Range Resources
RRC
#2104
Rank
$9.30 B
Marketcap
$39.83
Share price
-0.47%
Change (1 day)
1.19%
Change (1 year)
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<TITLE>Range Resources Corp. Form 10-K405 for 12/31/99</TITLE>
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<A name="toc"><DIV align="CENTER"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

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<TR><TD colspan="9"><A HREF="#000"><B>FORM 10-K</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#001"><B>PART I</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002"><B>ITEM 1. BUSINESS</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003"><B>ITEM 2. PROPERTIES</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004"><B>ITEM 3. LEGAL PROCEEDINGS</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#005"><B>ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#006"><B>PART II</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#007"><B>ITEM 5. MARKET FOR THE COMMON STOCK AND RELATED MATTERS</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#008"><B>ITEM 6. SELECTED FINANCIAL DATA</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#009"><B>ITEM 7. MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#010"><B>ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#011"><B>ITEM 9. CHANGE IN ACCOUNTANTS AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#012"><B>PART III</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#013"><B>ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#014"><B>ITEM 11. COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#015"><B>ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#016"><B>ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#017"><B>PART IV</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#018"><B>ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#019"><B>SIGNATURES</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#020"><B>GLOSSARY</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#021"><B>INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#022"><B>REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#023"><B>CONSOLIDATED BALANCE SHEETS</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#024"><B>CONSOLIDATED STATEMENTS OF INCOME</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#025"><B>CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146; EQUITY</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#026"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#027"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#028"><B>(1)&nbsp;ORGANIZATION AND NATURE OF BUSINESS</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#029"><B>(2)&nbsp;SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#030"><B>(3)&nbsp;ACQUISITIONS</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#031"><B>(4)&nbsp;IPF RECEIVABLES</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#032"><B>(5)&nbsp;ASSETS HELD FOR SALE</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#033"><B>(6)&nbsp;INDEBTEDNESS</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#034"><B>(7)&nbsp;FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES:</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#035"><B>(8)&nbsp;COMMITMENTS AND CONTINGENCIES</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#036"><B>(9)&nbsp;EQUITY AND TRUST SECURITIES</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#037"><B>(10)&nbsp;STOCK OPTION AND PURCHASE PLAN</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#038"><B>(11)&nbsp;BENEFIT PLAN</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#039"><B>(12)&nbsp;INCOME TAXES</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#040"><B>(13)&nbsp;BUSINESS RESTRUCTURING COSTS</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#041"><B>(14)&nbsp;EARNINGS PER COMMON SHARE</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#042"><B>(15)&nbsp;MAJOR CUSTOMERS</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#043"><B>(16)&nbsp;OIL AND GAS ACTIVITIES</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#044"><B>(17)&nbsp;GAIN ON SALE</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#045"><B>(18)&nbsp;EXTRAORDINARY ITEM</B></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#046"><B>(19)&nbsp;UNAUDITED SUPPLEMENTAL RESERVE INFORMATION</B></A></TD></TR>
<TR><TD colspan="9"><A HREF="#047"><B>INDEX TO EXHIBITS</B></A></TD></TR>
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<P align="center"><B>SECURITIES AND EXCHANGE COMMISSION</B>

<P align="center">Washington, D.C. 20549

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<P><B>(Mark one)</B>

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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December&nbsp;31, 1999</FONT></TD>
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For the fiscal year ended December&nbsp;31, 1999</FONT></TD>
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE
REQUIRED)</FONT></TD>
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For the transaction period from _______ to _______</FONT></TD>
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<P align="center"><B>Commission File Number 0-9592</B>

<P align="center"><FONT size="4"><B>RANGE RESOURCES CORPORATION</B></FONT><BR>
(Exact name of registrant as specified in its charter)

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<TD valign="top" ALIGN="CENTER"><FONT size="2"><B>Delaware</B><BR>
(State of incorporation)</FONT></TD>
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<B>34-1312571</B><BR>
(I.R.S. Employer
Identification No.)</FONT></TD>
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<TD valign="top" ALIGN="CENTER"><FONT size="2"><B>500 Throckmorton Street, Ft. Worth, Texas</B><BR>
(Address of principal executive offices)</FONT></TD>
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<B>76102</B><BR>
(Zip Code)</FONT></TD>
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<P align="center">Registrant&#146;s telephone number, including area code:<BR>
(817)&nbsp;870-2601

<P align="center">Securities registered pursuant to Section&nbsp;12(b) of the Act:<BR>
None

<P align="center"><B>Common Stock, $.01 par value</B><BR>
(Title of class)

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<TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities registered pursuant to Section&nbsp;12(g) of the Act:
None</TD>
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the registrant (1)&nbsp;has filed all reports
required to be filed by Section&nbsp;13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12&nbsp;months (or for such shorter period that the
registrant was required to file such reports), and (2)&nbsp;has been subject to such
filing requirements for the past 90&nbsp;days. Yes <U>&nbsp;&nbsp;X&nbsp;&nbsp;</U> &nbsp;&nbsp;&nbsp;&nbsp; No<U>&nbsp;&nbsp;&nbsp;&nbsp;</U>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation&nbsp;S-K is not contained herein, and will not be contained, to
the best of registrant&#146;s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form&nbsp;10-K or any
amendment to this Form&nbsp;10-K. {X}

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The aggregate market value of voting stock of the registrant held by
non-affiliates (excluding voting shares held by officers and directors) was
$75.6&nbsp;million on March&nbsp;13, 2000.
Indicate the number of shares outstanding of each of the registrant&#146;s
classes of stock on March&nbsp;13, 2000: Common Stock $.01 par value: 39,847,179;
Preferred Stock $1 par value: 1,025,140.

<P align="center">DOCUMENTS INCORPORATED BY REFERENCE:

<P align="center">Part III of this report incorporates by reference the Proxy Statement relating to the Registrant&#146;s 2000<BR>
Annual Meeting of Stockholders.

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<P align="center"><B>RANGE RESOURCES CORPORATION</B>

<P align="center"><B>Annual Report on Form&nbsp;10-K<BR>
Year Ended December&nbsp;31, 1999</B>

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<P align="center"><B>PART I</B>

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<P align="left"><B>ITEM 1. BUSINESS</B>

<P align="left"><B>General</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Range Resources Corporation (&#147;Range&#148;) is engaged in the acquisition,
development and financing of oil and gas properties primarily in the Southwest
(Permian and Midcontinent), Gulf Coast and Appalachian regions of the United
States. The Company seeks to build value primarily through lower-risk
development drilling and acquisitions while to a lesser degree pursuing higher
risk exploitation and exploration projects on its extensive inventory of
undeveloped acreage. Through its wholly owned subsidiary, Independent Producer
Finance (&#147;IPF&#148;), the Company also provides financing to small oil and gas
producers by purchasing term overriding royalty interests in their
properties. The Company concentrates its activities in geographic areas in
which it seeks to establish operating, engineering, geological, land and
acquisition expertise. At December&nbsp;31, 1999, the Company had 616.7 Bcfe of
proved reserves, having a pre-tax present value of $555.6&nbsp;million at constant
prices of $23.48 per barrel and $2.34 per Mcf. On volumetric basis, the
reserves were 72% natural gas and 80% operated by the Company. As of December
31, 1999, the Company&#146;s properties had a reserve life index of over 11&nbsp;years.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the adverse impact of two sizeable acquisitions consummated in 1997
and 1998, the Company has been forced to retrench over the past 18&nbsp;months.
Subsequent to these purchases, production has fallen and further development of
each property has generally proved disappointing. In combination with the
steep fall in oil and gas prices between late 1997 and early 1999, the
substantial debt incurred by the Company in the acquisition transactions and
the decline in stock prices of independent oil companies during the same
period, the impact on the Company&#146;s results, balance sheet and market value has
been severe. Sharp reductions in staff and capital budgets, a series of
divestitures, the formation of the Great Lakes joint venture, the write-off of
a significant portion of the book value of the Company&#146;s properties and the
exchange of common equity for some of the Company&#146;s convertible securities have
stabilized the situation. The Company has set an internally funded capital
budget for the coming year designed to provide modest production
growth while permitting excess cash flow to reduce the Company&#146;s debt. However,
additional progress, particularly in reducing debt and associated fixed
charges, will be necessary before the Company is in the position to return to
its historical posture of consistent profitability and growth.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September&nbsp;1999, Range and FirstEnergy Corp.&nbsp;(&#147;FirstEnergy&#148;) contributed
their Appalachian oil and gas properties and associated gas pipeline systems to
a joint venture, Great Lakes Energy Partners L.L.C. (&#147;Great Lakes&#148;). To
achieve equal ownership in the venture, Range contributed $188.3&nbsp;million of
indebtedness and FirstEnergy contributed $2.0&nbsp;million of cash. Great Lakes
expects to increase its production and reserves through development of existing
fields, exploitation of deeper formations underlying its properties and the
pursuit of acquisition opportunities in Appalachia.

<P align="left"><B>Description of the Business</B>

<P align="left"><I>Strategy</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company primarily pursues lower risk development drilling and
acquisitions while, to a lesser degree, engages in higher risk exploitation and
exploration of its properties. Over the past ten years, total assets have
grown from $6&nbsp;million to $752&nbsp;million at year end 1999. During this same
period of time, stockholders&#146; equity increased from $1&nbsp;million to $127&nbsp;million.
In 1997 through 1999, the Company incurred losses totaling $206&nbsp;million, which
materially reduced total assets and stockholders&#146; equity. In 2000, the
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<P>Company&#146;s goal is to reduce debt as a percentage of capitalization by cutting
costs, selling non-strategic assets and limiting exploration and development
expenditures. The Company currently expects to use any proceeds from asset
sales to reduce outstanding bank debt. While the current 2000 capital budget
is anticipated to provide modest growth in production, management believes that
the cost reductions, the sale of assets, and the capital restructuring should
position Range to pursue growth initiatives in 2001.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company currently has over 2,100 proven recompletion and development
drilling projects in inventory. Given the recent rebound in oil and gas prices
and its extensive inventory of development projects, the Company believes it
can achieve growth in reserves, production, cash flow and earnings over the
next several years if it can reduce its debt burden. The Company currently
anticipates spending approximately $45.0&nbsp;million during 2000 on development and
exploration activities. The Company&#146;s leasehold position currently
approximates 1.8&nbsp;million gross acres (0.9&nbsp;million net), providing significant
long-term development and exploration potential.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To effectively implement its operating strategy, the Company has
concentrated its activities in selected geographic areas. In these areas, the
Company has established separate business units, each with operating,
engineering, geological, land and acquisition expertise. The Company believes
this focus provides a competitive advantage in sourcing and evaluating new
opportunities, as well as providing economies of scale in operating and
developing existing properties.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Development.&nbsp;</I>The Company&#146;s development activities include recompletions of
existing wells, infill drilling and installation of secondary recovery
projects. Development prospects are generated within core areas where the
Company has significant operational and technical experience. At December&nbsp;31,
1999, 1,750 proven undeveloped locations and 376 recompletion opportunities
were in inventory. The Company currently plans to perform 56 recompletions and
drill 177 development wells in 2000.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exploration.&nbsp;</I>Beginning in 1996, the Company began to explore on or near
its existing properties. Range currently has domestic onshore exploration
projects covering 573,500 gross (110,100 net) acres. The Company&#146;s onshore
exploration program targets deeper horizons within existing fields, as well as
establishing new fields in trend areas in which its technical staff has
experience. Range&#146;s offshore exploration program focuses on the shallow waters
of the Gulf of Mexico where it holds 3D seismic data covering 3.5&nbsp;million
contiguous acres. Range has offshore leases covering 50,500 gross acres on
which it has to date identified 15 projects. Range&#146;s strategy is based upon
limiting its risk by allocating no more than 10% to 20% of its capital budget
to exploration, allowing other companies to pay for the Company&#146;s costs in
order to earn an interest in our exploratory projects, and by participating in
a variety of projects. The Company currently anticipates participating in
drilling 22 exploratory wells in 2000.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Acquisitions.&nbsp;</I>The Company&#146;s acquisition strategy has historically been
based on: (i)&nbsp;Locale: focusing in core areas where the Company has operating
and technical expertise; (ii)&nbsp;Efficiency: targeting acquisitions which the
Company believes offer the possibility of operating and cost efficiencies,
(iii)&nbsp;Reserve Potential: pursuing properties which the Company believes have
the potential for reserve increases through recompletions and drilling; (iv)
Incremental Purchases: seeking acquisitions where opportunities may exist for
purchasing additional interests in the same or adjoining properties; and (v)
Complexity: pursuing more complex but less competitive corporate acquisitions.
In an effort to reduce debt, the Company expects to limit itself to pursuing
incremental purchases during 2000.

<P align="left"><B>Development and Exploration Activities</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 1999, the Company spent $37.4&nbsp;million on oil and gas related
capital expenditures. This represented a sharp reduction from the $81.5
million expended in 1998. Of this total, $9.4&nbsp;million was expended in the
Southwest, $3.9&nbsp;million in Appalachia and $24.1&nbsp;million in the Gulf Coast.
The expenditures in 1999 were primarily focused on converting proved but
non-producing reserves into producing reserves. These expenditures funded 41
recompletions, 45 development wells and 11 exploratory wells, as well as a
minor amount spent to acquire leases and seismic data. Exploration and

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<P>development spending converted 34.9 Bcfe of non-producing reserves to the
producing category production and added 12.9 Bcfe of new reserves<I>. </I>Reserves
added during the year replaced 19% of production.

<P align="left"><I>Development Activities</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s development activities include recompletions, infill
drilling and to a lesser extent, installation of secondary recovery projects.
As described below, the Company currently has 2,126 proven recompletion
opportunities and drilling locations in inventory. Those wells are
geographically diverse and target a mix of oil and gas in formations generally
at depths of less than 8,000 feet. Approximately 95% of the development wells
are concentrated in 12 fields covering 687,900 gross (528,605 net) acres. The
Company believes that such large acreage blocks and concentration of wells will
provide economies of scale, access to competitively priced oil field services
and focused operating and technical expertise. The following table sets forth
information pertaining to the Company&#146;s proven development inventory at
December&nbsp;31, 1999.

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<TD width="5%">&nbsp;</TD>
<TD width="38%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
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<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>Number of Development Projects</B></FONT></TD>
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<TD></TD>
<TD></TD>
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<TD colspan="11"><HR size="1"></TD>
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<TD nowrap align="center" colspan="3"><FONT size="2"><B>Recompletion</B></FONT></TD>
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<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Opportunities</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Drilling Locations</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
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<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
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<TD colspan="3"><HR size="1"></TD>
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<TR valign="bottom">
<TD colspan="2"><FONT size="2">Southwest</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">263</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">241</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">504</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
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<TD colspan="2"><FONT size="2">Gulf Coast</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">66</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">31</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">97</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
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<TD colspan="2"><FONT size="2">Appalachia</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">47</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,478</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,525</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
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<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">376</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,750</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,126</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><I>Exploration Activities</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Domestic Onshore.</I>&nbsp;Range currently has fifteen onshore exploration
projects covering 573,500 gross (110,100 net) acres. Each project has multiple
drilling prospects, some with multiple targets. Given the Company&#146;s current
capital constraints, only a limited amount of work will be done on these
projects in the coming year.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gulf of Mexico.&nbsp;</I>Range has a 3D seismic database covering 700 contiguous
blocks in the shallow waters of the Gulf of Mexico, primarily offshore
Louisiana. This database has been used to map geological trends within this
3.5&nbsp;million acre area, identifying specific targets for further exploration.
The Company&#146;s current offshore leasehold inventory totals 50,500 gross (15,155
net) acres and to fully exploit the 3D seismic data base it will be necessary
for the Company to farm-in or lease significant additional acreage. To date,
14 prospects have been identified. These prospects target the Miocene
formation at depths of 8,000 to 18,000 feet. Due to the Company&#146;s current
financial position, exploitation of the exploratory potential of these
properties has been largely deferred. As a result, the Company did not
participate in any offshore exploratory wells in 1999.

<P align="left"><B>Production</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Production revenue is generated through the sale of oil, natural gas
liquids and gas from properties owned directly or through partnerships and
joint ventures. The Company receives additional revenue from royalties on oil
and gas production properties the Company leases to third parties. While
production is sold to a limited number of purchasers, only two account for more
than 10% of oil and gas revenues. Management believes that the loss of any one
customer would not have a material adverse effect on the business. Proximity
to local markets, availability of competitive fuels and overall supply and
demand are factors affecting the prices at which production can be marketed.
Factors outside the Company&#146;s control such as political developments in the
Middle East, overall energy supply and demand, weather conditions and economic
growth rates and other economic factors in the United States and world
economies have had, and will continue to have, a significant effect on energy
prices.

<P align="center">4
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth historical production volumes, revenue and
expense information for the past five years (in thousands, except average sales
price and operating cost data).

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="34%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="19"><FONT size="2"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="19"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Production</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Crude oil (Bbl)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">913</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,018</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,371</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,175</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,247</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Natural gas liquids (Bbl)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">50</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">423</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">480</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">412</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Gas (Mcf)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,471</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,231</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">38,409</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45,193</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">50,808</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total (Mcfe) (a)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,949</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,641</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">49,170</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">61,120</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">66,763</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Revenues</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Crude oil (Bbl)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">15,133</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">19,912</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">24,967</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">26,119</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">33,075</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Natural gas liquids (Bbl)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">513</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,833</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,965</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,302</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Gas</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">22,284</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">47,629</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">101,217</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">105,509</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">108,115</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1" noshade></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">37,417</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">68,054</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">130,017</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">135,593</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">145,492</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Average Sales Price</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Crude oil (Bbl)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">16.57</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">19.56</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">18.22</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">12.01</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">14.72</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Natural gas liquids (Bbl)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">10.22</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">9.06</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">8.26</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">10.43</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Gas (Mcf)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1.79</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.24</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.64</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.33</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.13</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Mcfe (a)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.08</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.46</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.64</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.22</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.18</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Average Operating Cost</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Per Mcfe (a)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">0.63</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">0.75</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">0.64</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">0.64</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">0.65</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>


<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(a)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Oil and NGL are converted to Mcfe at a rate of 6 Mcf per barrel.</TD>
</TR>
</TABLE>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On a Mcfe basis, approximately 76% of 1999 production was natural gas.
Gas production was sold to utilities, marketing companies or directly to
industrial users. Gas sales are made pursuant to various arrangements ranging
from month-to-month contracts, one to three year contracts at fixed or variable
prices and contracts at fixed prices for the life of the well. All contracts
other than the fixed price contracts contain provisions for price adjustment,
termination and other terms customary in the industry. A number of the
Appalachian gas contracts are at prices that compare favorably to the current
spot market, although this may change over time. Oil is sold on a basis such
that the contract can be terminated on 30&nbsp;days notice. The price received is
generally equal to a posted price at which major purchasers in the area are
willing to pay for oil. Oil purchasers are selected on the basis of price and
service. In 1999, revenues from gas sales totaled $108&nbsp;million or 74% of total
oil and gas revenues while revenues from oil and natural gas liquids production
amounted to $37&nbsp;million, representing 26% of the total. Oil and gas revenues
in 1999 increased 7% over the prior year level.

