, director, trustee or partner of such other
person; and (5) if such other person is an officer, director, trustee or
partner, any company for which such person acts in any such capacity.

                                     87
<PAGE>
      (c)  The "Aggregate Subscription" is the sum of the Capital Subscriptions
of all Limited Partners.

      (d)  "Agreement" and "Partnership Agreement" refers to the Agreement of
Limited Partnership attached as Exhibit A to this Private Offering Memorandum.

      (e)  The "Capital Contribution" of a Limited Partner is the amount of the
Capital Subscription actually paid in by him or her, or by any predecessor in
interest, to the capital of the Partnership including any payments made by
deductions from salary.  The "Capital Contribution" of the General Partner
includes the amounts contributed to the Partnership or paid by the General
Partner or by any Limited Partner whose Units are purchased by the General
Partner pursuant to Section 4.2 of the Agreement because of a default by such
Limited Partner in the payment of an Installment or pursuant to Article XV of
the Agreement, including payments made by deductions from the salary of such
Limited Partner.

      (f)  The "Capital Subscription" of a Limited Partner or his or her
assignee (including the General Partner where Units are transferred pursuant to
Section 4.2 of the Agreement) is the amount specified in the Subscription
Agreement executed by such Limited Partner for payment by him or her to the
capital of the Partnership in accordance with the provisions of the Agreement,
reduced by the amounts thereof from which the Limited Partners have been
released by the General Partner of their obligation to pay.

      (g)  A "Development Well" means a well intended to be drilled within the
proved areas of a known oil or gas reservoir to the depth of a stratigraphic
horizon known to be productive.

      (h)  "Director" refers to the duly elected directors of UNIT as well as
all honorary directors and consultants to the Board of Directors of UNIT.

      (i)  "Drilling Costs" are those costs incurred in drilling, testing,
completing and equipping a well to the point that it proves to be dry and is
abandoned or is ready to commence commercial production of oil or gas therefrom.

      (j)  "Effective Date" refers to the date on which the certificate
evidencing formation of the Partnership is filed with the Secretary of
State of the State of Oklahoma as required by the Act (54 Okla. Stat.  1991,
Section 309).

      (k)  An "Exploratory Well" means a well drilled to find production in an
unproven area, to find a new reservoir in a field previously found to be
productive or to extend greatly the limits of a known reservoir.

      (l)  A "farm-out" is an agreement whereby the owner of an oil and gas
property agrees to assign such property, usually retaining some interest therein
such as an overriding royalty, a production payment, a net profits interest or
a carried working interest, subject in most cases, however, to the drilling of
one or more wells or other performance by the prospective assignee as a
condition of the assignment.

      (m)  The "General Partner's Minimum Capital Contribution" is that amount
equal to the total of (i) all Partnership costs and expenses charged to its
account from the time of the formation of the Partnership through December 31,
2002, plus (ii) the General Partner's estimate of the total Leasehold

                                     88

<PAGE>
Acquisition Costs and Drilling Costs expected to be incurred by the Partnership
subsequent to December 31, 2002, if any, minus (iii) the amount, if any, of the
unexpended Aggregate Subscription at December 31, 2002.

      (n)  The "General Partner's Percentage" is that percentage determined by
dividing the amount of the General Partner's Minimum Capital Contribution by the
total of (i) the General Partner's Minimum Capital Contribution plus (ii) the
Aggregate Subscription.

      (o)  "Installments" refer to the periodic payments of the Capital
Subscription, which are payable either (i) in four equal installments due on
March 15, 2002, June 15, 2002, September 15, 2002 and December 15, 2002,
respectively, or (ii) if an employee so elects, through equal deductions from
2001 salary commencing immediately after formation of the Partnership.

      (p)  "Leasehold Acquisition Costs" with respect to properties, if any,
acquired by the Partnership from non-affiliated parties mean the actual costs to
the Partnership of and in acquiring the properties, and, with respect to
properties acquired by the Partnership from the General Partner, UNIT or its
affiliates are, without duplication, the sum of:

      (1)  the prices paid by the General Partner, UNIT or its affiliates in
           acquiring an oil and gas property, including purchase option fees
           and charges, bonuses and penalties, if any;

      (2)  title insurance or examination costs, broker's commissions, filing
           fees, recording costs, transfer taxes, if any, and like charges
           incurred in connection with the acquisition of such property;

      (3)  a pro rata portion of the actual, necessary and reasonable expenses
           of the General Partner, UNIT or its affiliates for seismic and
           geophysical services;

      (4)  rentals, shut-in royalties and ad valorem taxes paid by the General
           Partner, UNIT or its affiliates with respect to such property to the
           date of its transfer to the Partnership;

      (5)  interest and points actually incurred on funds used by the General
           Partner, UNIT or its affiliates to acquire or maintain such property;
           and

      (6)  such portion of the General Partner's, UNIT or its affiliates'
           reasonable, necessary and actual expenses for geological,
           engineering, drafting, accounting, legal and other like services
           allocated to the acquisition, operations and maintenance of the
           property in accordance with generally accepted industry practices,
           except for expenses in connection with the past drilling of wells
           which are not producers of sufficient quantities of oil or gas to
           make commercially reasonable their continued operations, and provided
           that the costs and expenses enumerated in (4), (5) and (6) above with
           respect to any particular property shall have been incurred not more
           than thirty-six (36) months prior to the acquisition of such property
           by the Partnership.

                                     89

In the event a fractional undivided interest in a property is sold or
transferred by the General Partner, UNIT or any affiliate to an unaffiliated
third party for an amount in excess of that portion of the original cost of the
property attributable to the transferred interest, the amount of such excess
shall not reduce or be offset against the amount of the Leasehold Acquisition
Costs attributable to any interest in the same property which is transferred to
the Partnership.

      (q)  "Limited Partners" are those persons who acquire Units in the
Partnership upon its formation and those transferees of Units who are accepted
as Substituted Limited Partners.  The General Partner may also be a Limited
Partner if it subscribes for Units or if it subsequently acquires Units by (i)
the exercise by a Limited Partner of his or her right of presentment; (ii) a
purchase by the General Partner of the Units of a Limited Partner who defaults
in the payment of an Installment; or (iii) any other assignment or transfer.

      (r)  The "Limited Partners' Percentage" is that percentage determined by
dividing the amount of the Aggregate Subscription by the total of (i) the
General Partner's Minimum Capital Contribution plus (ii) the Aggregate
Subscription.

      (s)  "Normal Retirement" means retirement under the terms of a pension or
similar retirement plan adopted by the General Partner, UNIT or any subsidiary
with whom a Limited Partner is employed as in effect at the time of retirement.

      (t)  "Oil and gas properties" are oil and gas leasehold working interests,
fee interests, mineral interests, royalty interests, overriding royalty
interests, production payments, options or rights to lease or acquire such
interests, geophysical exploration permits and any tangible or intangible
properties or other rights incident thereto, whether real, personal or mixed.

      (u)  "Operating Expenses" are expenditures made and costs incurred in
producing and marketing oil or gas from completed wells, including, in addition
to labor, fuel, repairs, hauling, material, supplies, utility charges and other
costs incident to or necessary for the maintenance or operation of such wells
or the marketing of production therefrom, ad valorem, severance and other such
taxes (other than windfall profit taxes), insurance and casualty loss expense
and compensation to well operators or others for services rendered in conducting
such operations.

      (v)  The General Partner and the Limited Partners are sometimes
collectively referred to as the "Partners."

      (w)  "Partnership Agreement" and "Agreement" refer to the Agreement of
Limited Partnership attached as Exhibit A to this Private Offering Memorandum.

      (x)  The "Partnership Properties" are oil and gas properties or interests
therein acquired by the Partnership or properties acquired by any partnership or
joint venture in which the Partnership is a partner or joint venturer, whether
acquired by purchase, option exercise or otherwise.

      (y)  "Partnership Revenue" refers to the Partnership's gross revenues from
all sources, including interest income, proceeds from sales of production, the
Partnership's share of revenues from partnerships or joint ventures of which it
is a member, sales or other dispositions of Partnership Properties or other
Partnership assets, provided that contributions to Partnership capital by the
Partners and the proceeds of any Partnership borrowings are specifically
excluded and dry-hole and bottom-hole

                                     90
<PAGE>
contributions shall be treated as reductions of the costs giving rise to the
right to receive such contributions.

      (z)  "Partnership Wells" are any and all of the oil and gas wells in which
the Partnership has an interest, either directly or indirectly through any other
partnership or joint venture.

      (aa) "Productive properties" are oil and gas properties that have been
tested by drilling and determined to be capable of producing oil or gas in
commercial quantities.

      (bb) A "spacing unit" is a drilling and spacing, production or similar
unit established by any regulatory body with jurisdiction, or in the absence of
such a regulatory body or action thereby, the acreage attributable to wells
drilled under the normal spacing pattern in such area or if no such spacing unit
is designated, in keeping with generally accepted industry practices, or the
largest of such units in the event of multiple objective formations.

      (cc) "Special Production and Marketing Costs" are costs and expenses that
are not normally and customarily incurred in connection with drilling, producing
and marketing operations, including without limitation, costs incurred in
constructing compressor plants, gasoline plants, gas gathering systems, natural
gas processing plants, pipeline systems and salt water disposal systems and
costs incurred in installing pressure maintenance and secondary or tertiary
production projects.

      (dd) "Subscription Agreement" refers to the form of Limited Partner
 Subscription Agreement and Suitability Statement attached as Attachment I to
the Partnership Agreement.

      (ee) A "Substituted Limited Partner" is a transferee, donee, heir, legatee
or other recipient of all or any portion of a Limited Partner's interest in the
Partnership with respect to whom all conditions and consents required to become
a Substituted Limited Partner under Article XIII of the Partnership Agreement
have been satisfied and given.

      (ff) A "Unit" is a preformation unit of limited partnership interest of a
Limited Partner in the Partnership representing a Capital Subscription of One
Thousand Dollars ($1,000).

                              FINANCIAL STATEMENTS

      On January 1, 1988 all of the oil and natural gas properties previously
owned by Unit Drilling and Exploration Company ("UDEC") and UNIT were
transferred into Sunshine Development Company through a contribution of capital.
Included in the transfer were all interests previously owned by UDEC in
numerous General and Limited Partnerships sponsored by UDEC.  Effective February
1, 1988, Sunshine Development Company, a wholly owned subsidiary of UDEC,
pursuant to an "Amended and Restated Certificate of Incorporation" was
renamed Unit Petroleum Company and became a wholly owned subsidiary of UNIT.

      Unit Petroleum Company functions as the operating entity for all oil and
natural gas exploration and production activities including operating any
partnerships for UNIT.

      The consolidated balance sheet of Unit Petroleum Company at
October 31, 2001 is unaudited and includes all adjustments which UNIT considers
necessary for a fair presentation of the financial position of Unit Petroleum
Company at October 31, 2001.
                                     91

<PAGE>
                     Unit Petroleum Company and Subsidiary
                          Consolidated Balance Sheet
                               (In Thousands)
                                                          October 31,
                                                              2001
                                                          (Unaudited)
                               Assets
                               ------
 Current Assets:
     Cash and cash equivalents                             $    465
     Trade accounts receivable                                7,194
     Materials and supplies, at lower of cost or market       3,565
     Other                                                      223
                                                           --------
             Total current assets                            11,447
                                                           --------
 Property and Equipment:
     Oil and natural gas properties,
       on the full cost method                              395,822
     Other                                                      477
                                                           --------
                                                            396,299
                                                           --------

     Less accumulated depreciation, depletion,
        amortization and impairment                         193,650
                                                           --------
             Net property and equipment                     202,649
                                                           --------
 Other Assets                                                    60
                                                           --------
 Total Assets                                              $214,156
                                                           ========

                Liabilities and Shareholders' Equity
                ------------------------------------
 Current Liabilities:
     Current portion of natural gas purchaser
       prepayments                                         $    437
     Accounts payable                                         7,805
     Accounts payable to parent                              46,661
     Contract advances                                          608
     Accrued liabilities                                      1,237
                                                           --------
             Total current liabilities                       56,748
                                                           --------
 Shareholders' Equity:
     Common stock, $1.00 par value, 500 shares
        authorized and outstanding                                1
     Capital in excess of par value                          31,543
     Accumulated other comprehensive income                     159
     Retained earnings                                      125,705
                                                           --------
             Total shareholders' Equity                     157,408
                                                           --------
 Total Liabilities and Shareholders' Equity                $214,156
                                                           ========

                                     92
<PAGE>

                                   EXHIBIT A

              UNIT 2002 EMPLOYEE OIL AND GAS LIMITED PARTNERSHIP
                         AGREEMENT OF LIMITED PARTNERSHIP

                                     A-1

<PAGE>
                                    INDEX

ARTICLE I Formation of Limited Partnership...............................   3

ARTICLE II Definitions...................................................   4

ARTICLE III Purposes and Powers of the Partnership.......................   8

ARTICLE IV Partner Capital Contributions.................................  10

ARTICLE V Deposit and Use of Capital Contributions and
          Other Partnership Funds........................................  12

ARTICLE VI Sharing of Costs, Capital Accounts and Allocation of
           Charges and Income............................................  13

ARTICLE VII Fiscal Year, Accountings and Reports.........................  18

ARTICLE VIII Tax Returns and Elections...................................  19

ARTICLE IX Distributions.................................................  19

ARTICLE X Rights, Duties and Obligations of the General Partner..........  20

ARTICLE XI Compensation and Reimbursements...............................  25

ARTICLE XII Rights and Obligations of Limited Partners...................  26

ARTICLE XIII Transferability of Limited Partner's Interest...............  27

ARTICLE XIV Assignments by the General Partner...........................  29

ARTICLE XV Limited Partners' Right of Presentment........................  30

ARTICLE XVI Termination and Dissolution of Partnership...................  32

ARTICLE XVII Notices.....................................................  34

ARTICLE XVIII Amendments.................................................  34

ARTICLE XIX General Provisions...........................................  34

ATTACHMENT I   Limited Partner Subscription Agreement
               and Suitability Statement                                  I-1

                                     A-2

<PAGE>
               UNIT 2002 EMPLOYEE OIL AND GAS LIMITED PARTNERSHIP
                       AGREEMENT OF LIMITED PARTNERSHIP

     THIS AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement") is made and
entered into by and among Unit Petroleum Company, an Oklahoma corporation,
hereinafter referred to as the "General Partner" or "UPC" (which term shall
include any successors or assigns of UPC), and each of those persons who have
executed a counterpart of the Limited Partner Subscription Agreement and
Suitability Statement attached as Attachment I to this Agreement that have been
accepted by the General Partner, said persons being hereinafter collectively
referred to as the "Limited Partners".

     WITNESSETH THAT:

                                   ARTICLE I
                       Formation of Limited Partnership

     1.1 The parties to this Agreement hereby form a Limited Partnership (the
"Partnership") pursuant to the Revised Uniform Limited Partnership Act of the
State of Oklahoma (the "Act").  The terms and provisions hereof will be
construed and interpreted in accordance with the terms and provisions of the Act
and if any of the terms and provisions of this Agreement should be deemed
inconsistent with those terms and provisions of the Act which under the Act may
not be altered by agreement of the parties, the Act will be controlling, but
otherwise this Agreement will be controlling.

     1.2 The Partnership will be conducted under the name of "Unit 2002 Employee
Oil and Gas Limited Partnership" in Oklahoma, and under such name or variations
of such name as the General Partner deems appropriate to comply with the laws of
the other jurisdictions in which the Partnership does business.

     1.3 The principal office of the Partnership will be 1000 Kensington Tower
I, 7130 South Lewis Avenue, P.O. Box 702500, Tulsa, Oklahoma 74136, or at such
other location as may from time to time be designated by the General Partner,
and the Partnership's agent for service of process shall be Unit Corporation
("UNIT", which term shall include all or any of its subsidiaries or affiliates
unless the context otherwise requires) at the same address.

     1.4 The Partnership will be effective on the date on which the certificate
evidencing formation of the Partnership is filed with the Secretary of State of
the State of Oklahoma.  Its business and operations will not be commenced prior
to such date.  The Partnership will continue in existence until December 31,
2032, unless sooner terminated pursuant to any provisions of this Agreement.

     1.5 The parties hereto will execute such certificates and other documents,
and the General Partner will file, record and publish such certificates and
documents, as may be necessary or appropriate to comply with the requirements
for the formation and operation of a

                                     A-3

<PAGE>
limited partnership under the Act and as the General Partner, upon advice of
counsel, deems necessary or appropriate to comply with requirements of
applicable laws governing the formation and operations of a limited partnership
(or a partnership in which special partners have a limited liability) in all
other jurisdictions where the Partnership desires to conduct business,
including, but not limited to, filings under the Fictitious Name Act, Assumed
Name Act or similar law in effect in the counties, parishes and other
governmental jurisdictions in which the Partnership conducts business.  The
General Partner shall not be required to deliver or mail a copy of the
certificate of limited partnership or any amendments thereto filed pursuant to
the Act to the Limited Partners.

     1.6 Each Limited Partner by his or her execution of a counterpart of the
Subscription Agreement irrevocably constitutes and appoints the General Partner
such Limited Partner's true and lawful attorney and agent, with full power and
authority in such Limited Partner's name, place and stead, to execute, sign,
acknowledge, swear to, deliver, file and record in the appropriate public
offices (i) all certificates or other instruments (including, without
limitation, counterparts of this Agreement) and amendments thereto which the
General Partner deems appropriate to qualify or continue the Partnership as a
limited partnership (or a partnership in which special partners have limited
liability) in the jurisdictions in which the Partnership conducts business; (ii)
all instruments and amendments thereto which the General Partner deems
appropriate to reflect any change or modification of this Agreement, the
admission of additional or substitute Partners in accordance with the terms of
this Agreement, the release or waiver of the Limited Partners from the
obligation to pay in one or more of the installments of their Capital
Subscriptions pursuant to Section 4.2 below and the termination of the
Partnership and the cancellation of the certificate of limited partnership;
(iii) all conveyances and other instruments which the General Partner deems
appropriate to evidence and reflect any sales or transfers, including sales or
transfers upon or in connection with the dissolution and termination of the
Partnership; and (iv) all consents to transfers of Partnership interests, to the
admission of substitute or additional Partners or to the withdrawal or reduction
of any Partner's invested capital, to the extent that such actions are
authorized by the terms of this Agreement.  The Power of Attorney granted herein
is irrevocable and is a power coupled with an interest and will survive the
death, disability, dissolution, bankruptcy, insolvency or incapacity of a
Limited Partner.

                                   ARTICLE II
                                  Definitions

     2.1 Whenever used in this Agreement the following terms will have the
meanings described below:

          (a)  The "Additional Assessments" of the Limited Partners are those
     amounts, if any, which they are required to pay into the capital of the
     Partnership pursuant to Section 5.3 of this Agreement.

          (b)  An "affiliate" of another person is (1) any person directly or
     indirectly owning, controlling or holding with power to vote 10% or more of
     the outstanding voting securities of such other person; (2) any person 10%
     or more of whose outstanding voting

                                     A-4

<PAGE>
     securities are directly or indirectly owned, controlled, or held with power
     to vote, by such other person; (3) any person directly or indirectly
     controlling, controlled by, or under common control with such other person;
     (4) any officer, director, trustee or partner of such other person; and (5)
     if such other person is an officer, director, trustee or partner, any
     company for which such person acts in any such capacity.

          (c)  The "Aggregate Subscription" is the sum of the Capital
     Subscriptions of all Limited Partners.

          (d)  The "Capital Contribution" of a Limited Partner is the amount of
     the Capital Subscription actually paid in by him or her, or by any
     predecessor in interest, to the capital of the Partnership, including any
     payments made by deductions from salary.  The "Capital Contribution" of the
     General Partner includes the amounts contributed to the Partnership or paid
     by the General Partner or by any Limited Partner whose Units are purchased
     by the General Partner including purchases pursuant to Section 4.2 of this
     Agreement because of a default by such Limited Partner in the payment of a
     subscription installment or pursuant to Article XV of this Agreement,
     including payments made by deductions from the salary of such Limited
     Partner.

          (e)  The "Capital Subscription" of a Limited Partner or his or her
     assignee (including the General Partner where Units are transferred
     pursuant to Section 4.2 of this Agreement) is the amount specified in the
     Subscription Agreement executed by such Limited Partner for payment by him
     or her to the capital of the Partnership in accordance with the provisions
     of this Agreement, reduced by the amount thereof from which the Limited
     Partner has been released by the General Partner of his or her obligation
     to pay pursuant to Section 4.2 hereof.

          (f)  "Drilling Costs" are those costs incurred in drilling, testing,
     completing and equipping a Partnership Well to the point that it proves to
     be dry and is abandoned or is ready to commence commercial production of
     oil or gas therefrom.

          (g)  "Effective Date" refers to the date on which the certificate
     evidencing formation of the Partnership is filed with the Secretary of
     State of the State of Oklahoma as required by the Act (54 Okla. Stat. 1991,
     Section 309).

          (h)  A "farm-out" is an agreement whereby the owner of an oil and gas
     property agrees to assign such property, usually retaining some interest
     therein such as an overriding royalty, a production payment, a net profits
     interest or a carried working interest, subject in most cases, however, to
     the drilling of one or more wells or other performance by the prospective
     assignee as a condition of the assignment.

          (i)  The "General Partner's Minimum Capital Contribution" is that
     amount equal to the total of (i) all Partnership costs and expenses charged
     to its account from the time of the formation of the Partnership through
     December 31, 2002, plus (ii) the General Partner's estimate of the total
     Leasehold Acquisition Costs and Drilling Costs expected

                                     A-5

<PAGE>
     to be incurred by the Partnership subsequent to December 31, 2002, minus
     (iii) the amount, if any, of the unexpended Aggregate Subscription at
     December 31, 2002.

          (j)  The "General Partner's Percentage" is that percentage determined
     by dividing the amount of the General Partner's Minimum Capital
     Contribution by the total of (i) the General Partner's Minimum Capital
     Contribution plus (ii) the Aggregate Subscription.

          (k)  "Leasehold Acquisition Costs" with respect to properties, if any,
     acquired by the Partnership from non-affiliated parties mean the actual
     costs to the Partnership of and in acquiring the properties, and, with
     respect to properties acquired by the Partnership from the General Partner,
     UNIT or its affiliates, are, without duplication, the sum of:  (1) the
     prices paid by the General Partner, UNIT or its affiliates in acquiring an
     oil and gas property, including purchase option fees and charges, bonuses
     and penalties, if any; (2) title insurance or examination costs, broker's
     commissions, filing fees, recording costs, transfer taxes, if any, and like
     charges incurred in connection with the acquisition of such property; (3) a
     pro rata portion of the actual, necessary and reasonable expenses of the
     General Partner, UNIT or its affiliates for seismic and geophysical
     services; (4) rentals, shut-in royalties and ad valorem taxes paid by the
     General Partner, UNIT or its affiliates with respect to such property to
     the date of its transfer to the Partnership; (5) interest and points
     actually incurred on funds used by the General Partner, UNIT or its
     affiliates to acquire or maintain such property; and (6) such portion of
     the General Partner's, UNIT's or its affiliates' reasonable, necessary and
     actual expenses for geological, engineering, drafting, accounting, legal
     and other like services allocated to the acquisition, operations and
     maintenance of the property in accordance with generally accepted industry
     practices, except for expenses in connection with the past drilling of
     wells which are not producers of sufficient quantities of oil or gas to
     make commercially reasonable their continued operations, and provided that
     the costs and expenses enumerated in (4), (5) and (6) above with respect to
     any particular property shall have been incurred not more than thirty-six
     (36) months prior to the acquisition of such property by the Partnership.
     In the event a fractional undivided interest in a property is sold or
     transferred by the General Partner, UNIT or any affiliate to an
     unaffiliated third party for an amount in excess of that portion of the
     original cost of the property attributable to the transferred interest, the
     amount of such excess shall not reduce or be offset against the amount of
     the Leasehold Acquisition Costs attributable to any interest in the same
     property which is transferred to the Partnership.

          (l)  "Limited Partners" are those persons who acquire Units in the
     Partnership upon its formation and those transferees of Units who are
     accepted as Substituted Limited Partners.  The General Partner may also be
     a Limited Partner if it subscribes for Units or if it subsequently acquires
     Units by (i) the exercise by a Limited Partner of his or her right of
     presentment; (ii) a purchase by the General Partner of the Units of a
     Limited Partner who defaults in the payment of any subscription
     installment; or (iii) any other assignment or transfer.

                                     A-6

<PAGE>
          (m)  The "Limited Partners' Percentage" is that percentage determined
     by dividing the amount of the Aggregate Subscription by the total of (i)
     the General Partner's Minimum Capital Contribution plus (ii) the Aggregate
     Subscription.

          (n)  "Normal Retirement" means retirement under the provision of a
     pension or similar retirement plan adopted by the General Partner, UNIT or
     any subsidiary with whom a Limited Partner is employed as in effect at the
     time of the employee's retirement.

          (o)  "Oil and gas properties" are oil and gas leasehold working
     interests, fee interests, mineral interests, royalty interests, overriding
     royalty interests, production payments, options or rights to lease or
     acquire such interests, geophysical exploration permits and any tangible or
     intangible properties or other rights incident thereto, whether real,
     personal or mixed.

          (p)  "Operating Expenses" are expenditures made and costs incurred in
     producing and marketing oil or gas from completed wells, including, in
     addition to labor, fuel, repairs, hauling, material, supplies, utility
     charges and other costs incident to or necessary for the maintenance or
     operation of such wells or the marketing of production therefrom, ad
     valorem, severance and other such taxes (other than windfall profit taxes),
     insurance and casualty loss expense and compensation to well operators or
     others for services rendered in conducting such operations.

          (q)  The General Partner and the Limited Partners are sometimes
     collectively referred to as the "Partners".

          (r)  The "Partnership Properties" are oil and gas properties or
     interests therein acquired by the Partnership or properties acquired by any
     partnership or joint venture in which the Partnership is a partner or joint
     venturer, whether acquired by purchase, option exercise or otherwise.