<P align="left"><B>Gas Transportation, Processing and Marketing</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gas transportation, processing and marketing revenues are comprised of
fees for the transportation of production through gathering lines and fees from
gas processing as well as income from marketing of oil and gas.
Transportation, processing and marketing revenues increased 16% in 1999 to $7.8
million versus $6.7&nbsp;million in 1998.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s natural gas transportation and processing assets are
comprised of (i)&nbsp;50% ownership in approximately 4,700 miles of gas
transportation and gathering pipelines in Appalachia held through the Great
Lakes joint venture, (ii)&nbsp;nearly 300 miles of gathering lines and a gas
processing plant in the Sterling area of the Permian Basin and (iii)&nbsp;a number
of smaller transportation and gathering systems associated with existing
producing properties. The Appalachian gathering systems transport a majority
of Great Lakes&#146; gas production as well as third party gas to major trunklines
and directly to industrial end-users. Third parties who transport their gas
through the systems are charged a fee based on throughput. In its Southwest
and Gulf Coast areas, the Company transports its gas production through a
combination of Company-owned and third party gathering systems. The Company is
typically charged a fixed fee per volume of production to transport
<P align="center">5
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P>its gas through third party systems. The Company&#146;s Sterling gas processing plant is a
refrigerated turbo-expander cryogenic gas plant that was placed in service in
1995. In September&nbsp;1999, the Sterling gas processing plant was put up for
sale. The Company anticipates completing the sale of the plant in the second
quarter of 2000, with proceeds going to reduce debt.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To maximize the value of its production, the Company began marketing its
own gas production in 1993. The Company has managed the impact of potential
price declines by developing a balanced portfolio of fixed price and market
sensitive contracts and commodity hedging. Approximately 12% of its gas
production is currently sold pursuant to fixed price sales contracts. These
contracts are at prices ranging from $1.50 to $3.85 per Mcf. Contracts with
terms of less than one year and greater than five years constitute
approximately 99% and 1%, respectively, of the volume sold under fixed price
contracts.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Periodically, the Company enters into option and swap contracts to reduce
the effects of fluctuations in crude oil and natural gas prices. At December
31, 1999, the Company had open hedges covering 24.8 Bcf of natural gas and 0.8
million barrels of oil. While these transactions have no carrying value, the
fair value of these transactions (represented by the estimated amount that
would be required to terminate the contracts), was a net gain of approximately
$0.3&nbsp;million at December&nbsp;31, 1999. The gas contracts were at prices ranging
from $2.00 to $3.17 per Mmbtu and the oil contracts range from $19.01 to $25.00
per Bbl. Gains or losses on hedging transactions are determined as the
difference between the contract price and a reference price, generally closing
prices on NYMEX. Resulting gains or losses are determined monthly and included
in the revenues in the period the hedged production is sold. Net gains
(losses)&nbsp;relating to these derivative transactions for the year ended December
31, 1998 and 1999, approximated $3.1&nbsp;million and $(10.6) million, respectively.
In the future, the Company may hedge a larger percentage of its production,
however, it currently anticipates that such percentage would not exceed 80%
during any rolling twelve month period. Although hedging provides the Company
some protection against falling prices, these activities also reduce the
potential benefits of price increases.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Independent Producer Finance (&#147;IPF&#148;)</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IPF provides capital to small oil and gas producers to finance acquisition
and development projects. IPF advances money in exchange for a term overriding
royalty interest in the projects being financed. The overrides are
dollar-denominated and are calculated to provide IPF with a contractually
specified rate of return that typically ranges between 15% and 25%. Most of
IPF&#146;s advances are for less than $5&nbsp;million. IPF funds its business through a
combination of internal cash flow and bank borrowings. At December&nbsp;31, 1999,
IPF&#146;s portfolio included 61 transactions having an aggregate book value of
$65.4&nbsp;million (net of $17.3&nbsp;million of allowances). The reserves and present
value of the reserves underlying IPF advances are not included in Range&#146;s
consolidated oil and gas reserve disclosure. IPF provides allowances for
advances, which may be unrecoverable. These allowances reduce IPF&#146;s reported
revenues. During 1999, IPF provided $3.3&nbsp;million in allowances, which reduced
its reported revenues from $11.2&nbsp;million to $7.9&nbsp;million. IPF expenses in 1999
included $1.5&nbsp;million of general and administrative costs and $4.3&nbsp;million of
interest expense At current commodity prices, the Company believes that IPF&#146;s
bad debt reserves are adequate.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IPF has three petroleum engineers and geologists who identify and evaluate
projects. These personnel all hold degrees in petroleum engineering or
geology. The staff averages 17&nbsp;years of experience in operations, strategic
planning, analysis and production engineering. The professionals are
responsible for defining transaction risk, establishing reserve coverage and
negotiating the contractual rate of return. IPF structures the transactions
with a goal to minimize risk by focusing on asset coverage ratios and taking
direct title to the overriding royalty interests. As dollar-denominated term
overriding royalties, the transactions leave much of the commodity price risk
with the producer.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IPF provides capital to small oil and gas producers who are generally
ignored by traditional financial institutions. These producers typically are
denied access to traditional financing arrangements because: (i)&nbsp;they are too
small to access public debt and equity markets; (ii)&nbsp;private equity and debt
financing is too restrictive and expensive; and (iii)&nbsp;few commercial banks are
interested in small energy

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<P>loans; as consolidation in the banking industry has raised the size threshold for lending. IPF&#146;s portfolio decreased in 1999 as a
limited number of fundings were more than offset by principal repayments. The
Company expects demand for IPF funding to rise, as oil and gas acquisition and
divestiture activities continue and consolidation of the banking industry
reduces the supply of traditional bank financing for small transactions. IPF&#146;s
bank debt is recourse only to the assets of IPF. In December&nbsp;1999, IPF
established a new revolving credit facility. The $100&nbsp;million facility had an
initial borrowing base of $56&nbsp;million. On March&nbsp;13, 2000, $42.4&nbsp;million was
borrowed under the facility.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IPF investments involve an up-front cash payment for the purchase of a
term overriding royalty interest pursuant to which IPF receives an agreed upon
share of revenues from specific properties. The producer&#146;s obligation to IPF
is non-recourse. The producer generally is only liable if he fails to operate
prudently, there is a title failure or certain other events occur which are
within the producer&#146;s control. Consequently, IPF&#146;s ability to successfully
invest is based on its ability to accurately estimate the volumes of
recoverable reserves from which the applicable production payment is dedicated,
the price at which the production will be sold, and the operator&#146;s ability to
recover the reserves on a time schedule with the projected production rates.
Because IPF&#146;s interest constitutes a property interest, if a producer is
declared bankrupt or insolvent, our interest should be outside of the reach of
the producer&#146;s creditors. However, if a creditor, the producer as
debtor-in-possession or a trustee for the producer in a bankruptcy proceeding
were to argue successfully that the transaction should be characterized as a
loan, we may have only a creditor&#146;s claim for repayment of the amounts
advanced. Our ownership in these production payments is a non-operating
interest. As a result, our ownership of these production payments are likely
to not expose us to liability resulting from the ownership of direct working
interests, such as environmental liabilities and liabilities for personal
injury or death or property damage. Finally, the producer&#146;s obligation to
deliver a specified share of revenues to us is subject to the ability of the
burdened reserves to produce such revenues. As a result, IPF bears the risk
that revenues received will be insufficient to amortize the purchase price IPF
paid for the property interest or to provide IPF an acceptable return.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IPF was acquired effective August 1998 with the Merger. The following table summarizes IPF&#146;s historical investments:


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="39%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="19"><FONT size="2"><B>Periods ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="19"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Total dollars of advances</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">5,489</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">19,100</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">40,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">45,822</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">4,259</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Number of advances made</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">39</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">75</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">30</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Average size of advance</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">549</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">707</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,029</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">611</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">142</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><B>Interest and Other</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company earns interest on its cash and investment accounts, as well as
on various receivables. Other income in 1999 was comprised principally of
gains on sales of marketable equity securities and gains on sales of
non-strategic properties. The Company expects to continue to sell properties
that are not strategic. Interest and other income in 1999 amounted to $40.2
million, representing 20% of total revenues. Interest and other income
included a $39.8&nbsp;million proportional gain recognized on the Great Lakes
transaction (See Note (17) &#150; Gain on Sale).

<P align="left"><B>Competition</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company encounters substantial competition in acquiring oil and gas
leases and properties, marketing oil and gas, securing personnel and conducting
its drilling and field operations. Many competitors have financial and other
resources, which substantially exceed those of the Company. The competitors in
development, exploration, acquisitions and production include the major oil
companies in addition to numerous independents, individual proprietors and
others. Therefore, competitors may be able to pay more for desirable leases
and to evaluate, bid for and purchase a greater number of properties or
prospects than the financial or personnel resources of the Company permit. The
ability of the Company to replace and expand its reserve base in the future
will depend on its ability to select and acquire suitable producing properties
and prospects for future drilling.

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s acquisitions have been largely financed through issuances of
debt and equity securities and internally generated cash flow. There is
competition for capital to finance oil and gas acquisitions and drilling. The
ability of the Company to obtain such financing on satisfactory terms is
uncertain and can be affected by numerous factors beyond its control. The
inability of the Company to raise external capital in the future could have a
material adverse effect on its business.

<P align="left"><B>Governmental Regulation</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s operations are affected in varying degrees by federal, state
and local laws and regulations. In particular, oil and natural gas production
and related operations are or have been subject to price controls, taxes and
other laws and regulations relating to the oil and gas industry. Failure to
comply with such laws and regulations can result in substantial penalties. The
regulatory burden on the oil and natural gas industry increases the Company&#146;s
cost of doing business and affects its profitability. Although the Company
believes it is in substantial compliance with all applicable laws and
regulations, because such laws and regulations are frequently amended or
reinterpreted, the Company is unable to precisely predict the future cost or
impact of complying with such laws and regulations.

<P align="left"><B>Capital Restructuring Program</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of two significant acquisitions completed in 1997 and 1998
financed principally with debt and fixed rate convertible securities and due to
the poor performance of the acquired properties as well as the significant drop
in oil and gas prices between late 1997 and 1999, the Company undertook a
number of initiatives. These include a reduction in workforce, a significant
decrease in capital expenditures, the sale of assets, the formation of the
Great Lakes joint venture and the exchange of Common Stock for fixed rate
securities. These initiatives resulted in the Company reducing its parent
company bank debt in 1999 by over 60% to $140&nbsp;million at year end. Total debt
was reduced 24% during 1999 to $459&nbsp;million. While management believes these
actions have stabilized the Company&#146;s financial position, debt to total
capitalization at December&nbsp;31, 1999 remained high at 65%. For the Company to
return to its historical posture of consistent profitability and growth,
management believes it is necessary for the Company to further reduce debt and
associated fixed financing costs. In addition to further asset sales, the
Company currently anticipates it will significantly increase its efforts to
exchange Common Stock or other equity linked securities for its existing fixed
rate securities or reduce debt and associated financing costs through some
other substantial restructuring initiative. While the Company expects to
exchange the fixed rate securities at a substantial discount to their face
value, the Company&#146;s existing common stockholders will be materially diluted
if a material portion of the fixed rate securities are exchanged. The dilutive
effect to the common stockholders will depend upon a number of factors, the
primary ones being the number of shares and the price at which additional
Common Stock is issued or the price which newly issued securities are
convertible into Common Stock. While a restructuring would reduce the existing
stockholders&#146; proportional ownership of the Company, management believes that a
restructuring would substantially increase its ability to enhance the value of
the Company as well as the market value of the Common Stock. Any substantial
restructuring will require mutually satisfactory agreements with a large
majority of the parties holding the Company&#146;s existing convertible securities.
Additionally, to insure that a sufficient number of shares of Common Stock are
available, it is likely that the Company&#146;s stockholders would need to approve
increasing the number of authorized shares of Common Stock. While the Company
currently projects that it has sufficient liquidity and cash flow to meet its
obligations, a drop in oil and gas prices or further reduction in production
and reserves will reduce the Company&#146;s ability to fund capital expenditures and
meets its obligations. This could have a detrimental effect on the Company&#146;s
ability to complete its capital restructuring program in a timely manner.

<P align="left"><B>Environmental Matters</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s oil and natural gas exploration, development, production and
pipeline gathering operations are subject to stringent federal, state and local
laws governing the discharge of materials into the environment or otherwise
relating to environmental protection.

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<P>Numerous governmental departments such
as the Environmental Protection Agency (&#147;EPA&#148;) issue regulations to implement and enforce such laws, which are often difficult and costly to comply with and
which carry substantial civil and criminal penalties for failure to comply.
These laws and regulations may require the acquisition of a permit before
drilling commences, restrict the types, quantities and concentrations of
various substances that can be released into the environment in connection with
drilling, production and pipeline gathering activities, limit or prohibit
drilling activities on certain lands lying within wilderness, wetlands,
frontier and other protected areas, require some form of remedial action to
prevent pollution from former operations such as plugging abandoned wells, and
impose substantial liabilities for pollution resulting from the Company&#146;s
operations. In addition, these laws, rules and regulations may restrict the
rate of oil and natural gas production below the rate that would otherwise
exist. The regulatory burden on the oil and gas industry increases the cost of
doing business and consequently affects its profitability. Changes in
environmental laws and regulations occur frequently, and any changes that
result in more stringent and costly waste handling, disposal or clean-up
requirements could adversely affect the Company&#146;s operations and financial
position, as well as the oil and gas industry in general. While management
believes that the Company is in substantial compliance with current applicable
environmental laws and regulations and the Company has not experienced any
material adverse effect from compliance with these environmental requirements,
there is no assurance that this will continue in the future. The Company did
not have any material capital expenditures in connection with environment
regulation in 1999, nor does it anticipate any material such expenditures in
2000.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Comprehensive Environmental Response, Compensation and Liability Act
(&#147;CERCLA&#148;), also known as the &#147;Superfund&#148; law, imposes liability, without
regard to fault or the legality of the original conduct, on certain classes of
persons who are considered to be responsible for the release of a &#147;hazardous
substance&#148; into the environment. These persons include the owner or operator of
the disposal site or sites where the release occurred and companies that
disposed of or arranged for the disposal of the hazardous substances at the
site where the release occurred. Under CERCLA, such persons may be subject to
joint and several liability for the costs of cleaning up the hazardous
substances that have been released into the environment, for damages to natural
resources and for the costs of certain health studies and it is not uncommon
for neighboring landowners and other third parties to file claims for personal
injury and property damages allegedly caused by the release of hazardous
substances or other pollutants into the environment. Furthermore, although
petroleum, including crude oil and natural gas, is exempt from CERCLA, at least
two courts have ruled that certain wastes associated with the production of
crude oil may be classified as &#147;hazardous substances&#148; under CERCLA and thus
such wastes may become subject to liability and regulation under CERCLA. State
initiatives to further regulate the disposal of oil and natural gas wastes are
also pending in certain states, and these various initiatives could have a
significant impact on the Company.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stricter standards in environmental legislation may be imposed in the oil
and gas industry in the future. For instance, legislation has been proposed in
Congress from time to time that would reclassify certain oil and natural gas
exploration and production wastes as &#147;hazardous wastes&#148; and make the
reclassified wastes subject to more stringent handling, disposal and clean-up
restrictions. If such legislation were to be enacted, it could have a
significant impact on the operating costs of the Company, as well as the oil
and gas industry in general. Compliance with environmental requirements
generally could have a material adverse effect upon the capital expenditures,
earnings or competitive position of the Company. Although the Company has not
experienced any material adverse effect from compliance with environmental
requirements, no assurance may be given that this will continue in the future.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Federal Water Pollution Control Act (&#147;FWPCA&#148;) imposes restrictions and
strict controls regarding the discharge of produced waters and other oil and
gas wastes into navigable waters. Permits must be obtained to discharge
pollutants into state and federal waters. The FWPCA and analogous state laws
provide for civil, criminal and administrative penalties for any unauthorized
discharges of oil and other hazardous substances in reportable quantities and
may impose substantial potential liability for the costs of removal,
remediation and damages. State water discharge regulations and the federal
(NPDES)&nbsp;permits prohibit or are expected to prohibit within the next year the
discharge of produced water and sand, and some other substances related to the
oil and gas industry, to coastal waters. Although the costs to

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<P>comply with zero discharge mandated under federal or state law may be significant, the entire
industry will experience similar costs and the Company believes that these
costs will not have a material adverse impact on the Company&#146;s financial
condition and results of operations. Some oil and gas exploration and
production facilities are required to obtain permits for their storm water
discharges. Costs may be incurred in connection with treatment of wastewater or
developing storm water pollution prevention plans.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Resources Conservation and Recovery Act (&#147;RCRA&#148;), as amended,
generally does not regulate most wastes generated by the exploration and
production of oil and natural gas. RCRA specifically excludes from the
definition of hazardous waste &#147;drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude
oil, natural gas or geothermal energy.&#148; However, these wastes may be regulated
by the EPA or state agencies as solid waste. Moreover, ordinary industrial
wastes, such as paint wastes, waste solvents, laboratory wastes and waste
compressor oils, are regulated as hazardous wastes. Although the costs of
managing solid hazardous waste may be significant, the Company does not expect
to experience more burdensome costs than similarly situated companies involved
in oil and gas exploration and production.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the U.S. Oil Pollution Act (&#147;OPA&#148;) requires owners and
operators of facilities that could be the source of an oil spill into &#147;waters
of the United States&#148; (a term defined to include rivers, creeks, wetlands and
coastal waters) to adopt and implement plans and procedures to prevent any
spill of oil into any waters of the United States. OPA also requires affected
facility owners and operators to demonstrate that they have at least $35
million in financial resources to pay for the costs of cleaning up an oil spill
and compensating any parties damaged by an oil spill. Substantial civil and
criminal fines and penalties can be imposed for violations of OPA and other
environmental statutes.

<P><B>Risk Factors and Cautionary Statement for purposes of the Safe Harbor
Provisions of the Private Securities Litigation Reform Act of 1995</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain information included in this report, other materials filed or to
be filed by the Company with the SEC, as well as information included in oral
statements or other written statements made or to be made by the Company
contain or incorporate by reference certain statements (other than statements
of historical fact) that constitute forward-looking statements within the
meaning of Section&nbsp;27A of the Securities Act of 1933 and Section&nbsp;21E of the
Securities Exchange Act of 1934. When used herein, the words &#147;budget,&#148;
&#147;budgeted,&#148; &#147;assumes,&#148; &#147;should,&#148; &#147;goal,&#148; &#147;anticipates,&#148; &#147;expects,&#148; &#147;believes,&#148;
&#147;seeks,&#148; &#147;plans,&#148; &#147;estimates,&#148; &#147;intends,&#148; &#147; or &#147;projects&#148; and similar
expressions that convey the uncertainty of future events or outcomes are
intended to identify forward-looking statements. Where any forward-looking
statement includes a statement of the assumptions or bases underlying such
forward-looking statement, we caution that while we believe these assumptions
or bases to be reasonable and to be made in good faith, assumed facts or bases
almost always vary from actual results and the difference between assumed facts
or bases and the actual results could be material, depending on the
circumstances. It is important to note that our actual results could differ
materially from those projected by such forward-looking statements. Although
we believe that the expectations reflected in such forward-looking statements
are reasonable and such forward-looking statements are based upon the best data
available at the date of this report is filed with the Securities and Exchange
Commission, we cannot assure you that such expectations will prove correct.
Factors that could cause our results to differ materially from the results
discussed in such forward looking statements include, but are not limited to,
the following: production variance from expectations, volatility of oil and
gas prices, hedging results, the need to develop and replace reserves, the
substantial capital expenditures required to fund operations, exploration
risks, environmental risks, uncertainties about estimates of reserves,
competition, litigation, government regulation, political risks, and our
ability to implement our business strategy. All such forward-looking
statements in this document are expressly qualified in their entirety by the
cautionary statements in this paragraph.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With the previous paragraph in mind, you should consider the following
important factors that could cause actual results to differ materially from
those expressed in any forward-looking statement made by us or on our behalf.

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<P align="left"><I>Current common shareholders will be diluted as more common shares are issued.</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has filed a shelf registration statement to allow the Company
to issue additional common stock. The Company in 1999 and in early 2000 has
exchanged its common stock for its 5.75% trust convertible preferred
securities, 6% convertible debentures, and $2.03 convertible exchangeable
preferred stock. Such exchanges have been made based upon the relative market
value of common stock and the market value of convertible security at the time
of the exchange with a five to eight percent premium. The convertible
securities were acquired at 35% to 68% discounts to the face value of such
securities. The exchanges will reduce interest expense, dividends and the
Company&#146;s future repayment obligations. However, the larger number of common
shares outstanding and any additional shares issued in the future will have a
dilutive effect on the existing shareholders of the Company.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has announced that the Company is actively reviewing
alternatives to restructure the Company&#146;s balance sheet to reduce the amount of
future obligations under the Company&#146;s convertible securities. The Company
expects under any alternative selected that a large number of the Company&#146;s
common stock will have to be issued to retire or purchase such securities.
Therefore, the actual number of shares issued for such securities less the face
value of the securities retired will dilute the current shareholders.

<P align="left"><I>The Company intends to change the capital structure</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company currently anticipates it will significantly increase its
efforts to exchange common stock or other equity linked securities for its
existing fixed income securities. While the Company expects to exchange the
fixed rate securities at a substantial discount to their face value, the
Company&#146;s existing common stockholders will be materially diluted if a material
portion of the fixed income securities are exchanged.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The dilutive effect to the common shareholders will depend upon a number
of factors. The primary ones are (a)&nbsp;the number of shares issued, and (b)&nbsp;the
price of the additional common stock issued or the price that newly issued
securities are convertible into common stock. Any significant restructuring
would reduce the existing stockholders&#146; proportional ownership of the Company.
However, management believes that a restructuring could substantially increase
management&#146;s ability to enhance the value of the Company as well as the market
value of the common stock. It is expected that any significant restructuring
will require both the agreement of the existing stockholders and those parties
holding the existing convertible securities. Additionally, the Company&#146;s
stockholders would need to approve increasing the number of authorized shares
of common stock to insure that a sufficient number of shares of common stock
are available under a restructuring plan.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While the Company currently projects that it has sufficient liquidity and
cash flow to meet its obligations, a drop in oil and gas prices or further
reduction in production and reserves will reduce the Company&#146;s ability to fund
capital expenditures and meets its obligations. Any of these occurrences could
have a detrimental effect on the Company&#146;s ability to complete its capital
restructuring program in a timely manner.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s ability to change its capital structure and the terms which
we are able to make any changes is dependent on a variety of factors beyond our
control such as the level and differentials of various interest rates, the
willingness of other parties to engage in transactions, state and federal
regulations covering such transactions, and the overall economic conditions in
the capital markets assessable by the Company.

<P align="left"><I>Payment of dividends are restricted</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restrictions on the payment of dividends on the Company&#146;s $2.03
convertible exchangeable preferred stock and common stock are contained in the
Company&#146;s senior secured bank debt and the 8.75% senior subordinated notes.

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under terms of the 8.75% Senior Subordinated Notes, the Company may pay
restrictive payments, which includes dividends. The restrictive payments may
equal the higher of $20&nbsp;million or a formula, which include earnings and losses
since the issuance of the senior subordinated notes. Given the Company&#146;s
losses since 1997, the Company can not pay dividends under the formula and,
therefore, must rely on the initial $20&nbsp;million basket amount. At December&nbsp;31,
1999, $12.7&nbsp;million of the $20&nbsp;million basket had been used thus leaving $7.3
million available under the basket for payment of dividends.