          (s)  "Partnership Revenue" refers to the Partnership's gross revenues
     from all sources, including interest income, proceeds from sales of
     production, the Partnership's share of revenues from partnerships or joint
     ventures of which it is a member, sales or other dispositions of
     Partnership Properties or other Partnership assets, provided that
     contributions to Partnership capital by the Partners and the proceeds of
     any Partnership borrowings are specifically excluded and dry-hole and
     bottom-hole contributions shall be treated as reductions of the costs
     giving rise to the right to receive such contributions.

          (t)  "Partnership Wells" are any and all of the oil and gas wells in
     which the Partnership has an interest, either directly or indirectly
     through any other partnership or joint venture.

          (u)  "Productive properties" are oil and gas properties that have been
     tested by drilling and determined to be capable of producing oil or gas in
     commercial quantities.

                                     A-7

<PAGE>
          (v)  "Special Production and Marketing Costs" are costs and expenses
     that are not normally and customarily incurred in connection with drilling,
     producing and marketing operations, including without limitation, costs
     incurred in constructing compressor plants, gasoline plants, gas gathering
     systems, natural gas processing plants, pipeline systems and salt water
     disposal systems and costs incurred in installing pressure maintenance and
     secondary or tertiary production projects.

          (w)  "Subscription Agreement" refers to the form of Limited Partner
     Subscription Agreement and Suitability Statement attached as Attachment I
     to this Agreement.

          (x)  A "Substituted Limited Partner" is a transferee, donee, heir,
     legatee or other recipient of all or any portion of a Limited Partner's
     interest in the Partnership with respect to whom all conditions and
     consents required to become a Substituted Limited Partner under Article
     XIII have been satisfied and given.

          (y)  A "Unit" is a preformation unit of limited partnership interest
     of a Limited Partner in the Partnership representing a Capital Subscription
     of One Thousand Dollars ($1,000).

                                 ARTICLE III
                    Purposes and Powers of the Partnership

     3.1 The purposes of the Partnership will be to acquire productive oil and
gas properties and to explore for, produce, treat, transport and market oil, gas
or both, or products derived therefrom, anywhere in the United States.  It is
contemplated that all or most of the Partnership's operations will be conducted
as part of the operations of the General Partner and its affiliates, but the
Partnership may engage in operations on its own or in conjunction with
unaffiliated third parties.  In accomplishing such purposes the Partnership may:

          (a)  acquire oil and gas properties, either alone or in conjunction
     with other parties;

          (b)  conduct geological and geophysical investigations, including,
     without limitation, seismic exploration, core drilling and other means and
     methods of exploration;

          (c)  drill, equip, complete, rework, reequip, recomplete, plug back,
     deepen, plug and abandon Partnership Wells as the General Partner deems
     advisable;

          (d)  acquire and dispose of tangible lease and well equipment for use
     or used in connection with Partnership Wells;

          (e)  employ or retain such personnel and obtain such legal,
     accounting, geological, geophysical, engineering and other professional
     services and advice as the

                                     A-8

<PAGE>
     General Partner may deem advisable in the course of the Partnership's
     operations under this Agreement;

          (f)  either pay or elect not to pay delay rentals or shut-in royalties
     on Partnership Properties as appropriate in the judgment of the General
     Partner, it being understood that the General Partner will not be liable
     for failure to make correct or timely payments of delay rentals or shut-in
     royalties if such failure was due to any reason other than gross negligence
     or lack of good faith;

          (g)  make or give dry-hole or bottom-hole or other contributions of
     oil and gas properties, money or both, to encourage drilling by others in
     the vicinity of or on Partnership Properties;

          (h)  negotiate for and accept dry-hole, bottom-hole or other
     contributions of oil and gas properties, cash or both, as consideration for
     the drilling of a Partnership Well, with oil and gas properties so
     acquired, if any, to become Partnership Properties;

          (i)  pay all ad valorem taxes levied or assessed against the
     Partnership Properties, all taxes upon or measured by the production of oil
     or gas or other hydrocarbons therefrom, and all other taxes (other than
     income taxes) directly relating to operations conducted under this
     Agreement;

          (j)  enter into and operate pursuant to operating agreements with
     respect to Partnership Properties naming either the General Partner, any of
     its affiliates or a third party as operator, or enter into partnership
     agreements with third parties whereby the Partnership may be either a
     general or a limited partner (including any partnerships formed or
     sponsored by the General Partner or in which the General Partner may also
     be a partner), which operating or partnership agreements shall contain such
     terms, provisions and conditions as the General Partner deems appropriate;

          (k)  execute all documents or instruments of any kind which the
     General Partner deems appropriate for carrying out the purposes of the
     Partnership, including, without limitation, unitization agreements,
     gasoline plant contracts, recycling agreements and agreements relating to
     pressure maintenance and secondary or tertiary production projects;

          (l)  purchase and establish inventories of equipment and material
     required or expected to be required in connection with its operations;

          (m)  contract or enter into agreements with unaffiliated third
     parties, the General Partner or its affiliates for the performance of
     services and the purchase and sale of material, equipment, supplies and
     property, both real and personal, provided, however, that any such
     contracts or agreements with the General Partner or any of its affiliates
     shall, except as otherwise provided herein, provide for prices, fees,
     rates, charges or other compensation which are not greater than those
     available from, being paid to or charged

                                     A-9

<PAGE>
     by unaffiliated third parties dealing at arm's length in the same or a
     similar geographic area for the same or comparable services, material,
     equipment, supplies or property;

          (n)  conduct operations either alone or as a joint venturer, co-
     tenant, partner or in any other manner of participation with third persons
     and to enter into agreements and contracts setting forth the terms and
     provisions of such participation;

          (o)  borrow money from banks and other lending institutions for
     Partnership purposes and pledge Partnership Properties (including
     production therefrom) for the repayment of such loans, it being understood
     that no bank or other lending institution to which the General Partner
     makes application for a loan will be required to inquire as to the purposes
     for which such loan is sought, and as between the Partnership and such bank
     or lending institution it will be conclusively presumed that the proceeds
     of such loan are to be and will be used for purposes authorized under the
     terms of this Agreement;

          (p)  hold Partnership Properties in its own name or in the name of the
     General Partner, UNIT or any affiliate or any other party as nominee for
     the Partnership;

          (q)  sell, relinquish, release, farm-out, abandon or otherwise dispose
     of Partnership Properties, including undeveloped, productive and condemned
     properties;

          (r)  produce, treat, transport and market oil and gas and execute
     division orders, contracts for the marketing or sale of oil, gas or other
     hydrocarbons and other marketing agreements;

          (s)  purchase, sell or pledge payments out of production from
     Partnership Properties; and

          (t)  perform any and all other acts or activities customary or
     incident to exploration for or development, production and marketing of oil
     and gas.

                                   ARTICLE IV
                          Partner Capital Contributions

     4.1 The General Partner will have the unrestricted right to admit such
parties as Limited Partners as it deems advisable.  By their execution of the
Subscription Agreement, the Limited Partners severally agree, subject to the
acceptance of their subscription by the General Partner, to be bound by the
terms hereof as Limited Partners.

     4.2 The Capital Subscriptions of the Limited Partners will be payable
either (i) in four equal installments on March 15, 2002, June 15, 2002,
September 15, 2002, and December 15, 2002, respectively, or (ii) by employees so
electing, through equal deductions from 2002 salary paid to the employee by the
General Partner, UNIT or its subsidiaries commencing immediately after the
Effective Date.  Notwithstanding the foregoing, if in the judgment of the
General Partner, the entire amount of the Aggregate Subscription is not required
for purposes of

                                     A-10

<PAGE>
conducting the business, operations and affairs of the Partnership, the General
Partner may, at its sole option, elect to release the Limited Partners from the
obligation to pay in one or more of the installments of their Capital
Subscriptions.  If Units are acquired by a corporation or other entity, the
beneficial owners of the interests therein shall be jointly and severally liable
for the payment of the Capital Subscription.  If an employee or director who has
subscribed for Units (either directly or through a corporation or other entity)
ceases to be employed by or a director of the General Partner, UNIT or any of
its subsidiaries for any reason other than death, disability or Normal
Retirement prior to the time the full amount of his or her Capital Subscription
is paid, then the due date for any unpaid amount shall be accelerated so that
the full amount of his or her unpaid Capital Subscription shall be due and
payable on the effective date of such termination.  The Capital Subscriptions
shall be legally binding obligations of the Limited Partners and any past due
amounts shall bear interest at the annual rate equal to two (2) percentage
points in excess of the prime rate of interest of Bank of Oklahoma, N.A., Tulsa,
Oklahoma, or successor bank, as announced and in effect from time to time, until
paid.  Further, in the event a Limited Partner fails to pay any installment when
due, the General Partner, at its sole option and discretion, may elect to
purchase the Units of such defaulting Limited Partner at a price equal to the
total amount of the Capital Contributions actually paid into the Partnership by
such defaulting Limited Partner, less the amount of any Partnership
distributions that may have been received by him or her.  Such option may be
exercised by the General Partner by written notice to the Limited Partner at any
time after the date that the unpaid installment was due and shall be deemed
exercised when the amount of the purchase price is first tendered to the
defaulting Limited Partner.  The General Partner may, in its discretion, accept
payments of delinquent installments but shall not be required to do so.  In the
event that the General Partner elects to purchase the Units of a defaulting
Limited Partner, it shall pay into the Partnership the amount of the delinquent
installment (excluding any interest that may have accrued thereon) and shall pay
each additional installment, if any, payable with respect to such Units as it
becomes due.  By virtue of such purchase, the General Partner shall be allocated
all Partnership Revenues and be charged with all Partnership costs and expenses
attributable to such Units otherwise allocable or chargeable to the defaulting
Limited Partner to the extent provided in Section 13.9.

     4.3 If the Partnership requires funds to conduct Partnership operations
during the period between any of the installments due as set forth in Section
4.2 above, then, notwithstanding the provisions of Section 5.4 below, the
General Partner shall advance funds to the Partnership in an amount equal to the
funds then required to conduct such operations but in no event more than the
total amount of the Aggregate Subscription remaining unpaid.  With respect to
any such advances, the General Partner shall receive no interest thereon and no
financing charges will be levied by the General Partner in connection therewith.
The General Partner shall be repaid out of the Capital Subscription installments
thereafter paid into the capital of the Partnership when due.

     4.4 Additional Assessments required by the General Partner pursuant to
Section 5.3 of this Agreement will be payable in cash on such date as the
General Partner may set in its written notice, but in no event will such
assessments be due earlier than thirty (30) days after the date of mailing of
the notice.  Notice of the General Partner's call for Additional Assessments
shall specify the amount required, the manner in which the additional funds will
be expended, the date on which such amounts are payable, and the consequences of
non-payment.  The

                                     A-11

<PAGE>
General Partner will not be required to accept late payments of such amounts,
but it may in its discretion do so.

     4.5 The General Partner will contribute to the capital of the Partnership
amounts equal to the total of all costs paid by the Partnership that are charged
to the General Partner's account as such costs are incurred.

                                  ARTICLE V
                 Deposit and Use of Capital Contributions and
                           Other Partnership Funds

     5.1 Until required in the conduct of the Partnership's business,
Partnership funds, including, but not limited to, Capital Contributions,
Partnership Revenue and proceeds of borrowings by the Partnership, will be
deposited, with or without interest, in one or more bank accounts of the
Partnership in a bank or banks selected by the General Partner or invested in
short-term United States government securities, money market funds, bank
certificates of deposit or commercial paper rated as "A1" or "P1" as the General
Partner, in its sole discretion, deems advisable.  Any interest or other income
generated by such deposits or investments will be for the Partnership's account.
Except for Capital Contributions, Partnership funds from any of the various
sources mentioned above may be commingled with other Partnership funds and with
the funds of the General Partner and may be withdrawn, expended and distributed
as authorized by the terms and provisions of this Agreement.

     5.2 The Capital Contributions of the Limited Partners will be expended for
costs incurred by the Partnership that, in accordance with the terms of this
Agreement, are properly chargeable to the Limited Partners' accounts.

     5.3 After the General Partner's Minimum Capital Contribution has been fully
expended, if the Aggregate Subscription has all been fully expended or committed
and additional funds are required in order to pay Drilling Costs, Special
Production and Marketing Costs or Leasehold Acquisition Costs of productive
properties which are chargeable to the Limited Partners, the General Partner
may, but shall not be required to, make one or more calls for Additional
Assessments from Limited Partners pursuant to Section 4.4; provided, however,
that the aggregate amount of Additional Assessments called of the Limited
Partners may not exceed $100 per Unit.  The Limited Partners who do not respond
will participate in production, if any, obtained from the aggregate Additional
Assessments paid into the Partnership.  However, the amount of the unpaid
Additional Assessment shall bear interest at the annual rate equal to two (2)
percentage points in excess of the prime rate of interest of Bank of Oklahoma,
N.A., Tulsa, Oklahoma, or successor bank, as announced and in effect from time
to time, until paid.  The Partnership will have a lien on the defaulting Limited
Partner's interest in the Partnership and the General Partner may apply
Partnership Revenue otherwise available for distribution to the defaulting
Limited Partner until an amount equal to the unpaid Additional Assessment and
interest is received.  Furthermore, the General Partner may satisfy such lien by
proceeding with legal action to enforce the lien and the defaulting Limited
Partner shall pay all expenses of collection, including interest, court costs
and a reasonable attorney's fee.