<P align="left"><I>Oil and gas prices are volatile, which can adversely affect cash flow available
for reinvestment.</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prices for oil and gas are volatile. The oil and gas industry can be
highly cyclical and historically has experienced severe downturns characterized
by oversupply and weak demand. Many factors affect the prices for our oil and
gas production including general economic conditions, consumer preferences,
discretionary spending levels, interest rates and the availability of credit
and capital to provide new production. During the latter part of 1998 and
early 1999, oil and gas prices were significantly lower than the prices that we
are currently receiving. This was a factor in those periods when we reported
substantial losses. Decreases in oil and gas prices from current levels will
adversely affect our revenues, results of operations, cash flows and proved
reserves. If the industry experiences significant and prolonged price
decreases in the future, this could have a materially adverse effect on our
operations and could result in our inability to fund planned capital
expenditures.

<P align="left"><I>Our hedging activities expose us to certain risks.</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We enter into hedging arrangements relating to a portion of our oil and
gas production to achieve more predictable cash flow, insure a level of cash
flow to fund our capital spending plans, as well as to reduce our exposure to
adverse price fluctuations of oil and gas. Hedging instruments used include
fixed price swaps, collars, calls, and options. While the use of these types
of hedging instruments limits our exposure to adverse price movements, they are
subject to a number of risks, including limiting the benefit of commodity price
increases and the nonperformance financial risks of the other party accepting
our hedge.

<P align="left"><I>Estimates of our oil and gas reserves may change; we may not be able to replace
reserves</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The calculations of our proved oil and gas reserves included in this
document are only estimates. The accuracy of any reserve estimate is a
function of the quality of available data; engineering and geological
interpretation and judgment; the assumptions used regarding quantities of
recoverable oil and gas reserves; and prices for oil and gas. Actual prices,
production, development expenditures, operating expenses and quantities of
recoverable oil and gas reserves will vary from those assumed in our estimates,
and such variances may be significant. If the assumptions used to estimate our
reserves later prove to be incorrect in any way, the actual quantity of our
reserves and future net cash flow could be materially different from the
estimates in our reserve reports. In addition, results of drilling, testing,
and producing with changes in oil and gas prices after the date of the estimate
may result in substantial upward or downward revisions.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Without successful exploration, development or acquisition activities, our
reserves and revenues will decline over time. Exploration, the continuing
development of our reserves and acquisition activities will require significant
expenditures. If our cash flow from operations is not sufficient for this
purpose, we may not be able to obtain the funds from other sources necessary to
continue such exploration, development and acquisition activities.

<P align="left"><I>We may have write downs of oil and gas properties&#146; carrying value</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting rules require that we periodically review the carrying value of
our oil and gas properties for possible impairment. An &#147;impairment&#148; is
recognized when the unamortized cost of a property included on the Company&#146;s
balance sheet is greater than the expected undiscounted future cash

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<P>flows from the property. We may be required to write down the carrying value of our oil
and gas properties based on specific market factors and circumstances at the
time of the prospective impairment review, and the continuing evaluation of
development plans, production data, economics and other factors. A write down
constitutes a current non-cash charge to earnings generally associated with
costs spent in prior years. An impairment charge does not impact our cash flow
from operating activities.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based primarily on our long-term outlook for future commodities prices and
the production performance of certain properties, we recorded impairment
charges of $197&nbsp;million in 1998 and $27&nbsp;million in 1999. For a further
discussion of our accounting policies with respect to oil and gas properties,
see Note 1 to the Consolidated Financial Statements.

<P align="left"><I>We could incur substantial environmental liabilities</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our industry is subject to numerous federal, state and local laws and
regulations relating to environmental protection. We may incur significant
costs and liabilities in complying with existing or future environmental laws
and regulations. It is also possible that other developments, such as
increasingly strict environmental laws, regulations and enforcement policies
thereunder, and claim for damages to property, employees, other persons and the
environment resulting from current or discontinued operations, could result in
substantial costs and liabilities in the future. For additional information
concerning environmental matters, see the &#147;Environmental Matters&#148; section
included in this report.

<P align="left"><I>Our activities involve operating hazards and uninsured risks</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While we maintain insurance against certain of the risks normally
associated with our operations, including, but not limited to explosion,
pollution and fires, the occurrence of a significant event against which we are
not fully insured could have a significant negative effect on our business.
Such occurrences could include title defects on properties owned or acquired
from others, lost equipment in drilling operations which our drilling
contractor is not responsible for such loss, costs to redrill wells due to down
hole equipment and casing failures, and property damage caused over a period of
time not covered by standard industry insurance policies.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We maintain insurance policies covering our operations in amounts and
areas of coverage normal for a company of our size in the oil industry. These
include, but are not limited to, workers&#146; compensation, employers&#146; liability,
automotive liability and general liability. In addition, umbrella liability
and operator&#146;s extra expense policies are maintained. All such insurance is
subject to normal deductible levels. We do not insure against all risks
associated with our business either because insurance is not available or
because we have elected not to insure due to prohibitive premium costs or other
considerations.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In today&#146;s legal climate, a number of individuals or companies may feel
that the Company or those acting on behalf of the Company damaged or harmed
such parties either physically or financially. Such parties have the right
under the law to seek recovery of those damages in court. Since the likelihood
of the results of the verdict or judgment of the courts are uncertain, the
Company may elect to settle such claims outside the judicial system. Those
settlements may not be covered by insurance and such payments might have to be
borne solely by the Company. The Company may elect to contest such claims but
still be held liable by the courts. Many times the cost of defending oneself
or the costs incurred defending the rights of the Company cannot be recovered
from the other parties. Such legal and out of pocket costs must be borne
solely by the Company and included in its general and administrative expenses.
Such costs and settlements could have a material effect on our earnings. See
Item&nbsp;3 &#147;Legal Proceedings&#148; included in this report and Note 8 to Consolidated
Financial Statements as to certain proceedings and contingencies of the
Company.

<P align="left"><I>We are subject to financing and interest rate exposure risks</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business and operating results can be harmed by factors such as the
availability or cost of capital, changes in interest rates, changes in the tax
rates due to new tax laws, market perceptions of the oil

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<P>and gas industry or the Company, or any reduction in our credit ratings. These changes could cause
our cost of doing business to increase or limit our ability to exploit
opportunities in the market place.

<P align="left"><I>We face stiff competition</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We face competition in all aspects of our business, including, but not
limited to, acquiring reserves, leases, obtaining goods, services, and labor
needed to conduct operations and manage the Company, and marketing oil and gas.
Our competitors include multinational energy companies, other independent
producers and individual producers and operators. Many of our competitors have
greater financial and other resources than the Company.

<P align="left"><I>Crude oil and natural gas are subject to extensive regulation</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The petroleum industry is subject to various types of regulations in the
United States by local, state and federal agencies. Domestic legislation
affecting the oil and gas industry is under constant review for amendment or
expansion, frequently increasing the regulatory burden. Also, numerous
departments and agencies, both state and federal, are authorized by statute to
issue and have issued rules and regulations binding on the oil and gas industry
and its individual members. Compliance with such rules and regulations is
often difficult and costly and may carry substantial penalties for
non-compliance. As the regulatory burden on the oil and gas industry
increases, the cost of doing business affects profitability. Generally these
burdens do not appear to affect the Company any differently or to any greater
or lesser extent than other companies in the industry with similar types,
quantities and location of production. While we are a party to several
regulatory proceedings before governmental agencies arising in the ordinary
course of business, we do not believe that the outcome of such proceedings will
have a material adverse effect on our operations or financial condition.

<P align="left"><I>Our level of fixed charges could have important consequences to our liquidity, profitability and cash flow</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has a significant amount of annual fixed charges associated with
senior secured bank debt, 8.75% senior subordinated notes, 6% convertible debentures,
non-recourse bank debt of subsidiaries, 5.75% trust convertible preferred
securities and $2.03 convertible exchangeable preferred stock. As of December
31, 1999, the aggregate face values of such obligations were $605&nbsp;million and
the associated fixed charges at the rates in effect at December&nbsp;31, 1999 were
$47.3&nbsp;million per year. Such obligations have certain requirements that the
Company must comply with in order for such obligations to remain due and payable as
disclosed in Note 6 to the Consolidated Financial Statements. Violations to
such requirements could accelerate the maturity of such obligations and have a
material adverse effect on the financial viability of the Company.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The significant indebtedness of the Company could have other important
consequences to the Company&#146;s intended business plan and financial viability
such as, but not limited to, the required sale of assets at unfavorable prices
to reduce debt, increase in interest rates which would require more of the
Company&#146;s cash flow and result in less capital spent on developing and
acquiring new oil and gas properties, limit the Company&#146;s ability to raise
capital both in the equity and debt markets, limit or prohibit certain
financing options available to less leveraged companies, and make the Company
more vulnerable during periods of low oil and gas prices.

<P align="left"><I>Risks associated with our IPF program may affect our revenues</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Independent Producer Finance (&#147;IPF&#148;) program involves an up-front cash
payment for the purchase of a term overriding royalty interest through which we
receive an agreed upon share of revenues from identified properties. The
producer&#146;s obligation to deliver these revenues to us is non-recourse to the
producer meaning that IPF can only recover its investment and return through
revenues generated by the identified properties. The producer generally is not
liable to us for any failure to meet its payment obligation unless the producer
fails to operate prudently, there is a title failure or certain other events
within the producer&#146;s control occur. Consequently, our ability to realize
returns and advances on our IPF

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<P>investments is subject to our ability to accurately estimate the volumes of recoverable reserves from which the
applicable production payment is to be discharged and the operator&#146;s ability to
recover these reserves. Because our interest constitutes a property interest,
if a producer is declared bankrupt or insolvent, our interest may be outside of
the reach of the producer&#146;s creditors. However, if a creditor, the producer as
debtor-in-possession or a trustee for the producer in a bankruptcy proceeding
were to argue successfully that the transaction should be characterized as a
loan, we may have only a creditor&#146;s claim for repayment of the amounts
advanced. Our ownership in these production payments is a non-operating
interest. As a result, our ownership of these production payments should not
expose us to liability resulting from the ownership of direct working
interests, such as environmental liabilities and liabilities for personal
injury or death or property damage. Finally, the producer&#146;s obligation to
deliver a specified share of revenues to us is subject to the ability of the
burdened reserves to produce such revenues. As a result, IPF bears the risk
that future revenues we receive will be insufficient to amortize the purchase
price we paid for the interest or to provide any investment return to us.

<P align="left"><I>Our past and future acquisitions may be subject to risks arising from ownership<BR>
of real property</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to continue acquiring oil and gas properties. It generally is
not feasible for us to review in detail every individual property we acquire.
Ordinarily, our review efforts are focused on the higher-valued properties.
However, even a detailed review of all properties and records may not reveal
existing or potential problems nor will it permit us to become sufficiently
familiar with the properties to assess fully their deficiencies and
capabilities. We do not always inspect every well we acquire, and environmental
problems, such as groundwater contamination, are not necessarily observable
even when we do perform an inspection.

<P align="left"><I>Our Chairman has a business interest in another oil and gas company that could<BR>
compete with our business</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Chairman, Thomas J. Edelman, is also the Chairman and Chief Executive
Officer and a significant shareholder of Patina Oil &#38; Gas Corporation (&#147;Patina&#148;), a
publicly traded oil and gas company and is an officer or significant investor
in several other public and private companies engaged in various aspects of the
energy industry. We currently have no business relationships with these
companies, and none of them own any of our securities. However, as a result of
Mr.&nbsp;Edelman&#146;s positions, conflicts of interests may arise. We have board
policies that require Mr.&nbsp;Edelman to give us notification of any potential
conflicts that may arise. However, we cannot assure you that we will not
compete with one or more of these companies for the same acquisition or
encounter other conflicts of interest.

<P align="left"><I>Our success depends on key members of our management</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s success and failure will be highly dependent on a limited
number of senior management personnel, none of which are subject to employment
contracts. Loss of services of one or more of these individuals could have a
material adverse effect on the Company&#146;s operations.

<P align="left"><B>Employees</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of January&nbsp;1, 2000, the Company had 136 full time employees, 58 of whom
were field personnel. None are covered by a collective bargaining agreement
and management believes that its relationship with its employees is good.

<!-- link2 "<B>ITEM 2. PROPERTIES</B>" -->
<DIV align="left"><A NAME="003"></A></DIV>
<P align="left"><B>ITEM 2. PROPERTIES</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;31, 1999, the
Company held working interests in 9,893 gross
(5,025 net) productive oil and gas wells and royalty interests in 587
additional wells. The properties contained, net to the Company&#146;s interest,
estimated proved reserves of 443.8 Bcf of gas and 28.8&nbsp;million barrels of oil
and natural gas liquids or a total of 616.7 Bcfe. Included herein is the
Company&#146;s fifty percent share of the reserves of the Great Lakes joint venture.

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<P align="left"><B>Proved Reserves</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth estimated year-end proved reserves for each
of the past five years.

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="20%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="19"><FONT size="2"><B>December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="19"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2">Natural gas (Mmcf)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Developed</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">174,958</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">207,601</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">369,786</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">436,062</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">299,436</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Undeveloped</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">57,929</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">87,993</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">204,632</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">197,255</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">144,345</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">232,887</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">295,594</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">574,418</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">633,317</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">443,783</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Oil and NGL (Mbbls)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Developed</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,880</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,703</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,971</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,649</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,884</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Undeveloped</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,983</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,972</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,803</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,480</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,933</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,863</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,675</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,774</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,129</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,817</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Total (Mmcfe) (a)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">298,065</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">383,644</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">753,062</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">796,091</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">616,685</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(a)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Oil and NGL are converted to Mcfe at a rate of 6 Mcf per barrel.</TD>
</TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the evaluation of its reserves, the Company engaged the
following independent petroleum consultants: H.J. Gruy and Associates, Inc.
(Southwest and Gulf Coast), DeGoyler and MacNaughton (Gulf Coast), and Wright
and Company, Inc. (Appalachia)<B>. </B>These engineers have been employed primarily
based on geographic expertise as well as their history in engineering certain
of the acquired properties. At December&nbsp;31, 1999, independent petroleum
consultants evaluated approximately 89% of the proved reserves set forth above.
The remainder were evaluated by the Company&#146;s engineering staff. All
estimates of oil and gas reserves are subject to significant uncertainty.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth for each of the past five years, the
estimated future net cash flow from and the Present Value of the proved
reserves in millions.



<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="35%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="19"><FONT size="2"><B>December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="19"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Future net cash flow</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">413</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">941</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,276</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,020</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,013</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Present Value</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Pre-tax</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">229</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">492</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">632</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">555</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">556</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">After tax</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">174</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">351</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">511</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">517</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">503</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>


<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future net cash flow represents future gross cash flow from the production
and sale of proved reserves, net of production costs (including production
taxes, ad valorem taxes and operating expenses) and future development costs.
Such calculations, which are prepared in accordance with the Statement of
Financial Accounting Standards No.&nbsp;69 &#147;Disclosures about Oil and Gas Producing
Activities&#148; are based on cost and price factors at December&nbsp;31, 1999. Average
product prices in effect at December&nbsp;31, 1999 were $23.48 per
barrel of oil, $15.69 per barrel for natural gas liquids, and
$2.34 per Mcf of gas using the benchmark NYMEX price of $25.60 per
barrel and $2.33 per Mmbtu. There can be no assurance that the proved reserves
will be developed within the periods indicated or that prices and costs will
remain constant. There are numerous uncertainties inherent in estimating
reserves and related information and different reservoir engineers often arrive
at different estimates for the same properties. No estimates of reserves have
been filed with or included in reports to another federal authority or agency
since December&nbsp;31, 1999.

<P align="left"><B>Significant Properties</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s reserves at December&nbsp;31, 1999 were concentrated in three
regions, Southwest, Gulf Coast and Appalachia. Properties in the Southwest
region are divided into two divisions, Permian and

<P align="center">16
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P>Midcontinent.&nbsp;The Appalachia properties represent the Company&#146;s 50% ownership in Great Lakes. At
December&nbsp;31, 1999, the Company&#146;s properties included
working interests in 9,893
gross (5,025 net) productive oil and gas wells and royalty interests in 587
additional wells. The Company also held interests in 627,600 gross
(239,626
net) undeveloped acres. The following table sets forth summary information
with respect to the Company&#146;s estimated proved oil and gas reserves at December
31, 1999.

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="12%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Pre-tax</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Present Value</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Oil &#38; NGL</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Natural Gas</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(In thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>%</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(Mbbls)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(Mmcf)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(Mmcfe)</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="4"><FONT size="2">Southwest</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Permian</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">204,853</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">37</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,585</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">87,211</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">204,715</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Midcontinent</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">50,877</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">862</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">52,932</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">58,110</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Subtotal</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">255,730</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">46</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20,447</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">140,143</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">262,825</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Gulf Coast</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">138,918</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,380</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">118,872</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">133,152</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Appalachia</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">160,962</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,990</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">184,768</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">220,708</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">555,610</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">100</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,817</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">443,783</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">616,685</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="4" noshade></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="4" noshade></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="4" noshade></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="4" noshade></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"><HR size="4" noshade></FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><B><I>Southwest Region</I></B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Southwestern properties are situated in the Permian and Val
Verde Basins of west Texas, the Texas panhandle, the East Texas Basin and the
Anadarko Basin of western Oklahoma. Reserves in these basins represent 46% of
total Present Value at December&nbsp;31, 1999. Southwestern proved reserves totaled
263 Bcfe, of which approximately 53% were natural gas. At December&nbsp;31, 1999,
the Southwest Region properties had a development inventory of 504
recompletions and drilling locations.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Permian.&nbsp;</I>The Permian division properties, located in the Permian and Val
Verde Basins of west Texas, contained 205 Bcfe of proved reserves. These
reserves, representing 37% of total Present Value, were 57% oil and natural gas
liquids. In the fourth quarter of 1999, the Permian properties produced an
average of 4,434 barrels of oil and NGL and 23.8 Mmcf of gas per day.
Producing wells total 1,394 (655 net), of which the Company operates 88% on a
total reserve basis. Major producing areas include the Sonora, Sterling, the
Big Lake and Fuhrman-Mascho area, and Powell Ranch. The Oakridge and Frances
Hill fields in the Sonora area produce from multiple deltaic channel Canyon
sandstones at depths of 2,600 to 6,000 feet. At Sterling, gas production is
derived from Canyon/Cisco sub-marine sand deposits at 4,000 to 8,000 foot
depths, while oil production comes from Silurian Fusselman carbonates.
Sterling area gas production is liquids-rich and is transported to the
Company&#146;s 25,000 Mcf/d gas plant, which processes gas from the Company&#146;s
operated properties, as well as gas produced by third parties. The Company is
currently in negotiations to sell the Sterling Gas processing plant. It is
anticipated that a sale will be closed in the second quarter of 2000. The Big
Lake and Fuhrman-Mascho area produces primarily oil from the San
Andres/Grayburg formations at depths ranging from 2,500 feet to 4,600 feet.
The Powell Ranch area produces primarily oil from the Wolfcamp formation at a
depth of 8,000 to 9,000 feet. At December&nbsp;31, 1999, the Permian properties
contained a development inventory of 227 recompletions and 207 infill drilling
locations.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Midcontinent.&nbsp;</I>The Midcontinent business division properties, located in
the Anadarko Basin of western Oklahoma and the Texas panhandle, held proved
reserves of 58 Bcfe at December&nbsp;31, 1999. These reserves, representing 9% of
the total Present Value, were 91% natural gas. Of 301 gross (190 net) wells,
the Company operates 89%. The division&#146;s largest property is the Okeene Field,
which includes 180 operated wells. In the fourth of quarter 1999 the
Midcontinent properties produced an average of 156 barrels of oil and 16.1 Mmcf
of gas per day. The properties produce from a variety of sands and carbonates
in both structural and stratigraphic traps on the Hunton, Red Fork,
Mississippi, Spring, and Morrow formations at 6,000 to 12,000 foot depths. The
Midcontinent development inventory includes 36 recompletions and 34 drilling
locations.

<P align="center">17
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<P align="left"><B><I>Gulf Coast Region</I></B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Gulf Coast properties include onshore reserves in south
Texas, Louisiana and Mississippi, as well as, offshore reserves in the shallow
waters of the Gulf of Mexico. The Gulf Coast business unit properties
contained 133 Bcfe of proved reserves at December&nbsp;31, 1999, or 25% of the total
Present Value. The reserves were 89% natural gas. In the fourth quarter of
1999, daily production from the Gulf Coast properties averaged 1,294 barrels of
oil and 43.0 Mmcf of gas per day. Major fields onshore include Alta Mesa and Oakvale.
These fields produce from the Frio, Vicksburg, and Hosston formations at depths
ranging from 1,000 to 16,000 feet. In total, the onshore properties include 87
wells (52 net), of which 89% are Company operated. The properties in the Gulf
of Mexico include offshore interests in 51 platforms in water depths ranging
from 20 to 400 feet. The Company does not operate any offshore wells. The
entire Gulf Coast region is characterized by relatively complex geology,
multiple producing horizons and substantial exploitation and exploration
potential. At December&nbsp;31, 1999, the Gulf Coast properties had a development
inventory of 66 recompletions and 31 drilling locations.