                                     A-12

<PAGE>
     5.4 After the General Partner's Minimum Capital Contribution has been fully
expended, the General Partner may cause the Partnership to borrow funds for the
purpose of paying Drilling Costs, Special Production and Marketing Costs or
Leasehold Acquisition Costs of productive properties, which borrowings may be
secured by interests in the Partnership Properties and will be repaid, including
interest accruing thereon, out of Partnership Revenue allocable to the accounts
of the Partners on whose behalf the proceeds of such borrowings are expended.
The General Partner may, but is not required to, advance funds to the
Partnership for the same purposes for which Partnership borrowings are
authorized by this Section 5.4.  With respect to any such advances, the General
Partner shall receive interest in an amount equal to the lesser of the interest
which would be charged to the Partnership by unrelated banks on comparable loans
for the same purpose or the General Partner's interest cost with respect to such
loan, where it borrows the same.  No financing charges will be levied by the
General Partner in connection with any such loan.  If Partnership borrowings
secured by interests in the Partnership Properties and repayable out of
Partnership Revenue cannot be arranged on a basis which, in the opinion of the
General Partner, is fair and reasonable, and the entire sum required to pay
costs of the type referred to above is not available from Partnership Revenue,
the Partnership may elect not to drill or participate in the drilling of a well
or the General Partner may dispose of the Partnership Properties upon which such
operations were to be conducted by sale (subject to any other applicable
provisions of this Agreement), farm-out or abandonment.

     5.5  The General Partner may utilize Partnership Revenue allocable to the
respective accounts of the Partners to pay any Partnership costs and expenses
properly chargeable to the accounts of such Partners.

     5.6 With respect to any Partnership activity and subject to the
restrictions set forth in Sections 5.3 and 5.4 above, it shall be in the sole
discretion of the General Partner whether to call for Additional Assessments,
arrange for borrowings on behalf of the Partners, utilize Partnership Revenue or
sell (subject to any other applicable provisions of this Agreement), farm-out or
abandon Partnership Properties.

     5.7 The Partnership Properties and production therefrom may be pledged,
mortgaged or otherwise encumbered as security for borrowings by the Partnership
authorized by Section 5.4 above, provided that the holder of indebtedness
arising by virtue of such borrowings may not have or acquire, at any time as a
result of making any such loans, any direct or indirect interest in the profits,
capital or property of the Partnership other than as a secured creditor.

                                   ARTICLE VI
                     Sharing of Costs, Capital Accounts and
                        Allocation of Charges and Income

     6.1 All costs of organizing the Partnership and offering Units therein will
be paid by the General Partner.  All costs incurred in the offering and
syndication of any drilling or income program formed by UPC or UNIT and its
affiliates during 2002 in which the Partnership participates as a co-general
partner will also be paid by the General Partner.

                                     A-13

<PAGE>
     6.2 All other Partnership costs and expenses will be charged 99% to the
accounts of the Limited Partners and 1% to the account of the General Partner
until such time as the Aggregate Subscription has been fully expended.
Thereafter and until the General Partner's Minimum Capital Contribution has been
fully expended, all of such costs and expenses will be charged to the General
Partner.  After the General Partner's Minimum Capital Contribution has been
fully expended, such costs and expenses will be charged to the respective
accounts of the General Partner and the Limited Partners on the basis of their
respective Percentages.

     6.3 All Partnership Revenues will be allocated between the General Partner
and the Limited Partners on the basis of their respective Percentages.

     6.4 Partnership costs, expenses and Revenues which are charged and
allocated to the Limited Partners shall be charged and allocated to their
respective accounts in the proportion the Units of each Limited Partner bear to
the total number of outstanding Units.

     6.5 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) (the "704 Regulations")
of the Internal Revenue Code of 1986, as amended (the "Code").  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:

          (a)  Each Partner's capital account shall be (i) increased by the
     amount of money contributed by him or her to the Partnership, the fair
     market value of property contributed by him or her to the Partnership (net
     of liabilities securing such contributed property that the Partnership is
     considered to assume or take subject to under section 752 of the Code) and
     allocations to him or her of Partnership income and gain (except to the
     extent such income or gain has previously been reflected in his or her
     capital account by adjustments thereto) and (ii) decreased by the amount of
     money distributed to him or her by the Partnership, the fair market value
     of property distributed to him or her by the 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 him or her of Partnership loss, deduction (except to the
     extent such loss or deduction has previously been reflected in his or her
     capital account by adjustments thereto) and expenditures described in
     section 705(a)(2)(B) of the Code.

          (b)  In the event Partnership Property is distributed to a Partner,
     then, before the capital account of such Partner is adjusted as required by
     subsection (a) of this Section 6.5, 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 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 property for its fair
     market value on the date of distribution.

                                     A-14

<PAGE>
          (c)  If, pursuant to this Agreement, Partnership Property is reflected
     on the books of the Partnership at a book value that differs from the
     adjusted tax basis of such 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 property.

          (d)  The Partners' capital accounts shall be adjusted for depletion
     and gain or loss with respect to the Partnership's oil or gas properties in
     whichever of the following manners the General Partner determines is in the
     best interests of the Partners:

                (i) 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 simulated depletion method
          shall be made on a property-by-property basis in the first taxable
          year of the Partnership for which such choice is relevant for an oil
          or gas property, and such choice shall be binding for all Partnership
          taxable years during which such oil or gas property is held by the
          Partnership.  Such reductions for depletion shall not exceed the
          aggregate adjusted basis allocated to the Partners with respect to
          such oil or gas property.  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 allocated to each
          Partner.  Upon the taxable disposition of an oil or gas property by
          the Partnership, the 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

               (ii) the 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 Partnership (for the
          Partner's taxable year that ends within the 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 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.

          (e)  For purposes of determining the capital account balance of any
     Partner as of the end of any Partnership taxable year for purposes of
     Subsection 6.6(f) hereof, such Partner's capital account shall be reduced
     by:

                                     A-15

<PAGE>
               (i) 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 Partnership,

               (ii) allocations of loss and deduction 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

               (iii) 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 Partnership taxable
          years in which such distributions reasonably are expected to be made.

     6.6 With respect to the various allocations of Partnership income, gain,
loss, deduction and credit for federal income tax purposes, it is hereby agreed
as follows:

          (a)  To the extent permitted by law, all charges, deductions and
     losses shall be allocated for federal income tax purposes in the same
     manner as the costs in respect of which such charges, deductions and losses
     are charged to the respective accounts of the Partners.  The Partners
     bearing the costs shall be entitled to the deductions (including, without
     limitation, cost recovery allowances, depreciation and cost depletion) and
     credits that are attributable to such costs.

          (b)  The Partnership shall allocate to each Partner his or her portion
     of the adjusted basis in each depletable Partnership Property as required
     by Section 613A(c)(7)(D) of the Code based upon the interest of said
     Partner in the capital of the Partnership as of the time of the acquisition
     of such Partnership Property.  To the extent permitted by the Code, such
     allocation shall be based upon said Partner's interest (i) in the
     Partnership capital used to acquire the property, or (ii) in the adjusted
     basis of the property if it is contributed to the Partnership.  If such
     allocation of basis is not permitted under the Code, then basis will be
     allocated in the permissible manner which the General Partner deems will
     most closely achieve the result intended above.

          (c)  Partnership Revenue shall be allocated for federal income tax
     purposes in the same manner as it is allocated to the respective accounts
     of the Partners pursuant to Sections 6.3 and 6.4 above.

          (d)  Depreciation or cost recovery allowance recapture and recapture
     of intangible drilling and development costs, if any, due as a result of
     sales or dispositions of assets shall be allocated in the same proportion
     that the depreciation, cost recovery allowances or intangible drilling and
     development costs being recaptured were allocated.

          (e)  Notwithstanding anything to the contrary stated herein,

                                     A-16

<PAGE>
                (i) there shall be allocated first to other Limited Partners and
          then to the General Partner any item of loss, deduction, credit or
          allowance that, but for this Subsection 6.6(e), would have been
          allocated to any Limited Partner that is not obligated to restore any
          deficit balance in such Limited Partner's capital account and would
          have thereupon caused or increased a deficit balance in such Limited
          Partner's capital account as of the end of the Partnership's taxable
          year to which such allocation related (after taking into consideration
          the numbered items specified in Subsection 6.5(e) hereof);

               (ii) any Limited Partner that is not obligated to restore any
          deficit balance in such Limited Partner's capital account who
          unexpectedly receives an adjustment, allocation or distribution
          specified in Subsection 6.5(e) hereof shall be allocated items of
          income and gain in an amount and manner sufficient to eliminate such
          deficit balance as quickly as possible; and

               (iii) in the event any allocations of loss, deduction, credit or
          allowance are made to a Limited Partner or the General Partner
          pursuant to clause (i) of this Subsection 6.6(e), then such Limited
          Partner and/or the General Partner shall be subsequently allocated all
          items of income and gain pro rata as they were allocated the item(s)
          of loss, deduction, credit or allowance under such clause (i) until
          the aggregate amount of such allocations of income and gain is equal
          to the aggregate amount of any such allocations of loss, deduction,
          credit or allowance allocated to such Partner(s) pursuant to clause
          (i) of this Subsection 6.6(e).

          (f)  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 Partnership of
     Partnership Property and such property's fair market value, then all items
     of income, gain, loss and deduction with respect to such property shall be
     allocated among the Partners so as to take account of the variation between
     the basis of such 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.

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

     6.8 Except as provided in subsections (a) through (d) of this Section 6.8,
in the case of a change in a Partner's interest in the Partnership during a
taxable year of the Partnership, all Partnership income, gain, loss, deduction
or credit allocable to the Partners shall be allocated to the persons who were
Partners during the period to which such item is attributable in accordance

                                     A-17

<PAGE>
with the Partners' interests in the Partnership during such period regardless of
when such item is paid or received by the Partnership.

          (a)  With respect to certain "allocable cash basis items" (as such
     term is defined in the Code) of Partnership Revenue, gain, loss, deduction
     or credit, if, during any taxable year of the Partnership there is change
     in any Partner's interest in the Partnership, then, except to the extent
     provided in regulations prescribed under Section 706 of the Code, each
     Partner's allocable share of any "allocable cash basis item" shall be
     determined by (i) assigning the appropriate portion of each such item to
     each day in the period to which it is attributable, and (ii) allocating the
     portion assigned to any such day among the Partners in proportion to their
     interests in the Partnership at the close of such day.

          (b)  If, by adhering to the method of allocation described in the
     immediately preceding subsection of this Section 6.8, a portion of any
     "allocable cash basis item" is attributable to any period before the
     beginning of the Partnership taxable year in which such item is received or
     paid, such portion shall be (i) assigned to the first day of the taxable
     year in which it is received or paid, and (ii) allocated among the persons
     who were Partners in the Partnership during the period to which such
     portion is attributable in accordance with their interests in the
     Partnership during such period.

          (c)  If any portion of any "allocable cash basis item" paid or
     received by the Partnership in a taxable year is attributable to a period
     after the close of that taxable year, such portion shall be (i) assigned to
     the last day of the taxable year in which it is paid or received, and (ii)
     allocated among the persons who are Partners in proportion to their
     interests in the Partnership at the close of such day.

          (d)  If any deduction is allocated to a person with respect to an
     "allocable cash basis item" attributable to a period before the beginning
     of the Partnership taxable year and such person is not a Partner of the
     Partnership on the first day of the Partnership taxable year, such
     deduction shall be capitalized by the Partnership and treated in the manner
     provided for in Section 755 of the Code.

                                 ARTICLE VII
                    Fiscal Year, Accountings and Reports

     7.1 Unless the Code requires otherwise, the fiscal year of the Partnership
will be the calendar year and the books of the Partnership will be kept in
accordance with usual and customary accounting practices on the accrual method.

     7.2 Within sixty (60) days after the end of each quarter of each
Partnership fiscal year, each person who was a Limited Partner during such
period will be furnished a report setting forth the source and disposition of
Partnership funds during the quarter.

                                     A-18

<PAGE>
     7.3 Not later than the end of the fiscal year in which all Partnership
Wells are drilled and completed, and sufficient production history has been
obtained on Partnership Wells to evaluate properly the reserves attributable
thereto, the General Partner will make an evaluation of Partnership Properties
as of the last day of such fiscal year.  The report shall include an estimate of
the total oil and gas proven reserves of the Partnership and the dollar value
thereof and the value of the Limited Partner's interest in such reserve value.
It shall also contain an estimate of the present worth of the reserves.  Each
Limited Partner will receive a summary statement of such report reflecting the
Limited Partners' interest in such reserve value.

                                 ARTICLE VIII
                          Tax Returns and Elections

     8.1 Unless the Code requires otherwise, the General Partner will cause the
Partnership to elect the calendar year as its taxable year and will timely file
all Partnership income tax returns required to be filed by the jurisdictions in
which the Partnership conducts business or derives income.  By March 15 of each
year or as soon thereafter as practicable, the General Partner will furnish all
available information necessary for inclusion in the income tax returns of each
person who was a Limited Partner during the prior fiscal year.  The General
Partner shall be the "Tax Matters Partner" for the Partnership pursuant to the
provisions of Section 6231 of the Code subject to the provisions of Section
10.22 below.

     8.2 The Partnership will elect to deduct intangible drilling and
development costs currently as an expense for income tax purposes and will elect
to use the available depreciation method which, in the General Partner's
judgment, is in the best interest of the Partners.

     8.3 The General Partner shall have the right in its sole discretion at any
time to make or not to make such other elections as are authorized or permitted
by any law or regulation for income tax purposes (including any election under
Section 754 of the Code).

                                  ARTICLE IX
                                Distributions

     9.1 The Partnership's available cash will be distributed to the Limited
Partners and the General Partner in the same proportions that Partnership
Revenue has been allocated to them after giving effect to previous distributions
and to portions of such revenue theretofore used or retained to pay costs
incurred or expected to be incurred in conducting Partnership operations or to
repay borrowings theretofore or expected to be thereafter obtained by the
Partnership.  Within forty-five (45) days after the end of each calendar
quarter, the General Partner will determine the amount of cash available for
distribution to the Limited Partners and will distribute such amount, if any, as
promptly thereafter as reasonably possible.  Distributions of cash to the
General Partner may be at any time the General Partner determines there is cash
available therefor.  The General Partner's determination of the cash available
for distribution will be conclusive and binding upon all Partners.  All
Partnership funds distributed to the Limited Partners shall be distributed to
the persons who were record holders of Units on the day on which the
distribution is made.

                                     A-19

<PAGE>
                                  ARTICLE X
             Rights, Duties and Obligations of the General Partner

     10.1 Subject to the limitations of this Agreement, the General Partner will
have full, exclusive and complete discretion in the management and control of
the business of the Partnership and will make all decisions affecting its
business and affairs or the Partnership Properties.  The General Partner will
have, subject to the provisions of this Article X, full power and authority to
take any action described in Article III above and execute and deliver in the
name of and on behalf of the Partnership such documents or instruments as the
General Partner deems appropriate for the conduct of Partnership business.  No
person, firm or corporation dealing with the Partnership will be required to
inquire into the authority of the General Partner to take any action or make any
decision.

     10.2 The General Partner will perform the duties imposed upon it under this
Agreement in an efficient and businesslike manner with due caution and in
accordance with established practices of the oil and gas industry, but the
General Partner shall not be liable, responsible or accountable in damages or
otherwise to the Partnership or any of the Partners for, and the Partnership
shall indemnify, defend against and save harmless the General Partner, from any
expense (including attorneys' fees), loss or damage incurred by reason of any
act or omission performed or omitted in good faith on behalf of the Partnership
or the Partners, and in a manner reasonably believed by the General Partner to
be within the scope of the authority granted by this Agreement and in the best
interests of the Partnership or the Partners, provided that the General Partner
is not guilty of gross negligence or willful misconduct with respect to such
acts or omissions, and further provided that the satisfaction of any
indemnification and any saving harmless shall be from and limited to Partnership
assets including insurance proceeds, if any, and no Partner shall have any
personal liability on account thereof.  For purposes of this Section 10.2 only,
the term General Partner includes the General Partner, affiliates of the General
Partner and any officer, director or employee of the General Partner or any of
its affiliates such that all of such parties are covered by the indemnities
provided herein.

     10.3 The General Partner will utilize its organization and employees and
will hire outside consultants for the Partnership as necessary in order to
provide experienced, qualified and competent personnel to conduct the
Partnership's business.  With certain limited exceptions it is the intent of the
Partners that the Partnership participate as a co-general partner of any oil and
gas drilling or income programs, or both, formed by the General Partner or UNIT
for third party investors during 2002 and to participate on a proportionate
working interest basis in each producing oil and gas lease acquired and in the
drilling of each oil and gas well commenced by the General Partner or UNIT for
its own account during the period from the later of January 1, 2002 or the
Effective Date through December 31, 2002 (except for wells, if any, (i) drilled
outside of the 48 contiguous United States; (ii) drilled as part of secondary or
tertiary recovery operations which were in existence prior to the formation of
the Partnership; (iii) drilled by third parties under farm-out or similar
arrangements with the General Partner or UNIT or whereby the General Partner or
UNIT may be entitled to an overriding royalty, reversionary or other similar
interest in the production from such wells but is not obligated to pay any of
the Drilling Costs

                                     A-20

<PAGE>
thereof; (iv) acquired by UNIT or the General Partner through the acquisition by
UNIT or the General Partner of, or merger of UNIT or the General Partner with,
other companies; or (v) with respect to which the General Partner does not
believe that the potential economic return therefrom justifies the costs of
participation by the Partnership).

     10.4 The General Partner, UNIT or any affiliate thereof will transfer to
the Partnership interests in oil and gas properties comprising the spacing unit
on which a Partnership Well is located or is to be drilled for the separate
account of the Partnership, provided that no broker's commissions or fees of a
similar nature will be paid in connection with any such transfer and the
consideration paid by the Partnership will be equal to the Leasehold Acquisition
Costs of the property so transferred.  If the size of a spacing unit on which a
Partnership Well is located is ever reduced or increased well density is
permitted thereon, the Partnership will not be entitled to any reimbursement or
recoupment of any portion of the Leasehold Acquisition Costs paid with respect
thereto notwithstanding the provisions of Section 10.7 below.

     10.5 With respect to certain transactions involving Partnership Properties,
it is hereby agreed as follows:

          (a)  A sale, transfer or conveyance by the General Partner or any
     affiliate of less than its entire interest in such property is prohibited
     unless (i) the interest retained by the General Partner or its affiliate is
     a proportionate working interest, (ii) the respective obligations of the
     General Partner or its affiliate and the Partnership are substantially the
     same proportionately as those of the General Partner or its affiliate at
     the time it acquired the property and (iii) the Partnership's interest in
     revenues will not be less than the proportionate interest therein of the
     General Partner or its affiliate when it acquired the property.  The
     General Partner or its affiliate may retain the remaining interest for its
     own account or it may sell, transfer, farm-out or otherwise convey all or a
     portion of such remaining interest to non-affiliated industry members.  In
     connection with any such sale, transfer, farm-out or other conveyance of
     such interest to non-affiliated industry members, which may occur either
     before or after the transfer of the interests in the same properties to the
     Partnership, the General Partner or its affiliate may realize a profit on
     the interests or may be carried to some extent with respect to its cost
     obligations in connection with any drilling on such properties and any such
     profit or interest will be strictly for the account of the General Partner
     and the Partnership will have no claim with respect thereto.

          (b)  The General Partner or its affiliates may not retain any
     overrides or other burdens on property conveyed to the Partnership (other
     than overriding royalty interests granted to geologists and other persons
     employed or retained by the General Partner or its affiliates).

     10.6 The General Partner will cause the Partnership Properties to be
acquired in accordance with the customs of the oil and gas industry in the area.
The Partnership will be required to do only such title work with respect to its
oil and gas properties as the General Partner in its sole judgment deems
appropriate in light of the area, any applicable drilling or expiration dates
and any other material factors.

                                     A-21

<PAGE>
     10.7 Partnership Properties shall be transferred to the Partnership after
the decision to acquire a productive property or the commitment to drill a
Partnership Well thereon has been made.  The Partnership shall acquire interests
in only those properties of the General Partner or UNIT which comprise the
spacing unit on which the Partnership Well is drilled or on which a producing
Partnership Well is located.  If a spacing unit on which a Partnership Well is
drilled or located is ever reduced, or any subsequent well in which the
Partnership has no interest is drilled thereon, the Partnership will have no
interest in any such subsequent or additional wells drilled on properties which
were a part of the original spacing unit unless any such additional well is
commenced during 2002 or is drilled by a drilling or income program of which the
Partnership is a partner.  Likewise if UNIT, UPC or any affiliate, including any
oil and gas partnership subsequently formed for investment or participation by
employees, directors and/or consultants of UNIT or any of its subsidiaries,
acquires additional interests in Partnership Wells after 2002 the Partnership
generally will not be entitled to participate in the acquisition of such
additional interests.  In addition, if a Partnership Well drilled on a spacing
unit is dry or abandoned, the Partnership will not have an interest in any
subsequent or additional well drilled on the spacing unit unless it is commenced
during 2002 or is drilled by a drilling or income program of which the
Partnership is a partner.

     10.8 The General Partner, UNIT or its affiliates will either conduct the
Partnership's drilling and production operations and operate each Partnership
Well or arrange for a third party operator to conduct such operations.  The
General Partner will, on behalf of the Partnership, enter into appropriate
operating agreements with other owners of Partnership Wells authorizing the
General Partner, its affiliates or a third party operator to conduct such
operations.  The Partnership will take such action in connection with operations
pursuant to said operating agreements as the General Partner, in its sole
discretion, deems appropriate and in the best interests of the Partnership, and
the decision of the General Partner with respect thereto will be binding upon
the Partnership.

     10.9 The General Partner will cause the Partnership to plug and abandon its
dry holes and abandoned wells in accordance with rules and regulations of the
governmental regulatory body having jurisdiction.

     10.10 The General Partner may pool or unitize Partnership Properties with
other oil and gas properties when such pooling or unitization is required by a
governmental regulatory body, when well spacing as determined by any such body
requires such pooling or unitization, or when, in the General Partner's opinion,
such pooling or unitization is in the best interests of the Partnership.

     10.11 The General Partner will have authority to make and enter into
contracts for the sale of the Partnership's share of oil or gas production from
Partnership Wells, including contracts for the sale of such production to the
General Partner, UNIT or its affiliates; provided, however, that the production
purchased by the General Partner, UNIT or any of its affiliates will be for
prices which are not less than the highest posted price (in the case of crude
oil production) or prevailing price (in the case of natural gas production) in
the same field or area.

                                     A-22

<PAGE>
     10.12 The General Partner will use its best efforts to procure and maintain
for the Partnership, and at its expense, such insurance coverage with
responsible companies as may be reasonably available for such premium costs as
would not be considered to be unreasonably high or prohibitive with respect to
each item of coverage and as the General Partner considers necessary for the
protection of the Partnership and the Partners.  The coverage will be in such
amounts and will cover such risks as the General Partner believes warranted by
the operations conducted hereunder.  Such risks may include but will not
necessarily be limited to public liability and automobile liability, each
covering bodily injury, death and property damage, workmen's compensation and
employer's liability insurance and blowout and control of well insurance.

     10.13 In order to conduct properly the business of the Partnership, and in
order to keep the Partners properly informed, the General Partner will:

          (a)  maintain adequate records and files identifying the Partnership
     Properties and containing all pertinent information in regard thereto that
     is obtained or developed pursuant to this Agreement;

          (b)  maintain a complete and accurate record of the acquisition and
     disposition of each Partnership Property;

          (c)  maintain appropriate books and records reflecting the
     Partnership's revenue and expense and each Partner's participation therein;

          (d)  maintain a capital account for each Partner with appropriate
     records as necessary in order to reflect each Partner's interest in the
     Partnership and furnish required tax information; and

          (e)  keep the Limited Partners informed by means of written reports on
     the acquisition of Partnership Properties and the progress of the business
     and operations of the Partnership, which reports will be rendered semi-
     annually and at such more frequent intervals during the progress of
     Partnership operations as the General Partner deems appropriate.

     10.14 The General Partner, UNIT and the officers, directors, employees and
affiliates thereof may own, purchase or otherwise acquire and deal in oil and
gas properties, drill wells, conduct operations and otherwise engage in any
aspect of the oil and gas business, either for their own accounts or for the
accounts of others.  Each Limited Partner hereby agrees that engaging in any
activity permitted by this Section 10.14 will not be considered a breach of any
duty that the General Partner, UNIT or the officers, directors, employees and
affiliates thereof may have to the Partnership or the Limited Partners, and that
the Partnership and the Limited Partners will not have any interest in any
properties acquired or profits which may be realized with respect to any such
activity.

     10.15 Subject to Section 12.1, without the prior consent of Limited
Partners holding a majority of the outstanding Units, the General Partner will
not (i) make, execute or deliver any

                                     A-23

<PAGE>
assignment for the benefit of the Partnership's creditors; or (ii) contract to
sell all or substantially all of the Partnership Properties (except as permitted
by Sections 10.23 and 16.4(b)).

     10.16 In contracting for services to and insurance coverage for the
Partnership and its activities and operations, and in acquiring material,
equipment and personal property on behalf of the Partnership, the General
Partner will use its best efforts to obtain such services, insurance, material,
equipment and personal property at prices no less favorable than those normally
charged in the same or in comparable geographic areas by non-affiliated persons
or companies dealing at arm's length.  No rebates, concessions or compensation
of a similar nature will be paid to the General Partner by the person or company
supplying such services, insurance, material, equipment and personal property.

     10.17 The General Partner, UNIT or its affiliates are authorized to provide
equipment, materials and services to the Partnership in connection with the
conduct of its operations, provided, that the terms of any contracts between the
Partnership and the General Partner, UNIT or any affiliates, or the officers,
directors, employees and affiliates thereof must be no less favorable to the
Partnership than those of comparable contracts entered into, and will be at
prices not in excess of those charged in the same geographical area by non-
affiliated persons or companies dealing at arm's length.  Any such contracts for
services must be in writing precisely describing the services to be rendered and
all compensation to be paid.

     10.18 The General Partner may cause the Partnership to hold Partnership
Properties in the Partnership's name, or in the name of the General Partner,
UNIT, any affiliates thereof or some third party as nominee for the Partnership.
If record title to a Partnership Property is to be held permanently in the name
of a nominee, such nominee arrangement will be evidenced and documented by a
nominee agreement identifying the Partnership Properties so held and disclaiming
any beneficial interest therein by the nominee.