<P align="left"><B><I>Appalachian Region</I></B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 1999, the Company&#146;s 50% ownership in Great Lakes
represented a net 221 Bcfe of proved reserves, or 29% of the Company&#146;s total
Present Value. The reserves are attributable to 7,999 gross wells
(6,610 net
wells) located in Pennsylvania, Ohio, West Virginia, New York, and Michigan.
Great Lakes operates 93% of these wells. The reserves, which on an Mcfe basis,
are 84% natural gas, produce principally from the Upper-Devonian, Medina,
Clinton, Knox and Oriskany formations at depths ranging from 2,500 to 7,000
feet. In the fourth quarter of 1999, the Company&#146;s share of daily production
averaged 29.1 Mmcf of gas and 697 barrels of oil. After initial flush
production, these properties are characterized by gradual decline rates. Gas
production is transported through over 4,700 miles of Company owned gas
gathering systems and is sold primarily to FirstEnergy and, to lesser the
extent, other third parties. Under the arrangement with FirstEnergy, Great
Lakes&#146; sells gas to FirstEnergy on a negotiated basis. Great Lakes may sell
gas to third parties, however such arrangements are contracted through FirstEnergy, and FirstEnergy may elect to match any such arrangements. At December
31, 1999, Great Lakes had a development inventory of 47 recompletions and 1,478
drilling locations.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The management of the joint venture is directed by a committee of three
representatives each from the Company and FirstEnergy. Any disagreements among the
committee are resolved through arbitration.

<P align="center">18
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<P align="left"><B>Production</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth production information for the preceding
five years (in thousands, except average sales price and operating cost data).

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="36%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="19"><FONT size="2"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="19"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Production</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Crude oil (Mbbl)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">913</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,018</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,371</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,175</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,247</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Natural gas liquids (Mbbl)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">50</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">423</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">480</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">412</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Gas (Mmcf)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,471</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,231</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">38,409</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45,193</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">50,808</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total (Mmcfe) (a)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,949</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,641</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">49,170</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">61,120</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">66,763</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Revenues</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Crude oil</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">15,133</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">19,912</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">24,967</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">26,119</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">33,075</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Natural gas liquids</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">513</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,833</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,965</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,302</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Gas</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">22,284</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">47,629</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">101,217</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">105,509</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">108,115</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">37,417</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">68,054</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">130,017</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">135,593</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">145,492</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Direct operating expenses
(b)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,302</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20,676</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">31,481</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">39,001</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">43,074</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Gross Margin</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">26,115</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">47,378</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">98,536</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">96,592</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">102,418</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Average Sales Price</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Crude oil (Bbl)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">16.57</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">19.56</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">18.22</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">12.01</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">14.72</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Natural gas liquids (Bbl)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">10.22</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">9.06</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">8.26</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">10.43</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Gas (Mcf)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1.79</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.24</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.64</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.33</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.13</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Mcfe (a)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.08</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.46</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.64</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.22</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2.18</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Average Operating Cost</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Per Mcfe (a)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">0.63</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">0.75</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">0.64</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">0.64</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">0.65</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>


<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(a)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Oil and NGL are converted to Mcfe at a rate of 6 Mcf per barrel.</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
<TD width="1%" align="left">(b)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Includes severance and production taxes.</TD>
</TR>
</TABLE>
<P align="left"><B>Producing Wells</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information relating to productive wells at
December&nbsp;31, 1999. The Company owns royalty interests in an additional 587
wells. Wells are classified as oil or gas according to their predominant
production stream.



<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="38%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Net</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Working</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Wells</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Wells</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Interest</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Crude oil</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,049</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,518</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">74</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Natural gas</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,844</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,507</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">45</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,893</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,025</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">51</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>


<P align="left"><B>Acreage</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth developed and undeveloped acreage held at
December&nbsp;31, 1999.



<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="32%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="12%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="12%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="9%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Working</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Net</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Interest</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>

</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Developed</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,185,126</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">631,789</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">53</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Undeveloped</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">627,607</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">239,626</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">38</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,812,733</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">871,415</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">48</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>


<P align="center">19
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><B>Drilling Results</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes drilling activities for the three years
ended December&nbsp;31, 1999.

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="28%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="23"><FONT size="2"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="23"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Net</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Net</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Net</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2">Development wells:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Productive</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">186.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">164.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">222.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">182.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">43.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20.6</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Dry</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.7</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Exploratory wells:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Productive</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.5</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Dry</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.8</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Total Wells:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Productive</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">198.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">166.9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">231.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">185.9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">44.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21.1</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Dry</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11.7</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.5</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">213.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">174.3</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">248.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">197.6</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">50.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23.6</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><B>Real Property</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company owns a 24,000 square foot facility located on seven acres in
Ohio, which it leases to Great Lakes under a standard office lease arrangement, the term of which ends on September&nbsp;30, 2000. Great Lakes has an option to
purchase the facility during the lease term for $1.2&nbsp;million. At the end of
the lease term, the Company currently plans to sell the facility to either
Great Lakes or a third party purchaser. The Company leases approximately
56,000 square feet in Texas and Oklahoma under standard office lease
arrangements that expire at various times through March&nbsp;2004. All facilities
are adequate to meet the Company&#146;s current needs and existing space could be
expanded or additional space could be leased.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company owns various vehicles and other equipment that is used in its
field operations. Such equipment is believed to be in good repair and, while
such equipment is important to its operations, it can be readily replaced as
necessary.

<!-- link2 "<B>ITEM 3. LEGAL PROCEEDINGS</B>" -->
<DIV align="left"><A NAME="004"></A></DIV>
<P align="left"><B>ITEM 3. LEGAL PROCEEDINGS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is involved in various legal actions and claims arising in the
ordinary course of business. In the opinion of management, such litigation and
claims will be resolved without a material adverse effect on the Company&#146;s
financial position.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May&nbsp;1998, a Domain stockholder filed an action in the Delaware Court of
Chancery, alleging that the terms of the merger with Range were unfair to a
purported class of Domain stockholders and that the defendants (except Range)
violated their legal duties to the class in connection with the merger. Range
is alleged to have aided and abetted the breaches of fiduciary duty allegedly
committed by the other defendants. The action sought an injunction enjoining
the merger as well as a claim for money damages. In 1998, the parties executed
a Memorandum of Understanding (the &#147;MOU&#148;), which represents a settlement in
principle of the litigation. Under the terms of the MOU, appraisal rights
(subject to certain conditions) were offered to all holders of Domain common
stock (excluding the defendants and their affiliates). Domain also agreed to
pay any court-awarded attorneys&#146; fees and expenses of the plaintiffs&#146; counsel
in an amount not to exceed $0.3&nbsp;million. The settlement in principle is
subject to court approval and certain other conditions.

<!-- link2 "<B>ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</B>" -->
<DIV align="left"><A NAME="005"></A></DIV>
<P align="left"><B>ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</B>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>
<TR valign="top">
<TD>&nbsp;</TD>
<TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</TD>
</TR>
</TABLE>
<P align="center">20
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>




<!-- link1 "<B>PART II</B>" -->
<DIV align="left"><A NAME="006"></A></DIV>
<P align="center"><B>PART II</B>

<!-- link2 "<B>ITEM 5. MARKET FOR THE COMMON STOCK AND RELATED MATTERS</B>" -->
<DIV align="left"><A NAME="007"></A></DIV>
<P align="left"><B>ITEM 5. MARKET FOR THE COMMON STOCK AND RELATED MATTERS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s common stock is listed on New York Stock Exchange (&#147;NYSE&#148;)
under the symbol &#147;RRC&#148;. Prior to August&nbsp;25, 1998, the stock was listed under
the symbol &#147;LOM&#148;. During 1999, trading volume averaged 199,400 shares per day.
On March&nbsp;13, 2000, the closing price of the Common Stock was $2.00. The
following table sets forth the high and low sales prices as reported on the
NYSE Composite transaction tape on a quarterly basis for the periods indicated.

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="37%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="10%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="10%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Common</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>High</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Low</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Dividends</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD></TD>
<TD><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">First Quarter</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD nowrap align="left"><FONT size="2">17 1/2</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD nowrap align="left"><FONT size="2">13 1/4</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">.03</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Second Quarter</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="left"><FONT size="2">16 11/16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="left"><FONT size="2">9 3/4</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">.03</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Third Quarter</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="left"><FONT size="2">10 7/16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="left"><FONT size="2">6 1/16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.03</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Fourth Quarter</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="left"><FONT size="2">6 13/16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="left"><FONT size="2">2 15/16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.03</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">First Quarter</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD nowrap align="left"><FONT size="2">3 3/4</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD nowrap align="left"><FONT size="2">1 7/8</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">.01</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Second Quarter</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="left"><FONT size="2">7</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="left"><FONT size="2">2 9/16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">.01</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Third Quarter</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="left"><FONT size="2">6 1/2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="left"><FONT size="2">4 1/8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.01</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Fourth Quarter</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="left"><FONT size="2">4 5/8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="left"><FONT size="2">2 9/16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.00</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>The Company&#146;s $2.03 convertible exchangeable preferred stock 5.75% trust
convertible preferred securities, and 6% convertible debentures and
8.75% senior subordinated notes are not listed
on any exchange, but trade over the counter.

<P align="left"><B>Holders of Record</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At March&nbsp;13, 2000 the
number of holders of record of the common stock and
$2.03 convertible exchangeable preferred stock were approximately 2,543 and 1,
respectively.

<P align="left"><B>Dividends</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends on the common stock were initiated in late 1995, were paid in
each quarter through 1998, reduced and paid through the third quarter of 1999.
In the fourth quarter of 1999, common dividends were suspended as the Company
focused on reducing debt. The Convertible Preferred Stock is entitled to
receive cumulative quarterly dividends at the annual rate of $2.03 per share.
If there is any arrearage in dividends on preferred stock, the Company may not
pay dividends on the common stock. The Company has never been in arrears in
the payment of preferred dividends.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The payment of dividends is subject to declaration by the Board of
Directors and depends on earnings, capital expenditures and market factors
existing from time to time. The bank credit facility and the indenture for the
8.75% Senior Subordinated Notes contain restrictions on the Company&#146;s ability
to pay dividends on capital stock. Under the most restrictive of these
provisions, the Company could pay $7.3&nbsp;million of additional dividends as of
December&nbsp;31, 1999.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under terms of the 8.75% Senior Subordinated Notes, the Company may pay
restrictive payments, which includes dividends. The restrictive payments may
equal the higher of $20&nbsp;million or a formula that include earnings and losses
since the issuance of the senior subordinated notes. Given the Company&#146;s
losses since 1997, the Company can not pay dividends under the formula and,
therefore, must rely on the initial $20&nbsp;million basket amount. At December&nbsp;31,
1999, $12.7&nbsp;million of the $20&nbsp;million basket had been used thus leaving $7.3
million available under the basket for payment of dividends.

<P align="center">21
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<!-- link2 "<B>ITEM 6. SELECTED FINANCIAL DATA</B>" -->
<DIV align="left"><A NAME="008"></A></DIV>
<P align="left"><B>ITEM 6. SELECTED FINANCIAL DATA</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents selected financial information covering the
preceding five years.



<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="center">
<TR valign="bottom">
<TD width="49%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="19"><FONT size="2"><B>As of or for the Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="19"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="center" colspan="19"><FONT size="2"><B>(In thousands, except per share data)</B></FONT></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2"><B>Operations</B></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Revenues</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">41,169</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">75,341</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">145,417</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">148,929</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">201,364</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Net income (loss)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,390</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,615</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(23,332</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(175,150</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,793</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share before extraordinary
items &#151; basic</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.31</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.71</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.34</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share before extraordinary
items &#151; dilutive</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.31</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.69</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.34</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share &#150; basic</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.31</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.71</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.27</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share &#150; dilutive</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.31</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.69</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.27</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Dividends per common share</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.01</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.06</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.10</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.12</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.03</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2"><B>Balance Sheet</B></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Working capital</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">4,563</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">12,896</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(2,051</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(9,484</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">19,291</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Oil and gas properties, net</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,702</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">229,417</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">623,807</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">662,099</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">595,297</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Total assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">214,788</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">282,547</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">758,833</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">921,612</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">752,368</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Senior debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">83,035</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">61,780</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">186,712</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">367,062</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">140,000</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Non-recourse debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,100</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">142,520</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Subordinated debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">180,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">180,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,360</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Trust convertible preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">117,669</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Stockholders&#146; equity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">99,367</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">117,529</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">196,950</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">133,222</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">127,171</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>



<P>The following table sets forth summary unaudited financial information on a
quarterly basis for the past two years (in thousands, except per share data).
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="center">
<TR valign="bottom">
<TD width="56%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="15"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="15"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Mar. 31</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>June 30</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Sept. 30</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Dec. 31</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Revenues</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">36,010</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">32,273</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">35,431</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">45,215</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Net income (loss) (a)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,769</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(944</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(66,907</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(110,068</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share &#150;
basic (a)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.10</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(.07</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2.57</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3.13</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share &#150; dilutive (a)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">.10</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(.07</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2.57</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3.13</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Total assets (a)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">800,252</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">822,984</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,036,111</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">921,612</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Senior debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">234,905</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">252,200</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">368,176</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">367,062</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Non-recourse debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">53,795</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,100</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Subordinated notes</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">180,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">180,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">180,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">180,000</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Trust convertible preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,000</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Stockholders&#146; equity(a)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">199,058</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">195,747</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">234,575</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">133,222</FONT></TD>
<TD></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="15"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="15"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Mar. 31</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>June 30</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Sept. 30</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Dec. 31</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Revenues (c)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">37,953</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">42,196</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">81,095</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">40,121</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Net income (loss) (b)(c)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8,981</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,087</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,722</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(9,446</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share &#150;
basic (b)(c)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.26</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.07</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.33</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.27</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share &#150; dilutive (b)(c)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.26</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.07</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.33</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.27</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Total assets (b)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">905,522</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">895,677</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">775,785</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">752,368</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Senior debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">317,451</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">317,085</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">146,650</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">140,000</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Non-recourse debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,100</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">54,200</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">146,755</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">142,520</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Subordinated debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">180,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,360</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,360</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,360</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Trust convertible preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">117,669</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">117,669</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">117,669</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Stockholders&#146; equity(b)(c)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">124,886</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">125,970</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">137,090</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">127,171</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P>


<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(a)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Includes a $97.9&nbsp;million provision for impairment ($63.6&nbsp;million after
tax) recorded in the third quarter and a $109.2&nbsp;million provision for
impairment ($92.6&nbsp;million after tax) recorded in the fourth quarter.</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>


<TR>

<TR valign="top">
<TD width="1%" align="left">(b)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Includes a $20.9&nbsp;million provision for impairment that was recorded in
the third quarter and $6.1&nbsp;million in the fourth quarter.</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
<TD width="1%" align="left">(c)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Includes a proportional gain associated with the Great Lakes Energy
Partners, see Note 17 to the financial statements.</TD>
</TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The total of the earnings per share for each quarter does not equal the
earnings per share for the full year, either because the calculations are based
on the weighted average shares outstanding during each of the individual
periods, or due to rounding.

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<!-- link2 "<B>ITEM 7. MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B>" -->
<DIV align="left"><A NAME="009"></A></DIV>
<P align="left"><B>ITEM 7. MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B>

<P align="left"><B>Factors Effecting Financial Condition and Liquidity</B>
<P align="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liquidity and Capital Resources</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion compares the Company&#146;s financial condition at
December&nbsp;31, 1999 to its financial condition at December&nbsp;31, 1998. During
1999, the Company spent approximately $38.3&nbsp;million on acquisition, development
and exploration activities. At December&nbsp;31, 1999, the Company had $12.9
million in cash and total assets of $752.4&nbsp;million. During 1999, debt
decreased from $607.2&nbsp;million to $458.9&nbsp;million. At December&nbsp;31, 1999, debt to
total book capitalization was 65%.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt at December&nbsp;31, 1999 included $140&nbsp;million of borrowings
under the Credit Facility, $95.0&nbsp;million under the non-recourse Great Lakes
Facility, $47.5&nbsp;million under the non-recourse IPF Facility, $125.0&nbsp;million of
8.75% Senior Subordinated Notes and $51.4&nbsp;million of 6% Convertible
Subordinated Debentures. The Company&#146;s balance on its Credit Facility was
reduced 62% from $365.2&nbsp;million at December&nbsp;31, 1998 to $140.0&nbsp;million at
December&nbsp;31, 1999. Including the debt exchanges noted below, total debt fell
from $607.2&nbsp;million at December&nbsp;31, 1998 to $458.9&nbsp;million at December&nbsp;31,
1999.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September&nbsp;1999, Range and FirstEnergy each contributed all of their
Appalachia oil and gas properties and associated gas gathering and
transportation systems to form Great Lakes. In addition, Range contributed
$188.3&nbsp;million of indebtedness and FirstEnergy contributed $2.0&nbsp;million in
cash. Great Lakes expects to increase production by active development of
existing fields and exploitation of deeper formations. Great Lakes also
intends to pursue acquisition opportunities in Appalachia. Range and
FirstEnergy each retained a 50% ownership interest in Great Lakes. The Company
pro rata consolidates 50% of the assets and liabilities of Great Lakes.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 1999, Range exchanged $2.3&nbsp;million of Convertible Preferred
Securities and $3.6&nbsp;million of Debentures for approximately 699,000 shares of
Common Stock. In connection with the exchanges, a $2.4&nbsp;million extraordinary
gain was recorded as the securities were retired at a discount to their face
value. See Capital Restructuring Program below.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September&nbsp;1999, the Company elected to pursue the sale of its gas
processing plant and associated assets located in the Permian Basin. In
connection with the plan of disposal, the Company determined that the carrying
value of the plant exceeded its fair value. Accordingly, an impairment loss of
$21.0&nbsp;million was recorded which represented the excess of the carrying value
over the estimated fair value. Fair value of the gas processing plant was
estimated by reference to the present value of the estimated future cash
inflows of the gas processing plant. The impairment estimate on the gas
processing plant recorded in the third quarter 1999 was based on estimates of
future cash flows for the property. Future cash flows include revenues from
residue gas, plant liquids and by-products derived from both equity and third
party proved natural gas reserves, which are estimated to pass through the
plant, direct operating costs and capitalized costs. The Company estimated
future gas prices by referencing ten year futures strip prices in the
calculation of the plant revenues estimated over the anticipated life of the
property. These prices are adjusted for the effect of the estimated throughput
production, subject to existing sales contracts, and are not necessarily
indicative of actual prices received by the Company at the date of the
impairment charge. Based upon discussions with potential acquirers of the gas
processing plant, the Company believes that the carrying value of the plant
does not exceed its fair market value. The Company&#146;s Credit
Facility provides that the borrowing base will be reduced by 67% of
the net proceeds of the sale of the Sterling gas plant.



<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company currently estimates that its capital resources are adequate to
meet the requirements of its business. However, future cash flows are subject
to a number of variables including the level of production and oil and gas
prices and other world economic conditions that have historically affected the
oil and gas production and exploration business. There can be no assurance
that operations and other capital resources

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<P>will provide cash in sufficient amounts to maintain planned levels of capital expenditures. See Capital
Restructuring Program below.

<P align="left"><I>Cash Flow</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s principal operating sources of cash include sales of oil and
gas, revenues from transportation and processing and IPF revenues. The
Company&#146;s cash flow is highly dependent upon oil and gas prices. Decreases in
the price of oil and gas and lower production attributable to certain
properties during 1999 reduced cash flow and resulted in the reduction of the
borrowing base under the Credit Facility. As a result, the Company reduced its
development and exploration spending to $37.4&nbsp;million in 1999. The 1999
expenditures were entirely funded by internally generated cash flow.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s net cash provided by operations for the years ended December
31, 1997, 1998 and 1999 was $77.1&nbsp;million, $45.0&nbsp;million
and $52.6&nbsp;million,
respectively. The decrease in the Company&#146;s cash flow from operations is
attributed primarily to lower energy prices, and increased interest expense for
amounts outstanding under the Credit Facility.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s net cash used in (provided by) investing for the years ended
December&nbsp;31, 1997, 1998 and 1999 was $501.1&nbsp;million,
$172.3&nbsp;million and $(95.8)
million, respectively. Investing activities for these periods are comprised
primarily of additions to oil and gas properties through the Company&#146;s
investment in Great Lakes, acquisitions and development, proceeds of sale of
assets, IPF investments and, to a lesser extent, exploration and additions of
field service assets. The Company&#146;s activities have been financed through a
combination of operating cash flow, bank borrowings and capital raised through
equity and debt offerings.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s net cash provided by (used in) financing for the years ended
December&nbsp;31, 1997, 1998 and 1999 was $425.2&nbsp;million, $128.5&nbsp;million and
$(146.4) million, respectively. Sources of financing used by the Company have
been primarily borrowings under its Credit Facility and capital raised through
equity and debt offerings. During 1999, the Company decreased its parent
company recourse debt by $231&nbsp;million and total debt by $148.3&nbsp;million. The
reduction in debt was accomplished by the formation of Great Lakes, property
sales and applying excess cash flow to debt repayment.

<P align="left"><I>Capital Requirements</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 1999, $37.4&nbsp;million of capital was expended on development and
exploration activities. In an effort to reduce debt the Company significantly
reduced its 1999 exploration and development capital budget from the $81.5
million expended in 1998. The budgeted 2000 development and exploration
expenditures of $45&nbsp;million are currently expected to be funded entirely by
internally generated cash flow. The development and exploration activities are
highly discretionary and are expected to be maintained at levels below
internally generated cash flow. The remaining cash flow will be available for
debt repayment. See &#147;Business&#151;Development and Exploration Activities.&#148;

<P align="left"><I>Bank Facilities</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company maintains a $225&nbsp;million revolving bank facility (the &#147;Credit
Facility&#148;). The Credit Facility provides for a borrowing base, which is
subject to semi-annual redeterminations. The Credit Facility is secured by the
Company&#146;s oil and gas properties. At March&nbsp;13, 2000, the borrowing base on the
Credit Facility was $160&nbsp;million of which $16&nbsp;million was available. The
borrowing base is subject to semi-annual determination and certain other
redeterminations based upon a variety of factors, including the discounted
present value of estimated future net cash flow from oil and gas production.
At the Company&#146;s option, loans may be prepaid and the revolving credit
commitment may be reduced, in whole or in part at anytime in certain minimum
amounts. The next redetermination occurs on April&nbsp;1, 2000. If amounts
outstanding at April&nbsp;1, 2000 exceed the redetermined borrowing base, one-half
of the excess, if any, must be repaid within 90&nbsp;days and the remaining excess,
if any, must be repaid within 180&nbsp;days. Any borrowing base in excess of $135
million requires the approval of all lenders. There can be no assurance that a
redetermined borrowing base will be in excess of $135&nbsp;million. Therefore, the
Company has classified as

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<P>current the difference between the amount outstanding on December&nbsp;31, 1999, and $135&nbsp;million.
A similar appropriate amount will be included in current portion of long term debt at March&nbsp;31, 2000, unless an
amended or replacement credit facility is entered into. Interest is payable
quarterly or as LIBOR notes mature and the loan matures in February&nbsp;2003. A
commitment fee is paid quarterly on the undrawn balance at a rate of 0.25% to
0.50% depending upon the percentage of the borrowing base drawn. The interest
rate on the Credit Facility is LIBOR plus between 1.50% and 2.25%, depending
upon amounts outstanding. The weighted average interest rates on these
borrowings were 6.7% and 7.1% for the years ended December&nbsp;31, 1998 and 1999,
respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company pro rata consolidates 50% of amounts outstanding under the
$275&nbsp;million revolving bank facility (the &#147;Great Lakes Facility&#148;) through its
ownership in Great Lakes. The Great Lakes Facility is non-recourse to Range.
The Great Lakes Facility provides for a borrowing base, which is subject to
semi-annual redeterminations. The Great Lakes Facility is secured by Great
Lake&#146;s oil and gas properties. At March&nbsp;13, 2000, the borrowing base on the
Great Lakes Facility was $191&nbsp;million of which $9&nbsp;million was available. On
April&nbsp;1, 2000, the borrowing base reduces to $190&nbsp;million. The borrowing base
is subject to a semi-annual borrowing review on April&nbsp;1, 2000. Borrowing base
redeterminations require the approval of all lenders. Interest is payable
quarterly or as LIBOR notes mature and the loan matures in September&nbsp;2002. The
interest rate on the Great Lakes Facility is LIBOR plus between 1.50% and
2.00%, depending upon amounts outstanding. A commitment fee is paid quarterly
on the undrawn balance at a rate of 0.25% to 0.50% depending upon the
percentage of the borrowing base drawn. The weighted interest rate on this
borrowing was 7.68% for the quarter ended December&nbsp;31, 1999.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IPF has a $100&nbsp;million revolving credit facility (the &#147;IPF Facility&#148;)
through which it finances its activities. The IPF Facility is non-recourse to
Range and matures in December&nbsp;2002. The IPF Facility is secured by
substantially all of IPF&#146;s assets. The borrowing base under the IPF Facility
is subject to a semi-annual redetermination on April&nbsp;1, 2000. On March&nbsp;13,
2000, the borrowing base on the IPF Facility was $56&nbsp;million of which $13.6
million was available. The IPF Facility bears interest at prime rate or
interest at LIBOR plus between 1.75% and 2.25%, depending on amounts
outstanding. Interest expense on the IPF Facility is included in IPF expenses
on the Consolidated Statements of Operations and amounted to $1.5&nbsp;million and $
4.3&nbsp;million for the years ended December&nbsp;31, 1998 and 1999, respectively. A
commitment fee is paid quarterly on the average undrawn balance at a rate of
0.375% to 0.50%. The weighted average interest rate on these borrowings was
7.79% and 6.99% for the years ended December&nbsp;31, 1998 and 1999, respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company plans to reduce outstanding amounts under the Credit Facility
through operating cash flow and the sale of assets. The Company classified
$19.7&nbsp;million of assets as held for sale at December&nbsp;1999. These assets
represent a gas processing plant and associated assets located in the Permian
Basin, which are expected to be sold in the second quarter of 2000. The
Company will use all of the proceeds from the sale of this plant, if
consummated, to reduce amounts outstanding under the Credit Facility. Under
terms of the Credit Facility, the borrowing base will be reduced by 67% of the
proceeds from a sale. The Company is also considering the sale of other
non-strategic assets whose proceeds would be used to reduce the Credit
Facility. The Company&#146;s goal is to sharply reduce debt as a percentage of
total capitalization with the next twelve months. Additional asset sales may
be necessary to reduce outstanding amounts under the Credit Facility to meet
future borrowing base requirements, however, at this time, the Company has no
agreements to sell any material assets other than those noted above.

<P align="left"><I>Hedging Activities</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Periodically, the Company enters into futures, option and swap contracts
to reduce the effects of fluctuations in crude oil and natural gas prices. All
futures, option and swap contracts entered into by the Company are solely to
hedge the price volatility of oil and natural gas and not to speculate in the
commodity markets. It is the Company&#146;s policy to have no more than 80% of its
production hedged in a twelve month period. At December&nbsp;31, 1999, the Company
had open hedges for natural gas of 24.8 Bcf and 0.8&nbsp;million barrels of oil.
The gas contracts are at average prices ranging from $2.00 to $3.17 per Mmbtu
and the oil contracts range from $19.01 to $25.00 per Bbl. While these
transactions have no carrying value, the


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<P>Company&#146;s mark-to-market exposure under these contracts at December&nbsp;31, 1999 was a net gain of approximately $0.3
million. These contracts expire monthly through December&nbsp;2000. The gains or
losses on the Company&#146;s hedging transactions are determined as the difference
between the contract price and a reference price, generally closing prices on
the NYMEX. The resulting transaction gains and losses are determined monthly
and are included in oil and gas revenues in the period the hedged production is sold. Net gains or (losses)&nbsp;relating to these derivatives for the
years ended December&nbsp;31, 1997, 1998 and 1999 approximated $(.9) million, $3.1
million and $(10.6) million, respectively.

<P align="left"><I>Interest Rate Risk</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 1999, Range had debt outstanding of $458.9&nbsp;million. Of this
amount, $176.4&nbsp;million, or 38% bears interest at fixed rates averaging 7.9%.
The remaining $282.5&nbsp;million of debt outstanding at the end of 1999 bears
interest at floating rates which averaged 8.5% at the end of 1999. At December
31, 1999, the Company had $80&nbsp;million of borrowings subject to four interest
rate swap agreements at rates of 5.35%, 4.82%, 5.64% and 5.59% through January
2000, September&nbsp;2000, October&nbsp;2000 and October&nbsp;2000, respectively. The
interest rate swaps may be extended at the counterparties&#146; option for two
years. The interest rate swap with a rate of 5.35% was not extended. The
agreements require that the Company pay the counterparty interest at the above
fixed swap rates and require the counterparty to pay the Company interest at
the 30-day LIBOR rate. The closing 30-day LIBOR rate on December&nbsp;31, 1999 was
6.49%. A 10% increase in short-term interest rates on the floating-rate debt
outstanding at the end of 1999 would equal to approximately 85 basis points.
Such an increase in interest rates would increase Range&#146;s 2000 interest expense
by approximately $2.4&nbsp;million, assuming borrowed amounts remain constant
throughout 2000. The above sensitivity analysis for interest rate risk
excludes accounts receivable, accounts payable and accrued liabilities because
of the short-term maturity of such instruments.

<P align="left"><I>Capital Restructuring Program</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of two significant acquisitions completed in 1997 and 1998
financed principally with debt and fixed rate convertible securities and due to
the poor performance of the acquired properties as well as the significant drop
in oil and gas prices between late 1997 and 1999, the Company undertook a
number of initiatives. These include a reduction in workforce, a significant
decrease in capital expenditures, the sale of assets, the formation of the
Great Lakes joint venture and the exchange of Common Stock for fixed rate
securities. These initiatives resulted in the Company reducing its parent
company bank debt in 1999 by over 60% to $140&nbsp;million at year end. Total debt
was reduced 24% during 1999 to $459&nbsp;million. While management believes these
actions have stabilized the Company&#146;s financial position, debt to total
capitalization at December&nbsp;31, 1999 remained high at 65%. For the Company to
return to its historical posture of consistent profitability and growth,
management believes it is necessary for the Company to further reduce debt and
associated fixed financing costs. In addition to further asset sales, the
Company currently anticipates it will significantly increase its efforts to
exchange Common Stock or other equity linked securities for its existing fixed
income securities or reduce debt and associated financing costs through some
other substantial restructuring initiative. While the Company expects to
exchange the fixed income securities at a substantial discount to their face
value, the Company&#146;s existing common stockholders will be materially diluted
if a material portion of the fixed rate securities are exchanged. The dilutive
effect to the common stockholders will depend upon a number of factors, the
primary ones being the number of shares and the price at which additional
Common Stock is issued or the price which newly issued securities are
convertible into Common Stock. While a restructuring would reduce the existing
stockholders&#146; proportional ownership of the Company, management believes that a
restructuring would substantially increase its ability to enhance the value of
the Company as well as the market value of the Common Stock. Any substantial
restructuring will require mutually satisfactory agreements with a large
majority of the parties holding the Company&#146;s existing convertible securities.
Additionally, to insure that a sufficient number of shares of Common Stock are
available, it is likely that the Company&#146;s stockholders would need to approve
increasing the number of authorized shares of Common Stock. While the Company
currently projects that it has sufficient liquidity and cash flow to meet its
obligations, a drop in oil and gas prices or further reduction in production
and reserves will reduce


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<P>the Company&#146;s ability to fund capital expenditures and meets its obligations.
This could have a detrimental effect on the Company&#146;s ability to complete its
capital restructuring program in a timely manner.

<P align="left"><B>Inflation and Changes in Prices</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s revenues and the value of its oil and gas properties have
been and will be affected by changes in oil and gas prices. The Company&#146;s
ability to maintain current borrowing capacity and to obtain additional capital
on attractive terms is also dependent on oil and gas prices. Oil and gas prices
are subject to significant seasonal and other fluctuations that are beyond the
Company&#146;s ability to control or predict. During 1999, the Company received an
average of $14.72 per barrel of oil and $2.13 per Mcf of gas. Although certain
of the Company&#146;s costs and expenses are affected by the level of inflation,
inflation did not have a significant effect in 1999. Should conditions in the
industry improve, inflationary cost pressures may resume.

<P align="left"><B>Results of Operations</B>

<P align="left"><I>Comparison of 1999 to 1998</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company reported a net loss for the year ended December&nbsp;31, 1999 of
$7.8&nbsp;million, as compared to a net loss of $175.2&nbsp;million for 1998. Net income
in 1999 includes a $2.4&nbsp;million extraordinary gain on Convertible Preferred
Securities and Debentures retired at a discount to their face value.
Additionally, the Company recognized a $39.8&nbsp;million proportional gain on the
Great Lakes transaction (See Note 17- Gain on Sale).

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Oil and gas revenues increased 7% to $145.5&nbsp;million. During the year, oil
and gas production volumes increased 9% to 66.8 Bcfe, an average of 182,900
Mcfe per day. The increased revenues recognized from production volumes were
impacted by a 2% decrease in the average price received per Mcfe to $2.18. The
average oil price increased 23% to $14.72 per barrel and average gas prices
decreased 9% to $2.13 per Mcf. During 1999, the Company recorded gas revenues
related to an above market gas contract with a utility company representing 2.8
Bcf of gas production at an average price of $3.81 per Mcf (approximately $10.6
million of gas revenue). Had this gas been sold on the same terms as other
production was sold in the same geographical region (approximately $2.32 per
Mcf), it would have resulted in a reduction in gas revenues of approximately
$3.9&nbsp;million. This gas contract expires June&nbsp;30, 2000. If gas contracts
cannot be found to replace the pricing received from this above-market
contract, the Company will sell such gas at current market prices. Depending
upon the market for natural gas at that time, this could have an adverse effect
on the Company&#146;s future revenues and liquidity. As a result of the Company&#146;s
larger base of producing properties and production, oil and gas production
expenses increased 10% to $43.1&nbsp;million in 1999 versus $39.0&nbsp;million in 1998.
The average operating cost per Mcfe produced was $0.64 during 1998 and $0.65
during 1999.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transportation, processing and marketing revenues increased by $1.0
million to $7.8&nbsp;million due to higher production levels. IPF income of $7.8
million consists of the interest portion of the term overriding royalty
interest and is net of a $3.3&nbsp;million allowance for possible uncollectible
accounts. During 1999, IPF income expenses included $1.5&nbsp;million of
administrative expenses and $4.3&nbsp;million of interest expense.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exploration expense decreased $8.9&nbsp;million to $2.4&nbsp;million in 1999.
During 1999 the Company significantly reduced exploration expenditures in an
effort to reduce indebtedness and capital risk.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses decreased 13% from $9.2&nbsp;million in
1998 to $8.0&nbsp;million in 1999. As a percentage of revenues, general and
administrative expenses were 4.0% in 1999 as compared to 6.2% in 1998. The
decrease was due to an overhead reduction program implemented late in 1998 and
the sharing of services with Great Lakes.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and other income increased $38.0&nbsp;million to $40.2&nbsp;million due to
proportional gain recognized on the Great Lakes transaction (See Note (17) -
Gain on Sale). Interest expense increased 16% to $47.1&nbsp;million as compared to
$40.6&nbsp;million in 1998. This was primarily a result of the higher average

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<P>outstanding debt balance during the year and a higher average cost of borrowing
on the Credit Facility. The average outstanding balances on the Credit
Facility were $272&nbsp;million and $308&nbsp;million for 1998 and 1999, respectively.
The weighted average interest rate on these borrowings were 6.7% and 7.1% for
the years ended December&nbsp;31, 1998 and 1999, respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depletion, depreciation and amortization (&#147;DD&#38;A&#148;) increased 27% compared to
1998 as a result of increased production volumes and lower proved reserves.
The Company-wide depletion rate was $.89 per Mcfe in 1998 and $1.04 per Mcfe in
1999. In the third quarter of 1999, the Company recognized a $21&nbsp;million
impairment on a gas processing plant located in the Permian Basin. The book
value of the plant was impaired to managements expectations of expected
proceeds from the sale based upon preliminary discussions with potential
buyers. The Company has decided to sell the plant and related assets and the
net book value of these assets is classified as a current asset at December&nbsp;31,
1999 on the Consolidated Balance Sheets (See Note (5) &#151; Assets held for Sale).
During 1999, the Company recorded $3.1&nbsp;million of depreciation expense for the
first nine months on its gas plant held for sale. In the fourth quarter of
1999, the Company recognized an impairment of $6.1&nbsp;million on its unproved
acreage value. Unproved properties are assessed periodically to determine
whether there has been a decline in value. If such decline is indicated, a
loss is recognized. The Company compares the carrying value of its unproved
properties to the estimated present value of the future cash flows of unproved properties
discounted at 10% or considers such other information the Company believes is
relevant in evaluating the properties&#146; fair value. Such other information may
include the Company&#146;s geological assessment of the area, other acreage
purchases in the area, or the properties&#146; uniqueness. The present value of
future cash flows from such properties has been adjusted for the Company&#146;s
assessment of risk related to the unproved properties. In assessing the risk
associated with unproved properties, the Company considers the recoverability
of unproved reserves that have been classified as probable and possible
reserves. Probable reserves are reserves not reasonably certain or proved, yet
are &#147;more likely to be recovered than not.&#148; Additionally, in the fourth
quarter, the Company adjusted the DD&#38;A rate for changes in reserves and
associated costs to $1.33 per Mcfe. Reserves were revised downward in 1999 due
to sharper decline rates in production and reservoir pressures than previously
estimated and after in-depth field evaluations. The Company currently
estimates that its DD&#38;A rate for 2000 will be approximately $1.25 per Mcfe.
The higher DD&#38;A rate makes it difficult for the Company to be consistently
profitable.

<P align="left"><I>Comparison of 1998 to 1997</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company reported a net loss for the year ended December&nbsp;31, 1998 of
$175.2&nbsp;million, as compared to a net loss of $23.3&nbsp;million for 1997. Due to
downward revisions on certain of its properties and the depressed energy price
environment, the Company recorded a provision for impairment of $207.1&nbsp;million
($156.2&nbsp;million after tax) and $5.9&nbsp;million ($5.0&nbsp;million after tax) of
valuation allowances on IPF receivables. The Company initiated a restructuring
plan to reduce costs and improve operating efficiencies. In connection with
the cost reduction program the Company recorded a charge of $3.1&nbsp;million ($2.7
million after tax).

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Oil and gas revenues increased 4% to $135.6&nbsp;million. During the year, oil
and gas production volumes increased 24% to 61.1 Bcfe, an average of 167.5
Mmcfe per day. The increased revenues recognized from production volumes were
negatively impacted by a 16% decrease in the average price received per Mcfe of
production to $2.22. The average oil price decreased 34% to $12.01 per barrel
and average gas prices decreased 12% to $2.33 per Mcf. During 1998, the
Company recorded gas revenues related to an above market gas contract with a
utility company representing 4.0 Bcf of gas production at an average price of
$3.77 per Mcf (approximately $15.1&nbsp;million of gas revenue). Had this gas been
sold on the same terms as other production was sold in the same geographical
region ($3.16 per Mcf), it would have resulted in a reduction in gas revenues
of approximately $2.4&nbsp;million. This gas contract expires June&nbsp;30, 2000. If
gas contracts cannot be found to replace the pricing received from this
above-market contract, the Company will sell such gas at current market prices.
Depending upon the market for natural gas at that time, this could have an
effect on the Company&#146;s future revenues and liquidity. As a result of the
Company&#146;s larger base of producing properties and production, oil and gas
production expenses increased 24% to $39.0&nbsp;million in 1998 versus $31.5&nbsp;million
in 1997. The average operating cost per Mcfe produced was $0.64 during both
periods.

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transportation, processing and marketing revenues decreased 14% to $6.7
million versus $7.8&nbsp;million in 1997, the decrease was principally due to the
sale of a gas processing plant in the San Juan Basin and a drop in natural gas
liquid prices which lowered gas processing revenues. IPF income has been
recorded for periods following the merger. IPF income consists of the interest
portion of the term overriding royalty interests. During 1998, IPF expenses
included $.5&nbsp;million of administrative expenses, $1.6&nbsp;million of interest
expense and a $5.9&nbsp;million valuation allowance.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exploration expense increased 346% to $11.3&nbsp;million due to the Company&#146;s
higher levels of seismic and exploratory drilling activity. During 1998 the
Company spent $4.3&nbsp;million on 5 exploratory dry holes compared to $0.3&nbsp;million
of dry hole costs in 1997.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses increased 74% from $5.3&nbsp;million in
1997 to $9.2&nbsp;million in 1998. As a percentage of revenues, general and
administrative expenses were 6.2% in 1998 as compared to 4% in 1997. The
increase was due to higher personnel costs associated with the Company&#146;s
growth, as well as, increased legal expenditures during 1998. In December
1998, the Company implemented an overhead reduction program in response to the
depressed energy price environment. The cuts included the termination of 54
employees, representing 27% of non-field staff.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and other income decreased 70% to $2.3&nbsp;million primarily due to
lower levels of non-strategic assets sales. Interest expense increased 50% to
$40.6&nbsp;million as compared to $27.2&nbsp;million in 1997. This was primarily a
result of the higher average outstanding debt balance during the year due to
the financing of acquisitions and drilling activities. The average outstanding
balances on the Credit Facility were $192.1&nbsp;million and $271.6&nbsp;million for 1997
and 1998, respectively. The weighted average interest rate on these borrowings
were 7.3% and 6.7% for the years ended December&nbsp;31, 1997 and 1998,
respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depletion, depreciation and amortization increased 9% compared to 1997 as
a result of increased production volumes. This increase was partially offset
by a decrease in the average depletion rate per Mcfe. The Company-wide
depletion rate was $1.03 per Mcfe in 1997 and $.89 per Mcfe in 1998. During
1998, the Company recorded $5.5&nbsp;million of depletion expense on properties
classified as assets held for sale at year end.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company recorded a provision for impairment due to the effect that
reserve revisions due to drilling results and depressed oil and gas prices had
on its proved and unproved reserves during 1998. The following are the
properties impaired during 1998 (in thousands):

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="76%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="9%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="9%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Impairment</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Property</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Sonora properties</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">65,712</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Sonora unproved acreage</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20,089</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Permian properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,018</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">West Texas properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,506</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Gulf Coast properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,117</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Michigan properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,644</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">East Texas properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,323</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Matagorda Island</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,643</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Mobile Bay</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,735</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">East &#38; West Cameron</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,905</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Offshore unproved acreage</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,177</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">South Texas unproved acreage</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,922</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Marketable securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,337</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">207,128</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Of the total impairment of $207.1&nbsp;million, 45% was due to downward reserve
revisions due to poor performance and drilling results and 55% was due to the
decline in oil and gas prices. The impairment of oil and gas properties
recorded in 1998 was based on estimates of future cash flows for each property
in the two categories evaluated for impairment: proved properties and unproved
properties. The impairment evaluation for proved properties utilized only
proved reserves and the impairment evaluation for unproved properties utilized
only unproved reserves. Future cash flows include revenues from anticipated
oil and natural gas production, severance taxes, direct operating costs and
capitalized costs. Unproved properties are assessed periodically to determine
whether there has been a decline in value. If such decline is indicated, a
loss is recognized. The Company compares the carrying value of its unproved
properties to the present value of the future cash flows of unproved properties
discounted at 10% or considers such other information the Company believes is
relevant in evaluating the properties&#146; fair value. Such other information may
include the Company&#146;s geological assessment of the area, other acreage
purchases in the area, or the properties&#146; uniqueness. The present value of
future cash flows from such properties has been adjusted for the Company&#146;s
assessment of risk related to the unproved properties. In assessing the risk
associated with unproved properties, the Company considers the recoverability
of unproved reserves that have been classified as probable and possible
reserves. Probable reserves are reserves not reasonably certain or proved, yet
are &#147;more likely to be recovered than not.&#148; Possible reserves are reasonably
possible but &#147;less likely to be recovered than not.&#148; The following is a table
of index prices used in the calculation of the revenues estimated from oil and
natural gas production over the anticipated life of the properties. These
prices were then adjusted for the effect of the Company&#146;s production subject to
existing sales contracts, and are not necessarily indicative of actual prices
received by the Company at the dates of the impairment charges.