     10.19 The General Partner will be generally liable for the debts and
obligations of the Partnership, provided that any claims against the Partnership
shall be satisfied first out of the assets of the Partnership and only
thereafter out of the separate assets of the General Partner.

     10.20 The Partnership may not make any loans to the General Partner, UNIT
or any of its affiliates.

     10.21 The General Partner will use its best efforts at all times to
maintain its net worth at a level that is sufficient to insure that the
Partnership will be classified for federal income tax purposes as a partnership,
rather than as an association taxable as a corporation, on account of the net
worth of the General Partner.

     10.22 The Tax Matters Partner designated in Section 8.1 above is authorized
to engage legal counsel and accountants and to incur expense on behalf of the
Partnership in contesting, challenging and defending against any audits,
assessments and administrative or judicial proceedings conducted or participated
in by the Internal Revenue Service with respect to the Partnership's operations
and affairs.

                                     A-24

<PAGE>
     10.23 At any time two years or more after the Partnership has completed
substantially all of its property acquisition, drilling and development
operations, the General Partner may, without the vote, consent or approval of
the Limited Partners, cause all or substantially all of the oil and gas
properties and other assets of the Partnership to be sold, assigned or
transferred to, or the Partnership merged or consolidated with, another
partnership or a corporation, trust or other entity for the purpose of combining
the assets of two or more of the oil and gas partnerships formed for investment
or participation by employees, directors and/or consultants of UNIT or any of
its subsidiaries; provided, however, that the valuation of the oil and gas
properties and other assets of all such participating partnerships for purposes
of such transfer or combination shall be made on a consistent basis and in a
manner which the General Partner and UNIT believe is fair and equitable to the
Limited Partners.  As a consequence of any such transfer or combination, the
Partnership shall be dissolved and terminated pursuant to Article XVI hereof and
the Limited Partners shall receive partnership interests, stock or other equity
interests in the transferee or resulting entity.

                                   ARTICLE XI
                        Compensation and Reimbursements

     11.1 For the General Partner's services performed as operator of productive
Partnership Wells located on Partnership Properties and as operator during the
drilling of Partnership Wells, the Partnership will compensate the General
Partner at rates no higher than those normally charged in the same or a
comparable geographic area by non-affiliated persons or companies dealing at
arm's length.  The General Partner will not receive compensation for such
services performed in connection with the operation of Partnership Wells
operated by third party operators, but such third party operators will be
compensated as provided in the operating agreements in effect with respect to
such wells and the Partnership will pay its proportionate share of such
compensation.

     11.2 The General Partner will be reimbursed by the Partnership out of
Partnership Revenues for that portion of its general and administrative overhead
expense that is attributable to its conduct of the actual and necessary
business, affairs and operations of the Partnership.  The General Partner's
general and administrative overhead expenses will be determined in accordance
with industry practices.  The allocable costs and expenses will include all
customary and routine legal, accounting, geological, engineering, travel, office
rent, telephone, secretarial, salaries, data processing, word processing and
other incidental reasonable expenses necessary to the conduct of the
Partnership's business and generated by the General Partner or allocated to it
by UNIT, but will not include filing fees, commissions, professional fees,
printing costs and other expenses incurred in forming the Partnership or
offering interests therein.  Also excluded will be any general and
administrative overhead expense of the General Partner or UNIT which may be
attributable to its services as an operator of Partnership Wells for which it
receives compensation pursuant to Section 11.1 above.  The portion of the
General Partner's general and administrative overhead expense to be reimbursed
by the Partnership with respect to any particular period will be determined by
allocating to the Partnership that portion of the General Partner's total
general and administrative overhead expense incurred during such period which is
equal to the ratio of the Partnership's total expenditures compared to the total
expenditures by the

                                     A-25

<PAGE>
General Partner for its own account.  The portion of such general and
administrative overhead expense reimbursement which is charged to the Limited
Partners may not exceed an amount equal to 3% of the Aggregate Subscription
during the first 12 months of the Partnership's operations, and in each
succeeding twelve-month period, the lesser of (a) 2% of the Aggregate
Subscription and (b) 10% of the total Partnership Revenue realized in such
twelve-month period.  Administrative expenses incurred directly by the
Partnership, or incurred by the General Partner on behalf of the Partnership and
reimbursable to the General Partner, such as legal, accounting, auditing,
reporting, engineering, mailing and other such fees, costs and expenses are not
to be deemed a part of the general and administrative expense of the General
Partner which is to be reimbursed pursuant to this Section 11.2 and the amounts
thereof will not be subject to the limitations described in the preceding
sentence.

                                 ARTICLE XII
                 Rights and Obligations of Limited Partners

     12.1 The Limited Partners, in their capacity as such, cannot transact any
business for the Partnership or take part in the control of its business or
management of its affairs.  Limited Partners will have no power to execute any
agreements on behalf of, or otherwise bind or commit, the Partnership.  They may
give consents and approvals as herein provided and exercise the rights and
powers granted to them in this Agreement, it being understood that the exercise
of such rights and powers will be deemed to be matters affecting the basic
structure of the Partnership and not the exercise of control over its business;
provided, however, that exercise of any of the rights and powers granted to the
Limited Partners in Sections 10.15, 12.3, 14.1, 16.1 and 18.1 will not be
authorized or effective unless prior to the exercise thereof the General Partner
is furnished an opinion of counsel for the Partnership or an order or judgment
of any court of competent jurisdiction to the effect that the exercise of such
rights or powers (i) will not be deemed to evidence that the Limited Partners
are taking part in the control of or management of the Partnership's business
and affairs, (ii) will not result in the loss of any Limited Partner's limited
liability and (iii) will not result in the Partnership being classified as an
association taxable as a corporation for federal income tax purposes.

     12.2 The Limited Partners will not be personally liable for any debts or
losses of the Partnership.  Except as otherwise specifically provided herein, no
Partner will be responsible for losses of any other Partners.

     12.3 Except as otherwise provided in this Agreement, no Limited Partner
will be entitled to the return of his contribution.  Distributions of
Partnership assets pursuant to this Agreement may be considered and treated as
returns of contributions if so designated by law or, subject to Section 12.1, by
agreement of the General Partner and Limited Partners holding a majority of the
outstanding Units.  The value of a Limited Partner's undistributed contribution
determined for the purposes of Section 39 of the Act at any point in time shall
be his or her percentage of the amount of the Partnership's stated capital
allocated to the Limited Partners as reflected in the financial statements of
the Partnership as of such point in time.  No Partner will receive any interest
on his or her contributions and no Partner will have any priority over any other
Partner as to the return of contributions.

                                     A-26

<PAGE>
                                ARTICLE XIII
                 Transferability of Limited Partner's Interest

     13.1 Notwithstanding the provisions of Section 13.3, no sale, exchange,
transfer or assignment of a Limited Partner's interest in the Partnership may be
made unless in the opinion of counsel for the Partnership,

          (a)  such sale, exchange, transfer or assignment, when added to the
     total of all other sales, exchanges, transfers or assignments of interests
     in the Partnership within the preceding 12 months, would not result in the
     Partnership being considered to have terminated within the meaning of
     Section 708 of the Code (provided, however, that this condition may be
     waived by the General Partner in its discretion);

          (b)  such sale, exchange, transfer or assignment would not violate, or
     cause the offering of the Units to be violative of, the Securities Act of
     1933, as amended, or any state securities or "blue sky" laws (including any
     investor suitability standards) applicable to the Partnership or the
     interest to be sold, exchanged, transferred or assigned; and

          (c)  such sale, exchange, transfer or assignment would not cause the
     Partnership to lose its status as a partnership for federal income tax
     purposes, and said opinion of counsel is delivered in writing to the
     Partnership prior to the date of the sale, exchange, transfer or
     assignment.

     13.2 In no event shall all or any part of an interest in the Partnership be
assigned or transferred to a minor (except in trust or pursuant to the Uniform
Gifts to Minors Act) or an incompetent (except in trust), except by will or
intestate succession.

     13.3 Except for transfers or assignments (in trust or otherwise) by a
Limited Partner of all or any part of his or her interest in the Partnership

          (a)  to the General Partner,

          (b)  to or for the benefit of himself or herself, his or her spouse,
     or other members of his or her immediate family sharing the same household,

          (c)  to a corporation or other entity in which all of the beneficial
     owners are Limited Partners or assigns permitted in (a) and (b) above, or

          (d)  by the General Partner to any person who at the time of such
     transfer is an employee of the General Partner, UNIT or its subsidiaries,
     no Limited Partner's Units or any portion thereof may be sold, assigned or
     transferred except by reason of death or operation of law.

                                     A-27

<PAGE>
     13.4 If a Limited Partner dies, his or her executor, administrator or
trustee, or, if he or she is adjudicated incompetent, his or her committee,
guardian or conservator, or, if he or she becomes bankrupt, the trustee or
receiver of his or her estate, shall have all the rights of a Limited Partner
for the purpose of settling or managing his or her estate and such power as the
deceased, incapacitated or bankrupt Limited Partner possessed to assign all or
any part of his or her interest and to join with such assignee in satisfying
conditions precedent to such assignee's becoming a Substituted Limited Partner.

     13.5 The Partnership shall not recognize for any purpose any purported
sale, assignment or transfer of all or any fraction of the interest of a Limited
Partner in the Partnership, unless the provisions of Section 13.1 shall have
been complied with and there shall have been filed with the Partnership a
written and dated notification of such sale, assignment or transfer in form
satisfactory to the General Partner, 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 Partnership as effective on the date of such notification if
the date of such notification is within thirty (30) days of the date on which
such notification is filed with the Partnership, and otherwise shall be
recognized as effective on the date such notification is filed with the
Partnership.

     13.6 Any Limited Partner who shall assign all of his or her interest in the
Partnership shall cease to be a Limited Partner, except that, unless and until a
Substituted Limited Partner is admitted in his or her stead, such assigning
Limited Partner shall retain the statutory rights of the assignor of a Limited
Partner's interest under the Act.

     13.7 A person who is the assignee of all or any fraction of the interest of
a Limited Partner, but does not become a Substituted Limited Partner and desires
to make a further assignment of such interest, shall be subject to all the
provisions of this Article XIII to the same extent and in the same manner as any
Limited Partner desiring to make an assignment of his or her interest.

     13.8 No Limited Partner shall have the right to substitute a purchaser,
assignee, transferee, donee, heir, legatee, distributee or other recipient of
all or any portion of such Limited Partner's interest in the Partnership as a
Limited Partner in his or her place.  Any such purchaser, assignee, transferee,
donee, legatee, distributee or other recipient of an interest in the Partnership
shall be admitted to the Partnership as a Substituted Limited Partner only with
the consent of the General Partner, which consent shall be granted or withheld
in the sole and absolute discretion of the General Partner and may be
arbitrarily withheld, and only by an amendment to this Agreement or the
certificate of limited partnership duly executed and recorded in the proper
records of each jurisdiction in which the Partnership owns mineral interests and
filed in the proper records of the State of Oklahoma.  Any such consent by the
General Partner shall be binding and conclusive without the consent of any
Limited Partners and may be evidenced by the execution of the General Partner of
an amendment to this Agreement or the certificate of limited partnership,
evidencing the admission of such person as a Substituted Limited Partner.

                                     A-28

<PAGE>
     13.9 No person shall become a Substituted Limited Partner until such person
shall have:

          (a)  become a party to, and adopted all of the terms and conditions
     of, this Agreement;

          (b)  if such person is a corporation, partnership or trust, provided
     the General Partner with evidence satisfactory to counsel for the
     Partnership of such person's authority to become a Limited Partner under
     the terms and provisions of this Agreement; and

          (c)  paid or agreed to pay the costs and expenses incurred by the
     Partnership in connection with such person's becoming a Limited Partner.

Provided, however, that for the purpose of allocating Partnership Revenue, costs
and expenses, a person shall be treated as having become, and as appearing in
the records of the Partnership as, a Substituted Limited Partner on such date as
the sale, assignment or transfer was recognized by the Partnership pursuant to
Section 13.5.

     13.10 By his or her execution of his or her Subscription Agreement, each
Limited Partner represents and warrants to the General Partner and to the
Partnership that his or her acquisition of his or her interest in the
Partnership is made as principal for his or her own account for investment
purposes only and not with a view to the resale or distribution of such
interest.  Each Limited Partner agrees that he or she will not sell, assign or
otherwise transfer his or her interest in the Partnership or any fraction
thereof unless such interest has been registered under the Securities Act of
1933, as amended, or such sale, assignment or transfer is exempt from such
registration and, in any event, he or she will not so sell, assign or otherwise
transfer his or her interest or any fraction thereof to any person who does not
similarly represent, warrant and agree.