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="15%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="20%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="21%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="16%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="16%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Year</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Oil prices</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gas prices</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">1999</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right" NOWRAP><FONT size="2">12.62&#150;13.25</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right" NOWRAP><FONT size="2">1.94-2.25</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2000</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">14.50 &#150; 16.00</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.23 - 2.30</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2001</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">15.60 &#150; 16.50</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.30 - 2.37</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2002</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">16.44 &#150; 17.10</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.35 - 2.44</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2003</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">17.00 &#150; 17.61</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.40 - 2.51</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2004</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">17.50 &#150; 18.14</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.45 - 2.59</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2005</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">17.90 &#150; 18.69</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.50 - 2.67</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2006</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">18.35 &#150; 19.25</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.58 - 2.75</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2007</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">18.81 &#150; 19.82</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.63 - 2.83</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2008</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">19.28 &#150; 20.42</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.69 - 2.91</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2009</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">19.76 &#150; 21.03</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.75 - 3.00</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Severance taxes, direct operating costs and capitalized costs were
estimated based on the Company&#146;s historical operating experience. These costs
and expenses were escalated at 3% per year for 10&nbsp;years and held constant
thereafter. These prices were applied to production profiles developed by the
Company&#146;s engineers using estimates of proved reserves and unproved reserves.
The impairment estimates were determined based on the difference between the
carrying value of the assets and the present value of future cash flows
discounted at 10%. It is reasonably possible that a change in reserve or price
estimates could occur in the near term and impact management&#146;s estimate of
future cash flows and consequently the carrying value of properties.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 1998, the Company compared the fair value of its
available-for-sale marketable securities to their historical cost. Due to the
fact that the fair values on certain individual securities were below their
historical cost and the Company determined that these declines in value were
other than temporary, it charged a $10.3&nbsp;million impairment against these
assets.

<P align="left"><I>Comparison of 1997 to 1996</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company reported a net loss for the year ended December&nbsp;31, 1997 of
$23.3&nbsp;million, as compared to $12.6&nbsp;million net income for 1996. During the
fourth quarter of 1997, the Company recorded a provision for impairment with
regard to certain of its oil and gas properties amounting to $58.7&nbsp;million
($38.7&nbsp;million after tax). Excluding the effects of the non-cash impairment
charge, net income would have risen 22%


<P align="center">30
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<P>to $15.4&nbsp;million. The increase is principally the result of (i)&nbsp;higher production volumes, (ii)&nbsp;lower per unit
operating and overhead costs and (iii)&nbsp;higher average product prices. During
the year, oil and gas production volumes increased 78% to 49.2 Bcfe, an average
of 134.7 Mmcfe per day. The increased revenues recognized from production
volumes were aided by an 7% increase in the average price received per Mcfe of
production to $2.64. The average oil price decreased 7% to $18.22 per barrel
while average gas prices increased 18% to $2.64 per Mcf. During 1997, the
Company recorded gas revenues related to an above market gas contract with a
utility company representing 6.0 Bcf of gas production at an average price of
$3.73 per Mcf ($22.4&nbsp;million of gas revenue). Had this gas been sold on the
same terms as other production that was sold in the same geographical region,
it would have resulted in a reduction in gas revenues of $8.1&nbsp;million. This
gas contract expires June&nbsp;30, 2000. Depending upon the market for natural gas
at that time, the possibility exists that the expiration of this contract could
have a material effect on the Company&#146;s future results of operations. As a
result of the Company&#146;s larger base of producing properties and production, oil
and gas production expenses increased 52% to $31.5&nbsp;million in 1997 versus $20.7
million in 1996. The average operating cost per Mcfe produced decreased 15%
from $0.75 in 1996 to $0.64 in 1997.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transportation, processing and marketing revenues increased 100% to $7.8
million versus $3.9&nbsp;million in 1996 principally due to production growth.
Exploration expense increased 73% to $2.5&nbsp;million due to the Company&#146;s
increased involvement in seismic and exploratory drilling activity.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses increased 33% from $4.0&nbsp;million in
1996 to $5.3&nbsp;million in 1997. As a percentage of revenues, general and
administrative expenses were 4% in 1997 as compared to 5% in 1996. This
decreasing trend reflects the spreading of administrative costs over a growing
asset base.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and other income rose 124% to $7.6&nbsp;million primarily due to $3.2
million on gains from sale of marketable securities (which were not related to
hedging activities), and $4.1&nbsp;million from the gain on the sale of
non-strategic assets. Interest expense increased 263% to $27.2&nbsp;million as
compared to $7.5&nbsp;million in 1996. This was primarily as a result of the higher
average outstanding debt balance during the year due to the financing of
acquisitions and drilling activities. The average outstanding balances on the
Credit Facility were $107.2&nbsp;million and $192.1&nbsp;million for 1996 and 1997,
respectively. The weighted average interest rate on these borrowings were 6.7%
and 7.3% for the years ended December&nbsp;31, 1996 and 1997, respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depletion, depreciation and amortization increased 148% compared to 1996
as a result of increased production volumes and increased depletion rates per
volume. The Company-wide depletion rate was $0.73 per Mcfe in 1996 and $1.03
per Mcfe in 1997.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company recorded a provision for impairment due to the effect that
depressed oil and gas prices had on its proved reserves during 1997. The
following are the properties impaired during 1997 (in thousands):

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="76%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="9%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="9%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Impairment</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Property</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Midcontinent properties</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">16,538</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Offshore properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,354</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">South Texas properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,022</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Permian properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26,786</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">58,700</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Of the total impairment of $58.7&nbsp;million, 24% was due to reserve revisions
due to poor performance and drilling results and 76% was due to the decline in
oil and gas prices. The impairment estimate recorded in 1997 was based on
estimates of future cash flows for each property in the two categories
evaluated for impairment: proved properties and unproved properties. The
impairment evaluation for proved properties utilized only proved reserves and
the impairment evaluation for unproved properties utilized only unproved
reserves. Future cash flows include revenues from anticipated oil and

<P align="center">31
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<P>natural gas production, severance taxes, direct operating costs and capitalized costs.
Based on management&#146;s estimates, crude oil price estimates used to calculate
these future net cash flows were based upon West Texas Intermediate posted
price that was $16.00 per barrel for 1998 and was held constant thereafter.
Natural gas price estimates were based upon NYMEX future price that was $2.15
per Mcf for 1998 and was held constant thereafter. These prices were then
adjusted for the effect of the Company&#146;s production subject to existing sales
contracts, and are not necessarily indicative of actual prices received by the
Company at the dates of the impairment charges.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Severance taxes, direct operating costs and capitalized costs were
estimated based on the Company&#146;s historical experience in its areas of
operations. The impairment estimates were determined based on the difference
between the carrying value of the assets and the present value of future cash
flows discounted at 10%. It is reasonably possible that a change in reserve or
price estimates could occur in the near term and adversely impact management&#146;s
estimate of future cash flows and consequently the carrying value of
properties.

<P align="left"><B>Year 2000</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Range has not experienced significant operational problems due to the Year
2000 issues. Range&#146;s significant suppliers, customers and service providers
have been able to transact business on a normal basis in 2000 and there are no
future problems anticipated that would materially impact Range&#146;s operations.
The total cost for the Year 2000 Project did not exceed $0.2&nbsp;million.

<!-- link2 "<B>ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA</B>" -->
<DIV align="left"><A NAME="010"></A></DIV>
<P align="left"><B>ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is made to the Index to Financial Statements on page 40 for a
listing of the Company&#146;s financial statements and notes thereto and for
supplementary schedules. Schedules I, III, IV, V, VI, VII, VIII, IX, X, XI,
XII and XIII have been omitted as not required or not applicable or because the
information required to be presented is included in the financial statements
and related notes.

<P align="left"><B>Management Responsibility for Financial Statements</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements have been prepared by management in conformity
with generally accepted accounting principles. Management is responsible for
the fairness and reliability of the financial statements and other financial
data included in this report. In the preparation of the financial statements,
it is necessary to make informed estimates and judgments based on currently
available information on the effects of certain events and transactions.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company maintains accounting and other controls which management
believes provide reasonable assurance that financial records are reliable,
assets are safeguarded, and that transactions are properly recorded. However,
limitations exist in any system of internal control based upon the recognition
that the cost of the system should not exceed benefits derived.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s independent auditors, Arthur Andersen LLP, are engaged to
audit the financial statements and to express an opinion thereon. Their audit
is conducted in accordance with generally accepted auditing standards to enable
them to report whether the financial statements present fairly, in all material
respects, the financial position and results of operations in accordance with
generally accepted accounting principles.

<!-- link2 "<B>ITEM 9. CHANGE IN ACCOUNTANTS AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE</B>" -->
<DIV align="left"><A NAME="011"></A></DIV>
<P align="left"><B>ITEM 9. CHANGE IN ACCOUNTANTS AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE</B>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>
<TR valign="top">
<TD>&nbsp;</TD>
<TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</TD>
</TR>
</TABLE>
<P align="center">32
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<!-- link1 "<B>PART III</B>" -->
<DIV align="left"><A NAME="012"></A></DIV>
<P align="center"><B>PART III</B>

<!-- link2 "<B>ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY</B>" -->
<DIV align="left"><A NAME="013"></A></DIV>
<P align="left"><B>ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The executive officers and directors of the Company are listed below,
together with a description of their experience and certain other information.
Each of the directors was elected for a one-year term at the Company&#146;s 1999
annual meeting of stockholders. Executive officers are appointed by the Board
of Directors.

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="31%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="48%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Held</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Name</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Age</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Office Since</B></FONT></TD>
<TD></TD>
<TD nowrap align="center"><FONT size="2"><B>Position With Company</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD nowrap align="center"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD valign="top"><FONT size="2">Thomas J. Edelman</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
49
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1988
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Chairman and Chairman of the Board</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">John H. Pinkerton</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
45
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1988
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">President, Chief Executive Officer
and Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">Robert E. Aikman</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
67
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1990
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">Anthony V. Dub</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
50
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1995
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">Allen Finkelson</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
53
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1994
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">Ben A. Guill</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
49
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1995
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">Jonathan S. Linker</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
50
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1998
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">Eddie M. LeBlanc III</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
51
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">2000
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Senior Vice President and Chief
Financial Officer</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">Herbert A. Newhouse</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
54
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1998
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Senior Vice President &#150; Gulf Coast</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">Chad L. Stephens</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
44
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1990
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Senior Vice President <I>&#150; </I>Southwest</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">Rodney L. Waller</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
50
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1999
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Senior Vice President and Corporate
Secretary</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">Michael V. Ronca</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
46
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1998
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Chief Operating Officer and Director
(left the Company in February&nbsp;2000)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">Catherine L. Sliva</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
40
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1998
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">Senior Vice President &#150; Independent
Producer Finance (resigned in
January&nbsp;2000)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Thomas J. Edelman, </I>Chairman and Chairman of the Board of Directors, joined
the Company in 1988. He served as its Chief Executive Officer until 1992.
From 1981 to 1997, Mr.&nbsp;Edelman served as a director and President of Snyder Oil
Corporation (&#147;SOCO&#148;), an independent, publicly traded oil and gas company. In
1996, Mr.&nbsp;Edelman was appointed Chairman and Chief Executive Officer of Patina
Oil &#38; Gas Corporation. Prior to 1981, Mr.&nbsp;Edelman was a Vice President of The
First Boston Corporation. From 1975 through 1980, Mr.&nbsp;Edelman was with Lehman
Brothers Kuhn Loeb Incorporated. Mr.&nbsp;Edelman received his Bachelor of Arts
Degree from Princeton University and his Masters Degree in Finance from Harvard
University&#146;s Graduate School of Business Administration. Mr.&nbsp;Edelman serves as
a director of Paradise Music &#38; Entertainment, Inc. and a director of the
general partner of Star Gas Partners, L.P., a publicly-traded master limited
partnership, which distributes fuel oil and propane gas.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>John H. Pinkerton, </I>President, Chief Executive Officer and a Director,
joined the Company in 1988 as a Director. He was appointed President in 1990
and Chief Executive Officer in 1992. Previously, Mr.&nbsp;Pinkerton was Senior Vice
President-Acquisitions of SOCO. Prior to joining SOCO in 1980, Mr.&nbsp;Pinkerton
was with Arthur Andersen &#38; Co. Mr.&nbsp;Pinkerton received his Bachelor of Arts
Degree in Business Administration from Texas Christian University and his
Master of Arts Degree in Business Administration from the University of Texas.
Mr.&nbsp;Pinkerton is also director of Venus Exploration, Inc., a publicly traded
exploration and production company in which Range owned 19% at December&nbsp;31,
1999.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Robert E. Aikman, </I>a Director, joined the Company in 1990. Mr.&nbsp;Aikman has
more than 40&nbsp;years experience in petroleum and natural gas exploration and
production throughout the United States and Canada. From 1984 to 1994 he was
Chairman of the Board of Energy Resources Corporation. From 1979 through 1984,
he was the President and principal shareholder of Aikman Petroleum, Inc. From
1971 to 1977, he was President of Dorchester Exploration Inc. and from 1971 to
1980, he was a Director and a member of the Executive Committee of Dorchester
Gas Corporation. Mr.&nbsp;Aikman is also Chairman of Provident Communications, Inc.,
President of OGP Technologies, Inc., and President of The Hawthorne Company, an

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<P>entity which organizes joint ventures and provides advisory services for the
acquisition of oil and gas properties, including the financial restructuring,
reorganization and sale of companies. He was President of Enertec Corporation
that was reorganized under Chapter&nbsp;11 of the Bankruptcy Code in December&nbsp;1994.
In addition, Mr.&nbsp;Aikman is a director of the Panhandle Producers and Royalty
Owners Association and a member of the Independent Petroleum Association of
America, Texas Independent Producers and Royalty Owners Association and
American Association of Petroleum Landmen. Mr.&nbsp;Aikman graduated from the
University of Oklahoma in 1952.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Anthony V. Dub </I>was elected to serve as a Director of the Company in 1995.
Mr.&nbsp;Dub is Chairman of Indigo Capital, LLC, a financial advisory firm based in
New York City. Prior to forming Indigo Capital in 1997, he served as an
officer of Credit Suisse First Boston, an investment banking firm. Mr.&nbsp;Dub
joined Credit Suisse First Boston in 1971 and was named a Managing Director in
1981. Mr.&nbsp;Dub received his Bachelor of Arts Degree from Princeton University
in 1971.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Allen Finkelson, </I>was appointed a Director in 1994.&nbsp;Mr.&nbsp;Finkelson has been
a partner at Cravath, Swaine &#38; Moore since 1977, with the exception of the
period from September&nbsp;1983 through August&nbsp;1985, when he was a managing director
of Lehman Brothers Kuhn Loeb Incorporated. Mr.&nbsp;Finkelson was first employed by
Cravath, Swaine &#38; Moore as an associate in 1971. Mr.&nbsp;Finkelson received his
Bachelor of Arts Degree from St. Lawrence University and his Doctor of Laws
Degree from Columbia University School of Law.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Ben A. Guill, </I>was elected to serve as a Director of the Company in 1995.
In September&nbsp;1998 Mr.&nbsp;Guill joined First Reserve Corporation as President of
its Houston office. First Reserve is a private equity firm, dedicated to the
energy industry. Prior to joining First Reserve, Mr.&nbsp;Guill was a Partner and
Managing Director of Simmons &#38; Company International, an investment banking
firm located in Houston, Texas, which focuses on the oil service and equipment
industry. Mr.&nbsp;Guill had been with Simmons &#38; Company since 1980. Prior to that
Mr.&nbsp;Guill was with Blyth Eastman Dillon &#38; Company from 1978 to 1980. Mr.&nbsp;Guill
received his Bachelor of Arts Degree from Princeton University and his Masters
Degree in Finance from the Wharton Graduate School of Business at the
University of Pennsylvania.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Jonathan S. Linker </I>has served as a Director of the Company since the
Merger in August&nbsp;1998. Mr.&nbsp;Linker has been a Managing Director of First
Reserve since 1996, the President and a director of IDC Energy Corporation
since 1987, and a Vice President and Director of Sunset Production Corporation
since 1991. Mr.&nbsp;Linker earned a Bachelor of Arts degree in Geology from
Amherst College, a Master of Arts degree in Geology from Harvard University and
a Master of Business Administration degree from the Harvard Business School.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Eddie M. LeBlanc III, </I>Senior Vice President and Chief Financial Officer
joined the Company in January&nbsp;2000. Previously Mr.&nbsp;LeBlanc was a founder of
Interstate Natural Gas Company, which merged into Coho Energy in 1994. At Coho
Energy Mr.&nbsp;LeBlanc served as Senior Vice President and Chief Financial Officer.
Mr.&nbsp;LeBlanc&#146;s twenty-five years of experience include assignments in the oil
and gas subsidiaries of Celeron Corporation and Goodyear Tire and Rubber.
Prior to his industry experience, Mr.&nbsp;LeBlanc was with a national accounting
firm, he is a certified public accountant, a chartered financial analyst, and
holds a Bachelor&#146;s degree from University of Southwest Louisiana.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Herbert A. Newhouse, </I>Senior Vice President &#150; Gulf Coast, joined the
Company in 1998. Prior to joining Range, Mr.&nbsp;Newhouse served as Executive Vice
President of Domain Energy Corporation. He was a former Vice President of
Tenneco Ventures Corporation. Mr.&nbsp;Newhouse was an employee of Tenneco for over
17&nbsp;years and has 30&nbsp;years of operational and managerial experience in oil and
gas exploration and production. Mr.&nbsp;Newhouse received his Bachelor&#146;s degree in
Chemical Engineering from Ohio State University.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Chad L. Stephens, </I>Senior Vice President <I>&#150; </I>Southwest, joined the Company in
1990. Previously, Mr.&nbsp;Stephens was with Duer Wagner &#38; Co., an independent oil
and gas producer, since 1988. Prior thereto, Mr.&nbsp;Stephens was an independent
oil operator in Midland, Texas for four years. From 1979 to 1984,


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<P>Mr.&nbsp;Stephens was with Cities Service Company and HNG Oil Company. Mr.&nbsp;Stephens received his
Bachelor of Arts Degree in Finance and Land Management from the University of
Texas.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Rodney L. Waller, </I>Senior Vice President and Corporate Secretary joined
Range in September 1999. Previously, Mr.&nbsp;Waller had been with Snyder Oil
Corporation, now Santa Fe Snyder Corporation since 1977, where he served as a senior vice
president. Before joining Snyder, Mr.&nbsp;Waller was employed by Arthur Andersen.
Mr.&nbsp;Waller received his Bachelor of Arts degree from Harding University, and
holds a certified public accountant designation.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Michael V. Ronca</I>, Chief Operating Officer and a Director, joined the
Company in 1998. Prior thereto, Mr.&nbsp;Ronca served as the President of Domain
Energy Corporation. Mr.&nbsp;Ronca left the Company in February&nbsp;2000.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Catherine L. Sliva</I><B><I>, </I></B>Senior Vice President &#150; Independent Producer Finance,
joined the Company in connection with the Merger in August&nbsp;1998. Prior to
joining Range, Ms.&nbsp;Sliva served as Executive Vice President of Domain Energy
Corporation. Ms.&nbsp;Sliva resigned her position with the Company in January&nbsp;2000.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Range Board has established three committees to assist in the
discharge of its responsibilities.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Committee.&nbsp;The Audit Committee reviews the professional services
provided by Range&#146;s independent public accountants and the independence of such
accountants from management of Range. This Committee also reviews the scope of
the audit coverage, the annual financial statements of Range and such other
matters with respect to the accounting, auditing and financial reporting
practices and procedures of Range as it may find appropriate or as have been
brought to its attention. Messrs.&nbsp;Aikman, Dub and Guill are the members of the
Audit Committee.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation Committee.&nbsp;The Compensation Committee reviews and approves
executive salaries and administers bonus, incentive compensation and stock
option plans of Range. This Committee advises and consults with management
regarding pensions and other benefits and significant compensation policies and
practices of Range. This Committee also considers nominations of candidates
for corporate officer positions. The members of the Compensation committee are
Messrs.&nbsp;Aikman, Finkelson and Guill.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive Committee.&nbsp;The Executive Committee reviews and authorizes
actions required in the management of the business and affairs of Range, which
would otherwise be determined by the Board, where it is not practicable to
convene the full Board. One of the principal responsibilities of the Executive
Committee will be to review and approve smaller acquisitions. The members of
the Executive Committee are Messrs.&nbsp;Edelman, Finkelson and Pinkerton.

<!-- link2 "<B>ITEM 11. COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS</B>" -->
<DIV align="left"><A NAME="014"></A></DIV>
<P align="left"><B>ITEM 11. COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information with respect to executive compensation is incorporated herein
by reference to the Company&#146;s Proxy Statement for its 2000 annual meeting of
stockholders.

<!-- link2 "<B>ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B>" -->
<DIV align="left"><A NAME="015"></A></DIV>
<P align="left"><B>ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information with respect to security ownership of certain beneficial
owners and management is incorporated herein by reference to the Company&#146;s
Proxy Statement for its 2000 annual meeting of stockholders.

<!-- link2 "<B>ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>" -->
<DIV align="left"><A NAME="016"></A></DIV>
<P align="left"><B>ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information with respect to certain relationships and related transactions is incorporated herein by
reference to the Company&#146;s Proxy Statement for its 2000 annual meeting of stockholders.

<P align="center">35

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<!-- link1 "<B>PART IV</B>" -->
<DIV align="left"><A NAME="017"></A></DIV>
<P align="center"><B>PART IV</B>

<!-- link2 "<B>ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K</B>" -->
<DIV align="left"><A NAME="018"></A></DIV>
<P align="left"><B>ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K</B>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="80%" align="center">
<TR valign="bottom">
<TD width="8%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="87%">&nbsp;</TD>
</TR>

<TR valign="bottom">
<TD valign="top"><FONT size="2">(a)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
1. and 2. Financial Statements and Financial Statement
Schedules.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
The items listed in the accompanying index to financial statements
are filed as part of this Annual Report on Form&nbsp;10-K.</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
3. Exhibits.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
The items listed on the accompanying index to exhibits are filed
as part of this Annual Report on Form&nbsp;10-K.</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">(b)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Reports on Form&nbsp;8-K.</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
The Company&#146;s Current Report on Form&nbsp;8-K, dated October&nbsp;15, 1999.</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">(c)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Exhibits required by Item&nbsp;601 of Regulation&nbsp;S-K.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Exhibits required to be filed by the Company pursuant to Item&nbsp;601
of Regulation&nbsp;S-K are contained in Exhibits listed in response to
Item&nbsp;14 (a)3, and are incorporated herein by reference.</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">(d)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Financial Statement Schedules Required by Regulation&nbsp;S-X.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
The items listed in the accompanying index to financial statements
are filed as part of this Annual Report on Form&nbsp;10-K.</FONT></TD>
</TR>
</TABLE>
</CENTER>
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<!-- link1 "<B>SIGNATURES</B>" -->
<DIV align="left"><A NAME="019"></A></DIV>
<P align="center"><B>SIGNATURES</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Pursuant to the requirements of Section&nbsp;13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.</B>

<P align="left">Dated: March 20, 2000

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
<TD width="66%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="29%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
<B>RANGE RESOURCES CORPORATION</B></FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
By: /s/ John H. Pinkerton</FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2"><HR size="1"></FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
John H. Pinkerton</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
President</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Pursuant to the requirements of the Securities
Exchange Act of 1934, this
report has been signed below by the persons on behalf of the Company and in the
capacities and on the dates indicated.</B>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
<TD width="47%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="48%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">/s/ Thomas J. Edelman</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Thomas J. Edelman,</FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2"></FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">March 20, 2000</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Chairman and Chairman of the Board</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">/s/ John H. Pinkerton</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
John H. Pinkerton,</FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2"></FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">March 20, 2000</FONT></TD>
<TD></TD>
<TD nowrap align="left" valign="top"><FONT size="2">
Chief Executive Officer, President and Director</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">/s/ Eddie M. LeBlanc III</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Eddie M. LeBlanc III</FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2"></FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">March 20, 2000 </FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Chief Financial and Accounting Officer</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">/s/ Robert E. Aikman</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Robert E. Aikman, Director</FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2"></FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">March 20, 2000</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">/s/ Allen Finkelson</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Allen Finkelson, Director</FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2"></FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">March 20, 2000</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">/s/ Anthony V. Dub</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Anthony V. Dub, Director</FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2"></FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">March 20, 2000</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">/s/ Ben A. Guill</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Ben A. Guill, Director</FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2"></FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">March 20, 2000</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">/s/ Jonathan S. Linker</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Jonathan S. Linker, Director</FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2"><HR size="1"></FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2"></FONT></TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">March 20, 2000</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">37
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<!-- link1 "<B>GLOSSARY</B>" -->
<DIV align="left"><A NAME="020"></A></DIV>
<P align="center"><B>GLOSSARY</B>

<P>The terms defined in this glossary are used throughout this report.

<P><I>Bbl.&nbsp;</I>One stock tank barrel, or 42 U.S. gallons liquid volume, used herein in
reference to crude oil or other liquid hydrocarbons.

<P><I>Bcf.&nbsp;</I>One billion cubic feet.

<P><I>Bcfe.&nbsp;</I>One billion cubic feet of natural gas equivalents, based on a ratio of 6
Mcf for each barrel of oil, which reflects the relative energy content.

<P><I>Credit Facility.&nbsp;</I>The Range Resources Corporation $225&nbsp;million revolving bank
facility.

<P><I>Development well.&nbsp;</I>A well drilled within the proved area of an oil or natural
gas reservoir to the depth of a stratigraphic horizon known to be productive.

<P><I>Dry hole.&nbsp;</I>A well found to be incapable of producing either oil or natural gas
in sufficient quantities to justify completion as an oil or gas well.

<P><I>Exploratory well.&nbsp;</I>A well drilled to find and produce oil or gas in an unproved
area, to find a new reservoir in a field previously found to be productive of
oil or gas in another reservoir, or to extend a known reservoir.

<P><I>Gross acres or gross wells.&nbsp;</I>The total acres or wells, as the case may be, in
which a working interest is owned.

<P><I>Infill well.&nbsp;</I>A well drilled between known producing wells to better exploit
the reservoir.

<P><I>Mbbl.&nbsp;</I>One thousand barrels of crude oil or other liquid hydrocarbons.

<P><I>Mcf.&nbsp;</I>One thousand cubic feet.

<P><I>Mcf/d.&nbsp;</I>One thousand cubic feet per day.

<P><I>Mcfe.&nbsp;</I>One thousand cubic feet of natural gas equivalents, based on a ratio of
6 Mcf for each barrel of oil, which reflects the relative energy content.

<P><I>Merger.&nbsp;</I>The acquisition via merger of Domain Energy Corporation by Lomak Petrolum, Inc. in August 1998. Simultaneously, Lomak's name was change to Range Resources Corporation.

<P><I>Mmbbl.&nbsp;</I>One million barrels of crude oil or other liquid hydrocarbons.

<P><I>Mmbtu.&nbsp;</I>One million British thermal units. One British thermal unit is the
heat required to raise the temperature of a one-pound mass of water from 58.5
to 59.5 degrees Fahrenheit.

<P><I>Mmcf.&nbsp;</I>One million cubic feet.

<P><I>Mmcfe.&nbsp;</I>One million cubic feet of natural gas equivalents.

<P><I>Net acres or net wells.&nbsp;</I>The sum of the fractional working interests owned in
gross acres or gross wells.

<P><I>Net oil and gas sales.&nbsp;</I>Oil and natural gas sales less oil and natural gas
production expenses.

<P><I>Oil and gas royalty trust.&nbsp;</I>An arrangement whereby typically, the creating
company conveys a net profits interest in certain of its oil and gas properties
to the newly created trust and then distributes ownership units in the trust to
its unitholders. The function of the trust is to serve as agent to distribute
income from the net profits interest to its unitholders.
<P align="center">38
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P><I>Present Value.&nbsp;</I>The pre-tax present value, discounted at 10%, of future net
cash flows from estimated proved reserves, calculated holding prices and costs
constant at amounts in effect on the date of the report (unless such prices or
costs are subject to change pursuant to contractual provisions) and otherwise
in accordance with the Commission&#146;s rules for inclusion of oil and gas reserve
information in financial statements filed with the Commission.

<P><I>Productive well.&nbsp;</I>A well that is producing oil or gas or that is capable of
production.

<P><I>Proved developed non-producing reserves.&nbsp;</I>Reserves that consist of (i)&nbsp;proved
reserves from wells which have been completed and tested but are not producing
due to lack of market or minor completion problems which are expected to be
corrected and (ii)&nbsp;proved reserves currently behind the pipe in existing wells
and which are expected to be productive due to both the well log
characteristics and analogous production in the immediate vicinity of the
wells.

<P><I>Proved developed producing reserves.&nbsp;</I>Proved reserves that can be expected to
be recovered from currently producing zones under the continuation of present
operating methods.

<P><I>Proved developed reserves.&nbsp;</I>Proved reserves that can be expected to be
recovered through existing wells with existing equipment and operating methods.

<P><I>Proved reserves.&nbsp;</I>The estimated quantities of crude oil, natural gas and
natural gas liquids which geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs
under existing economic and operating conditions.

<P><I>Proved undeveloped reserves.&nbsp;</I>Proved reserves that are expected to be recovered
from new wells on undrilled acreage, or from existing wells where a relatively
major expenditure is required for recompletion.

<P><I>Recompletion.&nbsp;</I>The completion for production of an existing wellbore in another
formation from that in which the well has previously been completed.

<P><I>Reserve life index.&nbsp;</I>The presentation of proved reserves defined in number of
years of annual production.

<P><I>Royalty interest.&nbsp;</I>An interest in an oil and gas property entitling the owner
to a share of oil and natural gas production free of costs of production.

<P><I>Standardized Measure.&nbsp;</I>The present value, discounted at 10%, of future net cash
flows from estimated proved reserves after income taxes calculated holding
prices and costs constant at amounts in effect on the date of the report
(unless such prices or costs are subject to change pursuant to contractual
provisions) and otherwise in accordance with the Commission&#146;s rules for
inclusion of oil and gas reserve information in financial statements filed with
the Commission.

<P><I>Term overriding royalty.&nbsp;</I>A royalty interest that is carved out of the
operating or working interest in a well. Its term does not extend to the
economic life of the property and is of shorter duration than the underlying
working interest. The term overriding royalties in which the Company
participates through its Independent Producer Finance subsidiary typically
extend until amounts financed and a designated rate of return have been
achieved. At such point in time, the override interest reverts back to the
working interest owner.

<P><I>Working interest.&nbsp;</I>The operating interest that gives the owner the right to
drill, produce and conduct operating activities on the property and a share of
production, subject to all royalties, overriding royalties and other burdens
and to all costs of exploration, development and operations and all risks in
connection therewith.
<P align="center">39
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<P align="center"><B>RANGE RESOURCES CORPORATION</B>

<!-- link1 "<B>INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES</B>" -->
<DIV align="left"><A NAME="021"></A></DIV>
<P align="center"><B>INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES</B>

<P align="center"><B>(Item&nbsp;14[a], [d])</B>



<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="center">
<TR valign="bottom">
<TD width="94%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Page</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Report of Independent Public Accountants</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Consolidated balance sheets at December&nbsp;31, 1998 and 1999</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">42</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Consolidated statements of income for the years ended December&nbsp;31, 1997, 1998 and 1999</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">43</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Consolidated statements of stockholders&#146; equity for the years ended December&nbsp;31, 1997, 1998 and 1999</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">44</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Consolidated statements of cash flows for the years ended December&nbsp;31, 1997, 1998 and 1999</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Notes to consolidated financial statements</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">46</FONT></TD>
<TD></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Exhibits</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All other schedules have been omitted since the required information is
not present in amounts sufficient to require submission of the schedule, or
because the information required is included in the financial statements or
footnotes.
<P align="center">40
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<!-- link1 "<B>REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS</B>" -->
<DIV align="left"><A NAME="022"></A></DIV>
<P align="center"><B>REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>To The Board of Directors and Stockholders
Range Resources Corporation</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have audited the accompanying consolidated balance sheets of Range
Resources Corporation (a Delaware corporation) as of December&nbsp;31, 1998 and
1999, and the related consolidated statements of income, stockholders&#146; equity
and cash flows for each of the three years in the period ended December&nbsp;31,
1999. These financial statements are the responsibility of the Company&#146;s
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Range Resources Corporation
as of December&nbsp;31, 1998 and 1999, and the results of its operations and its
cash flows for the three years in the period ended December&nbsp;31, 1999, in
conformity with accounting principles generally accepted in the United States.

<P align="right"><B>ARTHUR ANDERSEN LLP</B>


<P>Cleveland, Ohio



<P>February&nbsp;18, 2000


<P align="center">41
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><B>RANGE RESOURCES CORPORATION</B>

<!-- link1 "<B>CONSOLIDATED BALANCE SHEETS</B>" -->
<DIV align="left"><A NAME="023"></A></DIV>
<P align="center"><B>CONSOLIDATED BALANCE SHEETS<BR></B>
<B>(In thousands, except per share data)</B>
</P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="58%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="5"><FONT size="2"><B>Assets</B></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">Current assets</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Cash and equivalents</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">10,954</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">12,937</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Accounts receivable</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">30,384</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,646</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">IPF receivables (Note 4)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,140</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,500</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Marketable securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,258</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,145</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Assets held for sale (Note 5)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">51,822</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,660</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Inventory and other</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,373</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,051</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">106,931</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">72,939</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">IPF receivables, net (Note 4)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">70,032</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">52,913</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">Oil and gas properties, successful efforts method</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">935,822</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">978,919</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Accumulated depletion and impairment</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">(273,723</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(383,622</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">662,099</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">595,297</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">Transportation, processing and field assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">89,471</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">33,777</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Accumulated depreciation</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">(15,146</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(10,572</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">74,325</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,205</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">Other</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,225</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,015</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">921,612</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">752,368</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"><FONT size="2"><B>Liabilities and Stockholders&#146; Equity</B></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">Current liabilities</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Accounts payable</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">28,163</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">23,925</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Accrued liabilities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,773</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,305</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Accrued payroll and benefit costs</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,156</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,769</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Accrued interest</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,439</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,635</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Accrued business restructuring costs (Note 13)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,697</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Current portion of debt (Note 6)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,187</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,014</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">116,415</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">53,648</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">Senior debt (Note 6)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">311,875</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">135,000</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">Non-recourse debt (Note 6)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,100</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">142,520</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">Subordinated notes (Note 6)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">180,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,360</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">Commitments and contingencies (Note 8)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">Company-obligated preferred
securities of subsidiary trust (Note 9)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">117,669</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="5"><FONT size="2">Stockholders&#146; equity (Notes 9 and 10)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Preferred stock, $1 Par, 10,000,000 shares authorized,</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">&nbsp;&nbsp;$2.03 convertible preferred, 1,149,840 issued</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">&nbsp;&nbsp;and outstanding (liquidation preference $28,746,000)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,150</FONT></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Common stock, $.01 par, 50,000,000 shares authorized,</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">&nbsp;&nbsp;35,933,523 and 37,901,789 issued</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">359</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">379</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Capital in excess of par value</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">334,817</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">340,279</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Retained deficit</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(203,396</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(214,630</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="4"><FONT size="2">Other comprehensive income (loss)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">292</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">133,222</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">127,171</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">921,612</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">752,368</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="5"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><B>See accompanying notes.</B>


<P align="center">42
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><B>RANGE RESOURCES CORPORATION</B>

<!-- link1 "<B>CONSOLIDATED STATEMENTS OF INCOME</B>" -->
<DIV align="left"><A NAME="024"></A></DIV>
<P align="center"><B>CONSOLIDATED STATEMENTS OF INCOME<BR></B>
<B>(In thousands, except per share data)</B>
</P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="54%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2">Revenues</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Oil and gas sales</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">130,017</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">135,593</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">145,492</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Transportation, processing and marketing</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,806</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,711</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,770</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">IPF income, net of allowances</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,370</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,872</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Interest and other</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,594</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,255</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,230</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">145,417</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">148,929</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">201,364</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Expenses</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Direct operating</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">31,481</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">39,001</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">43,074</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">IPF expense</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,996</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,825</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Exploration</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,527</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,265</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,409</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">General and administrative</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,290</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,215</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,028</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Interest</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,175</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,642</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">47,085</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Depletion, depreciation and amortization</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,407</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,153</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">76,447</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Provision for impairment (amounts include</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$37.7&nbsp;million and $21.0&nbsp;million related to</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;assets held for sale in 1998 and 1999, respectively)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">58,700</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">207,128</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,118</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Business restructuring costs (Note 13)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,147</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">180,580</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">378,547</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">209,986</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Income (loss)&nbsp;before taxes</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(35,163</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(229,618</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8,622</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Income taxes</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Current</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">684</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">278</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,601</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Deferred</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(12,515</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(54,746</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(11,831</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(54,468</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,601</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Income (loss)&nbsp;before extraordinary item</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(23,332</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(175,150</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(10,223</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Extraordinary item</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Gain on retirement of securities (Note 18)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,430</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Net income (loss)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(23,332</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(175,150</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(7,793</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Comprehensive income (loss) (Note 2)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(24,524</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(175,260</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(8,566</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Earnings (loss)&nbsp;per common share before</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">extraordinary item: (Note 14)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Basic</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(0.34</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Dilutive</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(0.34</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Earnings (loss)&nbsp;per common share after</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">extraordinary item: (Note 14)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Basic</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(0.27</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Dilutive</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(0.27</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><B>See accompanying notes.</B>


<P align="center">43
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><B>RANGE RESOURCES CORPORATION</B>

<!-- link1 "<B>CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146; EQUITY</B>" -->
<DIV align="left"><A NAME="025"></A></DIV>
<P align="center"><B>CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146; EQUITY<BR></B>
<B>(In thousands)</B>
</P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="35%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>Preferred Stock</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>Common Stock</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Capital in</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Retained</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Other</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Par</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Par</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Excess of</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Earnings</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Comprehensive</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Shares</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Value</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Shares</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Value</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Par Value</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(Deficit)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Income (loss)</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2">Balance, December&nbsp;31, 1996</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,751</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">148</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">110,248</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">5,291</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">692</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Preferred dividends</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,334</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common dividends at $.10 per</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">&nbsp;&nbsp;share</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,037</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common issued</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,307</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">63</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">107,293</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common repurchased</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(107</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Compensation in connection with
&nbsp;&nbsp;stock options</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">197</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Unrealized loss on</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">investments</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"></FONT></TD>
<TD align="right"><FONT size="2">(322</FONT></TD>
<TD align="left"><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Net loss</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(23,332</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Balance, December&nbsp;31, 1997</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,058</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">211</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">217,631</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(22,412</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">370</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Preferred dividends</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,334</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common dividends at $.12 per</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">&nbsp;&nbsp;share</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,500</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common issued</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,276</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">152</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,188</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common repurchased</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(401</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,002</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Unrealized loss on</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">investments</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"></FONT></TD>
<TD align="right"><FONT size="2">(78</FONT></TD>
<TD align="left"><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Net loss</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(175,150</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>


<TR valign="bottom">
<TD colspan="3"><FONT size="2">Balance, December&nbsp;31, 1998</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">35,933</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">359</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">334,817</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(203,396</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">292</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Preferred dividends</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,334</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common dividends at $.03 per
share</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,107</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common issued</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,270</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,113</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Convertible securities conversion</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">699</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,349</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Unrealized loss on</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">investments</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(299</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Net loss</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,793</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Balance, December&nbsp;31, 1999</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">37,902</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">379</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">340,279</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(214,630</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(7</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><B>See accompanying notes.</B>


<P align="center">44
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>RANGE RESOURCES CORPORATION</B>

<!-- link1 "<B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B>" -->
<DIV align="left"><A NAME="026"></A></DIV>
<P align="center"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS<BR></B>
<B>(In thousands)</B>
</P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="53%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="4"><FONT size="2">Cash flows from operations:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net (loss)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(23,332</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(175,150</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(7,793</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Adjustments to reconcile net (loss)&nbsp;to net cash provided
by operations:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Depletion, depreciation and amortization</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,407</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,153</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">76,447</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Provision for impairment</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">58,700</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">207,128</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,118</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Valuation reserve of IPF receivables</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,918</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,962</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Amortization of deferred offering costs</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">999</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,293</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,333</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Deferred income taxes</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(12,541</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(54,746</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Changes in working capital net of effects of acquired
businesses:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Accounts receivable</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(11,079</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,842</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,738</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Marketable securities</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,964</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(253</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(35</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Inventory and other</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,981</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,996</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,958</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Accounts payable</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,825</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4,274</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,560</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Accrued liabilities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,186</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,068</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8,355</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Gain on sale of assets and other</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8,154</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,817</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(39,280</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Net cash provided by operations</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">77,066</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45,022</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">52,617</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Cash flows from investing:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Acquisition of businesses, net of cash</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(41,170</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Investment in Great Lakes</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">96,285</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Oil and gas properties</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(492,259</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(135,399</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(25,093</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Additions to property and equipment</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(64,945</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,732</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(656</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">IPF investments of capital</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(12,649</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(5,362</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">IPF repayments of capital</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,556</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,160</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Proceeds on sale of assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">56,070</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,081</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,476</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Net cash provided by (used in) investing</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(501,134</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(172,313</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">95,810</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Cash flows from financing:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Proceeds from indebtedness</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">246,025</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">135,788</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Repayments of indebtedness</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(26</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(413</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(145,129</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Preferred stock dividends</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,334</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,334</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,334</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Common stock dividends</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,037</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,500</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,107</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Proceeds from trust preferred securities issuance, net</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">115,999</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Proceeds from common stock issuance, net</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">67,648</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,985</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,152</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Repurchase of common stock</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(107</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,006</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(26</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Net cash provided by (used in) financing</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">425,168</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">128,520</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(146,444</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Change in cash</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,100</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,229</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,983</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Cash and equivalents at beginning of period</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,625</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,725</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,954</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Cash and equivalents at end of period</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">9,725</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">10,954</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">12,937</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Supplemental disclosures of non-cash investing and
financing activities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Purchase of property and equipment financed with
common stock</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">39,537</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">116,469</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Common stock issued in connection with benefit plans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">398</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,887</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,783</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Common stock exchanged for convertible securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,978</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><B>See accompanying notes.</B>