                                  ARTICLE XIV
                      Assignments by the General Partner

     14.1 The General Partner may not sell, assign, transfer or otherwise
dispose of its interest in the Partnership except with the prior consent,
subject to Section 12.1, of Limited Partners holding a majority of the
outstanding Units; provided that a sale, assignment or transfer may be effective
without such consent if pursuant to a bona fide merger, any other corporate
reorganization or a complete liquidation, pursuant to a sale of all or
substantially all of the General Partner's assets (provided the purchasers of
such assets agree to assume the duties and obligations of the General Partner)
or a sale or transfer to UNIT or any affiliates of UNIT.  If the Limited
Partners' consent to a proposed transfer is required, the General Partner will,
concurrently with the request for such consent, give the Limited Partners
written notice identifying the interest to be transferred, the date on which the
transfer is to be effective, the proposed transferee and the substitute General
Partner, if any.

                                     A-29

<PAGE>
     14.2 Sales, assignments and transfers of the interests in the Partnership
owned by the General Partner will be subject to, and the assignee will acquire
the assigned interest subject to, all of the terms and provisions of this
Agreement.

     14.3 If the Limited Partners' consent to a transfer of the General
Partner's interest in the Partnership is obtained as above provided, or is not
required, the transferee may become a substitute General Partner hereunder.  The
substitute General Partner will assume and agree to perform all of the General
Partner's duties and obligations hereunder and the transferring General Partner
will, upon making a proper accounting to the substitute General Partner, be
relieved of any further duties or obligations hereunder with respect to
Partnership operations thereafter occurring.

                                  ARTICLE XV
                    Limited Partners' Right of Presentment

     15.1 After December 31, 2003, each Limited Partner will have the option,
subject to the terms and conditions set forth in this Article XV, to require the
General Partner to purchase all (but not less than all) of his or her Units,
provided that the option may not be exercised after the date of any notice that
will effect a dissolution and termination of the Partnership pursuant to Article
XVI below.  Any such exercise shall be effected by written notice thereof
delivered to the General Partner.

     15.2 Sales of Limited Partners' Units pursuant to this Article XV will be
effective, and the purchase price for such interests will be determined, as of
the close of business on the last day of the calendar year in which the Limited
Partner's notice exercising his or her option is given, or, at the General
Partner's election, as of 7:00 o'clock A.M. on the following day.

     15.3 The purchase price to be paid for the Units of any Limited Partner who
exercises the option granted in this Article XV will be determined in the
following manner.  First, future gross revenues expected to be derived from the
production and sale of the proved reserves attributable to Partnership
Properties will be estimated, as of the end of the calendar year in which
presentment is made, by the independent engineering firm preparing a report on
the reserves of the Partnership, or if no such firm is preparing a report as of
the end of the calendar year in which the option is exercised, then by the
General Partner.  Next, future net revenues will be calculated by deducting
anticipated expenses (including Operating Expenses and other costs that will be
incurred in producing and marketing such reserves and any gross production,
excise, or other taxes, other than federal income taxes, based on the oil and
gas production of the Partnership or sales thereof) from estimated future gross
revenues.  The price to be used in calculating future gross revenues as well as
the estimates of price and cost escalations to be used in such calculations will
be those of such independent engineering firm or the General Partner, whichever
is making the determination.  Then the present worth of the future net revenues
will be calculated by discounting the estimated future net revenues at that rate
per annum which is one (1) percentage point higher than the prime rate of
interest being charged by Bank of Oklahoma, N.A., Tulsa, Oklahoma, or any
successor bank, as such prime rate of interest is announced by said bank as of
the date such reserves are estimated.  This amount will be reduced

                                     A-30

<PAGE>
by an additional 25% to take into account the uncertainties attendant to the
production and sale of oil and gas reserves and other unforeseen contingencies.
Estimated salvage value of tangible equipment installed on the Partnership Wells
and costs of plugging and abandoning the productive Partnership Wells, both
discounted at the aforementioned rate from the expected date of abandonment,
will be considered, and Partnership Properties, if any, which do not have proved
reserves attributable to them but which have not been condemned will be valued
at the lower of cost or their then current market value as determined by the
aforementioned independent petroleum engineering firm or General Partner, as the
case may be.  The Partnership's cash on hand, prepaid expenses, accounts
receivable (less a reasonable reserve for doubtful accounts) and the market
value of its other assets as determined by the General Partner will be added to
the value of the Partnership Properties thus determined, and the Partnership's
debts, obligations and other liabilities will be deducted, to arrive at the
Partnership's net asset value for purposes of this Section 15.3.  The price to
be paid for the Limited Partner's interest will be his or her proportionate
share of such net asset value less 75% of the amount of any Partnership
distributions received by him or her which are attributable to sales of
Partnership production since the date as of which the Partnership's proved
reserves are estimated.

     15.4 Within one hundred twenty (120) days after the end of any calendar
year in which a Limited Partner exercises his or her option to require purchase
of his or her Units as provided in this Article XV, the General Partner will
furnish to such Limited Partner a statement showing the price to be paid for his
or her Units and evidencing that such price has been determined in accordance
with the provisions of Section 15.3 above.  The statement will show which
portion of the proposed purchase price is represented by the value of the proved
reserves and by each of the other classes of Partnership assets and liabilities
attributable to the account of the Limited Partner.  The Limited Partner will
then have thirty (30) days to confirm, by further notice to the General Partner,
his or her intention to sell his or her Units to the General Partner.  If the
Limited Partner timely confirms his or her intention to sell, the sale will be
consummated and the price paid in cash within ten (10) days after such
confirmation.  The General Partner will not be obligated to purchase (i) any
Units pursuant to such right if such purchase, when added to the total of all
other sales, exchanges, transfers or assignments of the Units within the
preceding 12 months, would result in the Partnership being considered to have
terminated within the meaning of Section 708 of the Code or would cause the
Partnership to lose its status as a partnership for federal income tax purposes,
or (ii) in any one calendar year more than 20% of the Units in the Partnership
then outstanding.  If less than all of the Units tendered are purchased, the
interests purchased will be selected by lot.  The Limited Partners whose
tendered Units were rejected by reason of the foregoing limitation shall be
entitled to priority in the following year.  Contemporaneously with the closing
of any such sale, the Limited Partner will execute such certificates or other
documents and perform such acts as the General Partner deems necessary to effect
the sale and transfer of the liquidating Limited Partner's Units to the General
Partner and to preserve the limited liability status of the Partnership under
the laws of the jurisdictions in which it is doing business.

     15.5 As used in Sections 15.3 and 15.4 above, the term "proved reserves"
shall have the meaning ascribed thereto in Regulation S-X adopted by the
Securities and Exchange Commission.

                                     A-31

<PAGE>
                                 ARTICLE XVI
                 Termination and Dissolution of Partnership

     16.1 The Partnership will terminate automatically on December 31, 2032,
unless prior thereto, subject to Section 12.1 above, the General Partner or
Limited Partners holding a majority of the outstanding Units elect to terminate
the Partnership as of an earlier date.  In the event of such earlier
termination, ninety (90) days' written notice will be given to all other
Partners.  The termination date will be specified in such notice and must be the
last day of any calendar month following expiration of the ninety (90) day
period unless an earlier date is approved by Limited Partners holding a majority
of the outstanding Units.

     16.2 Upon the dissolution (other than pursuant to a merger or other
corporate reorganization), bankruptcy, legal disability or withdrawal of the
General Partner (other than pursuant to Section 14.1 above), the Partnership
shall immediately be dissolved and terminated; provided, however, that nothing
in this Agreement shall impair, restrict or limit the rights and powers of the
Partners under the laws of the State of Oklahoma and any other jurisdiction in
which the Partnership is doing business to reform and reconstitute themselves as
a limited partnership within ninety (90) days following the dissolution of the
Partnership either under provisions identical to those set forth herein or under
any other provisions.  The withdrawal, expulsion, dissolution, death, legal
disability, bankruptcy or insolvency of any Limited Partner will not effect a
dissolution or termination of the Partnership.

     16.3 Upon termination of the Partnership by action of the Limited Partners
pursuant to Section 16.1 hereof or as a result of an event under Section 16.2
hereof, a party designated by the Limited Partners holding a majority of the
outstanding Units will act as Liquidating Trustee.  In any other case, the
General Partner will act as Liquidating Trustee.

     16.4 As soon as possible after December 31, 2032, or the date of the notice
of or event causing an earlier termination of the Partnership, the Liquidating
Trustee will begin to wind up the Partnership's business and affairs.  In this
regard:

          (a)  The Liquidating Trustee will furnish or obtain an accounting with
     respect to all Partnership accounts and the account of each Partner and
     with respect to the Partnership's assets and liabilities and its operations
     from the date of the last previous audit of the Partnership to the date of
     such dissolution;

          (b)  The Liquidating Trustee may, in its discretion, sell any or all
     productive and non-productive properties which, except in the case of an
     election by the General Partner to terminate the Partnership prior to the
     tenth anniversary of the Effective Date, may be sold to the General Partner
     or any of its affiliates for their fair market value as determined in good
     faith by the General Partner;

          (c)  The Liquidating Trustee shall:

               (i) pay all of the Partnership's debts, liabilities and
          obligations to its creditors, including the General Partner; and

                                     A-32

<PAGE>
               (ii) pay all expenses incurred in connection with the
          termination, liquidation and dissolution of the Partnership and
          distribution of its assets as herein provided;

          (d)  The Liquidating Trustee shall ascertain the fair market value by
     appraisal or other reasonable means of all assets of the Partnership
     remaining unsold, and each Partner's capital account shall be charged or
     credited, as the case may be, as if such property had been sold at such
     fair market value and the gain or loss realized thereby had been allocated
     to and among the Partners in accordance with Article VI hereof; and

          (e)  On or as soon as practicable after the effective date of the
     termination, all remaining cash and any other properties and assets of the
     Partnership not sold pursuant to the preceding subsections of this Section
     16.4 will be distributed to the Partners (i) in proportion to and to the
     extent of any remaining balances in the Partners' capital accounts and then
     (ii) in undivided interests to the Partners in the same proportions that
     Partnership Revenues are being shared at the time of such termination,
     provided, that:

               (i) the various interests distributed to the respective Partners
          will be distributed subject to such liens, encumbrances, restrictions,
          contracts, operating agreements, obligations, commitments or
          undertakings as existed with respect to such interests at the time
          they were acquired by the Partnership or were subsequently created or
          entered into by the Partnership;

               (ii) if interests in the Partnership Wells that are not subject
          to any operating agreement are to be distributed, the Partners will,
          concurrently with the distribution, enter into standard form operating
          agreements covering the subsequent operation of each such well which
          will, if the termination is effected pursuant to Section 16.1 above,
          be in a form satisfactory to the General Partner and will name the
          General Partner or its designee as operator; and

               (iii) no Partner shall be distributed an interest in any asset if
          the distribution would result in a deficit balance or increase the
          deficit balance in its capital account (after making the adjustments
          referred to in this Section 16.4 relating to distributions in kind).

     16.5 If the General Partner has a deficit balance in its capital account
following the distribution(s) provided for in Section 16.4(e) above, as
determined after taking into account all adjustments to its capital account for
the taxable year of the Partnership during which such distribution occurs, it
shall restore the amount of such deficit balance to the Partnership within
ninety (90) days and such amount shall be distributed to the other Partners in
accordance with their positive capital account balances.

     16.6 Notwithstanding anything to the contrary in this Agreement, upon the
dissolution and termination of the Partnership, the General Partner will
contribute to the Partnership the lesser of: (a) the deficit balance in its
capital account; or (b) the excess of 1.01 percent of the

                                     A-33

<PAGE>
total Capital Contributions of the Limited Partners over the capital previously
contributed by the General Partner.

                                 ARTICLE XVII
                                   Notices

     17.1 All notices, consents, requests, demands, offers, reports and other
communications required or permitted shall be deemed to be given or made when
personally delivered to the party entitled thereto, or when sent by United
States mail in a sealed envelope, with postage prepaid, addressed, if to the
General Partner, to 1000 Kensington Tower I, 7130 South Lewis Avenue, P.  O. Box
702500, Tulsa, Oklahoma 74136, and, if to a Limited Partner, to the address set
forth below such Limited Partner's signature on the counterpart of the
Subscription Agreement that he or she originally executed and delivered to the
General Partner.  The General Partner may change its address by giving notice to
all Limited Partners.  Limited Partners may change their address by giving
notice to the General Partner.

                                 ARTICLE XVIII
                                  Amendments

     18.1 Limited Partners do not have the right to propose amendments to this
Agreement.  The General Partner may propose an amendment or amendments to this
Agreement by mailing to the Limited Partners a notice describing the proposed
amendment and a form to be returned by the Limited Partners indicating whether
they oppose or approve of its adoption.  Such notice will include the text of
the proposed amendment, which will have been approved in advance by counsel for
the Partnership.  If, within sixty (60) days, or such shorter period as may be
designated by the General Partner, after any notice proposing an amendment or
amendments to this Agreement has been mailed, Limited Partners holding a
majority of the outstanding Units have properly executed and returned the form
indicating that they approve of and consent to adoption of the proposed
amendment, such amendment will become effective as of the date specified in such
notice, provided that no amendment which alters the allocations specified in
Article VI above, changes the compensation and reimbursement provisions set
forth in Article XI above or is otherwise materially adverse to the interests of
the Limited Partners will become effective unless approved by all Limited
Partners.  If an amendment does become effective, all Partners will promptly
evidence such effectiveness by executing such certificates and other instruments
as the General Partner may deem necessary or appropriate under the laws of the
jurisdictions in which the Partnership is then doing business in order to
reflect the amendment.

                                  ARTICLE XIX
                              General Provisions

     19.1 This Agreement embodies the entire understanding and agreement between
the Partners concerning the Partnership, and supersedes any and all prior
negotiations, understandings or agreements in regard thereto.

                                     A-34

<PAGE>
     19.2 In those cases where this Agreement requires opinions to be expressed
by, or actions to be approved by, counsel for Limited Partners, such counsel
must be qualified and experienced in the fields of federal income taxation and
partnership and securities laws.

     19.3 This Agreement and the Subscription Agreement may be executed in
multiple counterpart copies, each of which will be considered an original and
all of which constitute one and the same instrument.

     19.4 This Agreement will be deemed to have been executed and delivered in
the State of Oklahoma and will be construed and interpreted according to the
laws of that State.

     19.5 This Agreement and all of the terms and provisions hereof will be
binding upon and will inure to the benefit of the Partners and their respective
heirs, executors, administrators, trustees, successors and assigns.

     EXECUTED in the name of and on behalf of the undersigned General Partner
this 29th day of January 2002 but effective as of the Effective Date.

                                               "General Partner"
                                             UNIT PETROLEUM COMPANY
Attest:

By______________________________ By_________________________________
    Mark E. Schell, Secretary          John G. Nikkel, President

(CORPORATE SEAL)

                                     A-35

<PAGE>
                   LIMITED PARTNER SUBSCRIPTION AGREEMENT AND
                             SUITABILITY STATEMENT

                (ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

Unit 2002 Employee Oil and Gas Limited Partnership
c/o Unit Petroleum Company
1000 Kensington Center
7130 South Lewis Avenue
Tulsa, Oklahoma 74136

                                    RE:   Unit 2002 Employee  Oil and
                                          Gas Limited Partnership

Gentlemen:

     In connection with the subscription of the undersigned for units of limited
partnership interest ("Units") in the Unit 2002 Employee Oil and Gas Limited
Partnership (the "Partnership") which the undersigned tenders herewith to Unit
Petroleum Company (the "General Partner"), the undersigned is hereby furnishing
the Partnership and the General Partner the information set forth herein below
and makes the representations and warranties set forth below, to indicate
whether the undersigned is a suitable subscriber for Units in the Partnership.
As a condition precedent to investing in the Partnership, the undersigned hereby
represents, warrants, covenants and agrees as follows:

     1.   The undersigned acknowledges that he or she has received and reviewed
a copy of the Private Offering Memorandum (the "Offering Memorandum") dated
December 20, 2001 of the Unit 2002 Employee Oil and Gas Limited Partnership,
relating to the offering of Units in the Partnership, and all Exhibits thereto,
including the Agreement of Limited Partnership (the "Agreement"), and
understands that the Units will be offered to others on the terms and in the
manner described in the Offering Memorandum.  The undersigned hereby subscribes
for the number of Units set forth below pursuant to the terms of the Offering
Memorandum and tenders his or her Capital Subscription as required and agrees to
pay his or her Additional Assessments upon call or calls by the General Partner;
and the undersigned acknowledges that he or she shall have the right to withdraw
this subscription only up until the time the General Partner executes and
accepts the undersigned's subscription and that the General Partner may reject
any subscription for any reason without liability to it; and, further, the
undersigned agrees to comply with the terms of the Agreement and to execute any
and all further documents necessary in connection with his or her admission to
the Partnership.

     2.   The undersigned has reviewed and acknowledges execution of the Power
of Attorney set forth in the Agreement and elsewhere in this instrument.

                                     I-1

<PAGE>
     3.   The undersigned is aware that no federal or state regulatory agency
has made any findings or determination as to the fairness for public or private
investment, nor any recommendation or endorsement, of the purchase of Units as
an investment.

     4.   The undersigned recognizes the speculative nature and risks of loss
associated with oil and gas investments and that he or she may suffer a complete
loss of his or her investment.  The Units subscribed for hereby constitute an
investment which is suitable and consistent with his or her investment program
and that his or her financial situation enables him or her to bear the risks of
this investment.  The undersigned represents that he or she has adequate means
of providing for his or her current needs and possible personal contingencies,
and that he or she has no need for liquidity of this investment.

     5.   The undersigned confirms that he or she understands, and has fully
considered for purposes of this investment, the RISK FACTORS set forth in the
Offering Memorandum and that (i) the Units are speculative investments which
involve a high degree of risk of loss by the undersigned of his or her
investment therein, (ii) there is a risk that the anticipated tax benefits under
the Agreement could be challenged by the Internal Revenue Service or could be
affected by changes in the Internal Revenue Code of 1986, as amended, the
regulations thereunder or administrative or judicial interpretations thereof
thereby depriving Limited Partners of anticipated tax benefits, (iii) the
General Partner and its affiliates will engage in transactions with the
Partnership which may result in a profit and, in the future, may be engaged in
businesses which are competitive with that of the Partnership, and the
undersigned agrees and consents to such activities, even though there are
conflicts of interest inherent therein, and (iv) there are substantial
restrictions on the transferability of, and there will be no public market for,
the Units and, accordingly, it may be difficult for him or her to liquidate his
or her investment in the Units in case of emergency, if possible at all.

     6.   The undersigned confirms that in making his or her decision to
purchase the Units subscribed for he or she has relied upon independent
investigations made by him or her (or by his or her own professional tax and
other advisors) and that he or she has been given the opportunity to examine all
documents and to ask questions of, and to receive answers from the General
Partner or any person(s) acting on its behalf concerning the terms and
conditions of the offering or any other matter set forth in the Offering
Memorandum, and to obtain any additional information, to the extent the General
Partner possesses such information or can acquire it without unreasonable effort
or expense, necessary to verify the accuracy of the information set forth in the
Offering Memorandum, and that no representations have been made to him or her
and no offering materials have been furnished to him or her concerning the
Units, the Partnership, its business or prospects or other matters, except as
set forth in the Offering Memorandum and the other materials described in the
Offering Memorandum.

     7.   The undersigned understands that the Units are being offered and sold
under an exemption from registration provided by Sections 3(b) and/or 4(2) of
the Securities Act of 1933, as amended (the "Act"), and warrants and represents
that any Units subscribed for are being acquired by the undersigned solely for
his or her own account, for investment purposes only, and are not being
purchased with a view to or for the resale, distribution, subdivision or
fractionalization thereof; the undersigned has no agreement or other
arrangement, formal or

                                     I-2

<PAGE>
informal, with any person to sell, transfer or pledge any part of any Units
subscribed for or which would guarantee the undersigned any rights to such
Units; the undersigned has no plans to enter into any such agreement or
arrangement, and, consequently, he or she must bear the economic risk of the
investment for an indefinite period of time because the Units cannot be resold
or otherwise transferred unless subsequently registered under the Act (which
neither the General Partner nor the Partnership is obligated to do), or an
exemption from such registration is available and, in any event, unless
transferred in compliance with the Agreement.

     8.   The undersigned further understands that the exemption under Rule 144
of the Act will not be generally available because of the conditions and
limitations of such rule; that, in the absence of the availability of such rule,
any disposition by him or her of any portion of his or her investment will
require compliance under the Act; and that the Partnership and the General
Partner are under no obligation to take any action in furtherance of making such
exemption available.

     9.   The undersigned is aware that the General Partner will have full and
complete control of Partnership operations and that he or she must depend on the
General Partner to manage the Partnership profitably; and that a Limited Partner
does not have the same rights as a stockholder in a corporation or the
protection which stockholders might have, since limited partners have limited
rights in determining policy.

     10.  The undersigned is aware that the General Partner will receive
compensation for its services irrespective of the economic success of the
Partnership.

     11.  The undersigned represents and warrants as follows (please mark and
complete all applicable categories):

            (a)  If an individual, the undersigned is the sole party in
       interest, and the undersigned is at least 21 years of age and a bona fide
       resident and domiciliary (not a temporary or transient resident) of the
       state set forth opposite his or her signature hereto;

                    ____ YES       ____ NO

            (b)  If a partnership or corporation, the undersigned meets the
       following: (1) the entity has not been formed for the purposes of making
       this investment; (2) the entity was formed on ____________; and (3) the
       entity has a history of investments similar to the type described in the
       Offering Memorandum;

                    ____ YES       ____ NO

            (c)  The undersigned meets all suitability standards and
       acknowledges being aware of all legend conditions applicable to his or
       her state of residence as set forth herein;

                    ____ YES       ____ NO

                                     I-3

<PAGE>
            (d)  (i)  The undersigned has a net worth (including home,
       furnishings and automobiles) of at least five times the amount of his or
       her Capital Subscription, and anticipates that he or she will have
       adjusted gross income during the current year in an amount which will
       enable him or her to bear the economic risks of the investment in the
       Partnership;

                    ____ YES       ____ NO

          and

                 (ii) The undersigned is a salaried employee of Unit Corporation
       ("UNIT") or any of its subsidiaries at the date of formation of the
       Partnership whose annual base salary for 2002 has been set at $22,680 or
       more, or the undersigned is a director of UNIT;

                    ____ YES       ____ NO

          and

            (e)  The undersigned _____ is or _____ is not a citizen of the
       United States.

     12.  The undersigned represents and agrees that he or she has had
sufficient opportunity to make inquiries of the General Partner in order to
supplement information contained in the Offering Memorandum respecting the
offering, and that any information so requested has been made available to his
or her satisfaction, and he or she has had the opportunity to verify such
information.  The undersigned further agrees and represents that he or she has
knowledge and experience in business and financial matters, and with respect to
investments generally, and in particular, investments generally comparable to
the offering, so as to enable him or her to utilize such information to evaluate
the risks of this investment and to make an informed investment decision.  The
following is a brief description of the undersigned's experience in the
evaluation of other investments generally comparable to the offering:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

     13.  The undersigned is aware that the Partnership and the General Partner
have been and are relying upon the representations and warranties set forth in
this Limited Partner Subscription Agreement and Suitability Statement, in part,
in determining whether the offering meets the conditions specified in Rules of
the Securities and Exchange Commission and the exemption from registration
provided by Sections 3(b) and/or 4(2) of the Act.

     14.  All of the information which the undersigned has furnished the General
Partner herein or previously with respect to the undersigned's financial
position and business experience is correct and complete as of the date of this
Agreement, and, if there should be any material

                                     I-4

<PAGE>
change in such information prior to the closing of the offering period of the
Units, the undersigned will immediately furnish such revised or corrected
information to the General Partner.  The undersigned agrees that the foregoing
representations and warranties shall survive his or her admission to the
Partnership, as well as any acceptance or rejection of a subscription for the
Units.

     If the subscription tendered hereby of the undersigned is accepted by the
General Partner, the undersigned hereby executes and swears to the Agreement of
Limited Partnership of Unit 2002 Employee Oil and Gas Limited Partnership as a
Limited Partner, thereby agreeing to all the terms thereof and duly appoints the
General Partner, with full power of substitution, his or her true and lawful
attorney to execute, file, swear to and record any Certificate of Limited
Partnership or amendments thereto or cancellation thereof and any other
instruments which may be required by law in any jurisdiction to permit
qualification of the Partnership as a limited partnership or for any other
purposes necessary to implement the Partnership's purposes.

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE OKLAHOMA SECURITIES ACT OR
OTHER APPLICABLE STATE SECURITIES ACTS.  THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND/OR THE OKLAHOMA SECURITIES ACT, OR ANY OTHER APPLICABLE ACT, OR AN OPINION
OF COUNSEL TO UNIT 2002 EMPLOYEE OIL AND GAS LIMITED PARTNERSHIP THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT.

     The undersigned hereby subscribes for _____ Units (minimum subscription: 2
Units) at a price of $1,000 per Unit for a total Capital Subscription (as
defined in Article II of the Agreement) of $________________, which shall be due
and payable either:

     (Check One)

_______   (a) in four equal installments on March 15, 2002, June 15, 2002,
September 15, 2002 and December 15, 2002, respectively; or

_______   (b) through equal deductions from 2002 salary of the undersigned
commencing immediately after the Effective Date (as defined in Article II of the
Agreement).

                                     I-5

<PAGE>
                           RESIDENT
LIMITED PARTNER            ADDRESS
_______________            ________                    (If placing Units
                                                       in the name of spouse
________________________   _________________________   or trustee for minor
                                                       child or children,
________________________   _________________________   please provide name,
Signature                                              address of such
                                                       spouse or trustee and
________________________   Mailing Address             Social Security or Tax
Please Print Name          if different:               Identification Number)

                                                       TAX I.D. OR SOCIAL
                                                       SECURITY NO.
                           _________________________   ____________

Date: __________________   _________________________   __________________

ACCEPTED THIS _____ DAY OF __________________, 2002.

UNIT 2002 EMPLOYEE OIL AND GAS LIMITED PARTNERSHIP

By ____________________________________
     Authorized Officer of Unit
     Petroleum Company, General Partner

     Upon completion, an executed copy of this Limited Partner Subscription
Agreement and Suitability Statement should be returned to Unit 2002 Employee Oil
and Gas Limited Partnership, Attention Mark E. Schell, 1000 Kensington Tower I,
7130 South Lewis Avenue, Tulsa, Oklahoma, 74136.  The General Partner, after
acceptance, will return a copy of the accepted Subscription Agreement to the
Limited Partner.

                                     I-6

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