<P align="center">45
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<!-- link1 "<B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>" -->
<DIV align="left"><A NAME="027"></A></DIV>
<P align="center"><B>RANGE RESOURCES CORPORATION</B>
<P align="center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>
</P>

<!-- link2 "<B>(1)&nbsp;ORGANIZATION AND NATURE OF BUSINESS</B>" -->
<DIV align="left"><A NAME="028"></A></DIV>
<P align="left"><B>(1)&nbsp;ORGANIZATION AND NATURE OF BUSINESS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Range Resources Corporation (&#147;Range&#148; or the &#147;Company&#148;) is an independent
oil and gas company engaged in development, exploration and acquisition
primarily in three core areas: Southwest, Gulf Coast and Appalachia. In
addition, through its IPF subsidiary, the Company provides financing to smaller
independent oil and gas producers by purchasing term overriding royalty
interests in oil and gas properties. Historically, the Company has increased
its reserves and production through acquisitions, development and exploration.
In pursuing this strategy, the Company has concentrated its activities in
selected geographic areas. In each core area, the Company has established
operating, engineering, geoscience, marketing and acquisition expertise.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August&nbsp;1998, the stockholders of the Company approved the acquisition
via merger (the &#147;Merger&#148;) of Domain Energy Corporation (&#147;Domain&#148;). Pursuant to
the Merger, stockholders of Domain received approximately 13.6&nbsp;million shares
of the Company&#146;s Common Stock. The Company also purchased 3.8&nbsp;million Domain
shares for $50.5&nbsp;million in cash. As a result of the Merger, Domain became a
wholly-owned subsidiary of Range.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September&nbsp;1999, Range and FirstEnergy Corp.&nbsp;(&#147;FirstEnergy&#148;) each
contributed all of their Appalachia oil and gas properties and associated gas
gathering and transportation systems to Great Lakes Energy Partners (&#147;Great
Lakes&#148;). In addition, Range contributed $188.3&nbsp;million of indebtedness and
FirstEnergy contributed $2.0&nbsp;million in cash. Great Lakes expects to increase
production by active development of existing fields and exploitation of deeper
formations. In addition, Great Lakes intends to pursue acquisition
opportunities in Appalachia. Range and FirstEnergy each retained a 50%
ownership interest in Great Lakes and share management responsibilities.

<!-- link2 "<B>(2)&nbsp;SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>" -->
<DIV align="left"><A NAME="029"></A></DIV>
<P align="left"><B>(2)&nbsp;SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>

<P align="left"><B>Basis of Presentation</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying financial statements include the accounts of the Company,
all majority owned subsidiaries and its pro rata share of the assets,
liabilities, income and expenses of certain oil and gas partnerships and joint
ventures. Highly liquid temporary investments with an initial maturity of
ninety days or less are considered cash equivalents.

<P align="left"><B>Revenue Recognition</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company recognizes revenues from the sale of its respective products
in the period delivered. Revenues for services are recognized in the period
the services are provided. Revenues for IPF are recognized in the
period collected.

<P align="left"><B>Marketable Securities</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has adopted Statement of Financial Accounting Standards
(&#147;SFAS&#148;) No.&nbsp;115, &#147;Accounting for Certain Investments in Debt and Equity
Securities.&#148; Under Statement No.&nbsp;115, debt and marketable equity securities
are required to be classified in one of three categories: trading,
available-for-sale, or held to maturity. The Company&#146;s equity securities
qualify under the provisions of Statement No.&nbsp;115 as available-for-sale. Such
securities are recorded at fair value, and unrealized holding gains and losses,
net of the related tax effect, are reflected in Stockholders&#146; Equity as a
separate component of comprehensive income. A decline in the market value of
an available-for-sale security below cost that is deemed other than temporary
is charged to earnings and results in the establishment of a new cost basis for
the security. Realized gains and losses are determined on the specific
identification method and are reflected in income.
<P align="center">46
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="left"><B>Great Lakes</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As described in Note 1, the Company contributed all of its Appalachia oil
and gas properties and gas gathering and transportation systems to Great Lakes
in September&nbsp;1999. Great Lakes&#146; reserves include proved
reserves of approximately 440 Bcfe as of December&nbsp;31, 1999, of which 84% is
natural gas, 4,700 miles of gas gathering and transportation lines and a
leasehold position of nearly one million gross acres. The joint venture owns
interest in over 1,400 proved drilling locations within existing fields and has
a reserve life index of 17.8&nbsp;years. The Company consolidates its pro rata
interest in the joint venture&#146;s assets and liabilities based upon its 50%
ownership in Great Lakes.

<P align="left"><B>Independent Producer Finance</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through IPF, Range acquires dollar denominated term overriding royalty
interests in oil and gas properties owned by independent oil and gas producers.
The Company accounts for the acquired term overriding royalty interests as
receivables because the funds advanced to a producer for these interests are
repaid from an agreed upon share of cash proceeds from the sale of production
until the amount advanced plus a specified rate of return is paid. Only
the rate of return portion of payments received from a producer is recognized as IPF
income on the statement of income. The remaining cash receipts are recorded as
a reduction in receivables on the balance sheet and as a return of capital on
the statement of cash flows. The portion of the term overriding royalty
interests classified as a current asset are those expected to be received as
repayments over the next twelve month period. Periodically, the Company
performs a review for possible uncollectible accounts receivable and provides
for unrecoverable amounts in its allowance for uncollectible receivables. At
December&nbsp;31, 1999 the Company&#146;s allowance for uncollectible receivables totaled
$17.3&nbsp;million. During 1999, IPF expenses were comprised of $1.5&nbsp;million of
general and administrative expenses and $4.3&nbsp;million of interest expense.
During 1998, IPF expenses were comprised of $.5&nbsp;million general and
administrative expenses, $1.6&nbsp;million of interest expense and a $5.9&nbsp;million
allowance against its portfolio of receivables.

<P align="left"><B>Oil and Gas Properties</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company follows the successful efforts method of accounting for oil
and gas properties. Exploratory costs are capitalized pending determination of
whether the well has found proved reserves. Exploratory costs which result in
the discovery of proved reserves and the cost of development wells are
capitalized. In the absence of a determination as to whether the reserves
found from an exploratory well can be classified as proved, the costs of
drilling such an exploratory well are not carried as an asset for more than one
year following the completion of drilling. Geological and geophysical costs,
delay rentals and costs to drill unsuccessful exploratory wells are expensed.
Depletion is provided on the unit-of-production method. Oil is converted to
Mcfe at the rate of 6 Mcf per barrel. The depletion rates per Mcfe were $1.03,
$.89 and $1.04 in 1997, 1998 and 1999, respectively. Approximately $111.2
million, $75.9&nbsp;million and $61.8&nbsp;million of oil and gas properties were
unproved as of December&nbsp;31, 1997, 1998 and 1999, respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has adopted SFAS No.&nbsp;121 &#147;Accounting for the Impairment of
Long-Lived Assets&#148;, which establishes accounting standards for the impairment
of long-lived assets, certain identifiable intangibles and goodwill. SFAS No.
121 requires a review for impairment whenever circumstances indicate that the
carrying amount of an asset may not be recoverable. In performing the review
for recoverability during 1997, 1998 and 1999, the Company recorded provisions
for impairment of $58.7&nbsp;million, $196.8&nbsp;million and $6.1&nbsp;million respectively,
which reduced the carrying value of certain oil and gas properties to what the
Company estimates to have been their fair value at that time. The provisions
for impairment on the oil and gas properties were due to reserve revisions as a
result of drilling results and declines in oil and gas prices in 1998 and 1999
and due to declines in oil and gas prices in 1997. The proved impairment was
estimated determined based on the difference between the carrying amount of the
assets and the present value of the future cash flows from proved properties
discounted at 10%. Impairment is recognized only if the carrying amount of a
property is greater than its expected undiscounted future cash flows. It is
reasonably possible that a change in reserve or price estimates could
<P align="center">47
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P>occur in
the near term and adversely impact management&#146;s estimate of future cash flows
and consequently the carrying value of the properties. The following are the
proved properties impaired during 1998 (in thousands):

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="72%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="11%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="11%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Impairment</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Property</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Sonora properties</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">65,712</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Permian properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,018</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">West Texas properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,506</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">West Delta</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,117</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Michigan properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,644</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">East Texas properties</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,323</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Matagorda Island</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,643</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Mobile Bay</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,735</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">East &#38; West Cameron</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,905</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">147,603</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unproved properties are assessed periodically to determine whether there
has been a decline in value. If such decline is indicated, a loss is
recognized. The Company compares the carrying value of its unproved properties
to the present value of the future cash flows of unproved properties discounted
at 10% or considers such other information the Company believes is relevant in
evaluating the properties&#146; fair value. Such other information may include the
Company&#146;s geological assessment of the area, other acreage purchases in the
area, or the properties&#146; uniqueness. The present value of future cash flows
from such properties has been adjusted for the Company&#146;s assessment of risk
related to the unproved properties. In assessing the risk associated with
unproved properties, the Company considers the recoverability of unproved
reserves that have been classified as probable and possible reserves. Probable
reserves are reserves not reasonably certain or proved, yet are &#147;more likely to
be recovered than not.&#148; Possible reserves are reasonably possible but &#147;less
likely to be recovered than not.&#148; The following are the unproved properties
impaired during 1998 (in thousands):

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="78%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Impairment</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Property</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Sonora unproved acreage</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">20,089</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Offshore unproved acreage</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,177</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">South Texas unproved acreage</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,922</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">49,188</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Of the total impairment of
$196.8&nbsp;million, 55% was due to downward reserve
revisions due to poor performance and drilling results and 45% was due to the
decline in oil and gas prices. The impairment of oil and gas properties
recorded in 1998 was based on estimates of future cash flows for each property
in the two categories evaluated for impairment: proved properties and unproved
properties. The impairment evaluation for proved properties utilized only
proved reserves and the impairment evaluation for unproved properties utilized
only unproved reserves. Future cash flows include revenues from anticipated
oil and natural gas production, severance taxes, direct operating costs and
capitalized costs.


<P align="center">48
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<P>The following is a table
of index prices used in the calculation of the revenues estimated from oil and
natural gas production over the anticipated life of the properties. These
prices were then adjusted for the effect of the Company&#146;s production subject to
existing sales contracts, and are not necessarily indicative of actual prices
received by the Company at the dates of the impairment charges.


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="15%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="20%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="21%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="16%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="16%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Year</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Oil prices</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gas prices</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">1999</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right" NOWRAP><FONT size="2">12.62&#150;13.25</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right" NOWRAP><FONT size="2">1.94-2.25</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2000</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">14.50 &#150; 16.00</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.23 - 2.30</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2001</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">15.60 &#150; 16.50</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.30 - 2.37</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2002</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">16.44 &#150; 17.10</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.35 - 2.44</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2003</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">17.00 &#150; 17.61</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.40 - 2.51</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2004</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">17.50 &#150; 18.14</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.45 - 2.59</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2005</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">17.90 &#150; 18.69</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.50 - 2.67</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2006</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">18.35 &#150; 19.25</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.58 - 2.75</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2007</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">18.81 &#150; 19.82</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.63 - 2.83</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2008</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">19.28 &#150; 20.42</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.69 - 2.91</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD ALIGN="CENTER"><FONT size="2">2009</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">19.76 &#150; 21.03</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" NOWRAP><FONT size="2">2.75 - 3.00</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 1999, the Company recorded a $6.1&nbsp;million impairment of unproved acreage
in the Gulf of Mexico, due to further evaluations based on updated
production and technical data indicating a reduction in the number of
economic drilling locations. The amount of
impairment was calculated by determining fair value at December&nbsp;31, 1999 using
management&#146;s best estimate of discounted future net cash flows,
as described above.

<P align="left"><B>Transportation, Processing and Field Assets</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s gas gathering systems and gas processing plant are in
proximity to its principal gas properties. Depreciation is calculated on the
straight-line method based on estimated useful lives ranging from four to
fifteen years. In September&nbsp;1999, the Company decided to sell its gas
processing plant and certain related assets.<BR>
See Note 5 &#151; Assets Held For Sale.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company receives fees for providing field related services. These
fees are recognized as earned. Depreciation is calculated on the straight-line
method based on estimated useful lives ranging from one to five years, except
buildings which are being depreciated over seven to twenty-five year periods.

<P align="left"><B>Security Issuance Costs</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses associated with the issuance of the 6% Convertible Subordinated
Debentures due 2007, the 8.75% Senior Subordinated Notes due 2007 and the 5 3/4%
Trust Convertible Preferred Securities and the Company&#146;s
recourse and non-recourse debt are
included in Other Assets on the accompanying balance sheets and are being
amortized on the interest method over the term of the securities.

<P align="left"><B>Gas Imbalances</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company uses the sales method to account for gas imbalances. Under
the sales method, revenue is recognized based on cash received rather than the
proportionate share of gas produced. Gas imbalances at year end 1997, 1998 and
1999 were not material.

<P align="left"><B>Comprehensive Income</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has adopted SFAS No.&nbsp;130 &#147;Reporting Comprehensive Income&#148;
which requires disclosure of comprehensive income and its components.
Comprehensive income is defined as changes in stockholders&#146; equity from
nonowner sources and, for the Company, includes net income and changes in the
fair value of marketable securities. The following is a calculation of the
Company&#146;s comprehensive income for the years ended December&nbsp;31, 1997, 1998 and
1999.

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="45%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2">Net income (loss)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(23,332</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(175,150</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(7,793</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Add: Change in unrealized gain/(loss)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Gross</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(322</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(78</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(299</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Tax effect</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">109</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Less: Realized gain/(loss)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Gross</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,473</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(66</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(474</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Tax effect</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">494</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Comprehensive income (loss)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(24,524</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(175,260</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(8,566</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P align="center">49
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<P align="left"><B>Use of Estimates</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

<P align="left"><B>Nature of Business</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company operates in an environment with many financial and operating
risks, including, but not limited to, the ability to acquire additional
economically recoverable oil and gas reserves, the inherent risks of the search
for, development of and production of oil and gas, the ability to sell oil and
gas at prices which will provide attractive rates of return, and the highly
competitive nature of the industry and worldwide economic conditions. The
Company&#146;s ability to expand its reserve base and diversify its operations is
also dependent upon obtaining the necessary capital through operating cash
flow, borrowings or the issuance of additional equity.

<P align="left"><B>Recent Accounting Pronouncements</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards (&#147;SFAS&#148;) No.&nbsp;133, Accounting for Derivative Instruments
and Hedging Activities, which is effective for fiscal years beginning after
June&nbsp;15, 2000.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SFAS No.&nbsp;133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It also requires that an entity
recognize all derivatives as either assets or liabilities on the balance sheet
and measure those items at fair value. If certain conditions are met, a
derivative may be specifically designated as (a)&nbsp;a hedge of the exposure to
change in the fair value of a recognized asset or liability or an unrecognized
firm commitment, (b)&nbsp;a hedge of the exposure to variable cash flows of a
forecasted transaction or (c)&nbsp;a hedge of the foreign currency exposure of a net
investment in a foreign operation, an unrecognized firm commitment, an
available-for-sale security, or a foreign-currency-denominated forecasted
transaction. The Company plans to adopt SFAS No.&nbsp;133 during the first quarter
of the year ended December&nbsp;31, 2001 and is currently evaluating the effects of
this pronouncement.

<P align="left"><B>Reclassifications</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain reclassifications have been made to prior periods presentation to
conform with current period classifications.

<!-- link2 "<B>(3)&nbsp;ACQUISITIONS</B>" -->
<DIV align="left"><A NAME="030"></A></DIV>
<P align="left"><B>(3)&nbsp;ACQUISITIONS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All acquisitions have been accounted for as purchases. The purchase
prices were allocated to the assets acquired based on the estimated fair value
of such assets and liabilities at the respective acquisition dates. The
acquisitions were funded by working capital, advances under a revolving credit
facility and the issuance of debt and equity securities.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March&nbsp;1998, oil and gas properties in the Powell Ranch Field in West
Texas (the &#147;Powell Ranch Properties&#148;) were acquired for a purchase price of $60
million, comprised of $54.6&nbsp;million in cash and $5.4&nbsp;million of Common Stock.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As described in Note 1, the Company completed the Merger for a purchase
price of $161.6&nbsp;million, comprised of $50.5&nbsp;million in cash and $111.1&nbsp;million
of Common Stock. Domain&#146;s principal assets included oil and gas operations
primarily onshore in the Gulf Coast and in the Gulf of Mexico, as well as, IPF.

<P align="center">50
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the above mentioned acquisitions, the Company purchased
various other properties for consideration of $2.7&nbsp;million and $0.8&nbsp;million
during the years ended December&nbsp;31, 1998 and 1999, respectively.

<P align="left"><B>Unaudited Pro Forma Financial Information</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents unaudited pro forma operating results as if
certain transactions had occurred at the beginning of each period presented.
The pro forma operating results include the acquisition of the Powell Ranch
properties, the Domain merger and the Great Lakes transaction.

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="62%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>Year ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Revenues</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">175,313</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">194,615</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Net income (loss)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(170,064</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(5,602</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share &#151; basic</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4.89</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.21</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share &#151; dilutive</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4.89</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(0.21</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Total assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">822,101</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">752,368</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Stockholders&#146; equity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">133,220</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">127,171</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The pro forma operating results have been prepared for comparative
purposes only. They do not purport to present actual operating results that
would have been achieved had the acquisitions and financings been made at the
beginning of each period presented or to necessarily be indicative of future
results of operations.

<!-- link2 "<B>(4)&nbsp;IPF RECEIVABLES</B>" -->
<DIV align="left"><A NAME="031"></A></DIV>
<P align="left"><B>(4)&nbsp;IPF RECEIVABLES</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 1998 and 1999, IPF had net receivables of $77.2&nbsp;million
and $65.4&nbsp;million, respectively. The receivables result from the Company&#146;s
purchase of production payments in the form of term overriding royalty
interests in exchange for an agreed upon share of revenues from identified
properties until the amount invested and a specified rate of return on
investment is paid in full. IPF&#146;s overriding royalty interest constitutes a
property interest that serves as security for the receivables. The Company has
estimated that $12.5&nbsp;million of receivables at December&nbsp;31, 1999 will be repaid
in the next twelve months and has classified such receivables as current
assets. The net outstanding receivables include an allowance for uncollectible
receivables of $14.0&nbsp;million and $17.3&nbsp;million at December&nbsp;31, 1998 and 1999,
respectively.

<!-- link2 "<B>(5)&nbsp;ASSETS HELD FOR SALE</B>" -->
<DIV align="left"><A NAME="032"></A></DIV>
<P align="left"><B>(5)&nbsp;ASSETS HELD FOR SALE</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 1999, assets held for sale consisted of the Company&#146;s gas
processing plant and associated assets located in the Permian Basin. In
connection with the 1999 plan of disposal, the Company determined that the
carrying value of the gas processing plant exceeded its fair value.
Accordingly, an impairment loss of $21.0&nbsp;million representing the excess of the
carrying value over the fair value was recognized in 1999.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value was determined by reference to the present value of the
estimated future cash inflows of the gas processing plant. The impairment
estimate on the gas processing plant recorded in the third quarter 1999 was
based on estimates of future cash flows for the property. Future cash flows
include revenues from residue gas, plant liquids and by-products derived from
both equity and third party proved natural gas reserves, which are estimated to
pass through the plant, direct operating costs and capitalized costs. The
Company used estimated future gas prices by referencing ten year future strip
prices in the calculation of the plant revenues estimated over the anticipated
life of the property. These prices were then adjusted for the effect of the
estimated throughput production, subject to existing sales contracts, and are
not necessarily indicative of actual prices received by the Company at the date
of the impairment charge.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating costs and capital costs were estimated based on the
Company&#146;s historical operating experience. These costs and expenses were
adjusted for changes in variable costs attributable to changes in


<P align="center">51
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<P>estimated
throughput volumes. The impairment estimate was determined based on the
difference between the carrying value of the plant and the present value of
future cash flows discounted at 10%. It is reasonably possible that a change
in reserve or price estimates could occur in the near term and adversely impact
management&#146;s estimate of future cash flows and consequently the carrying value
of property.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 1998, assets held for sale primarily consisted of oil and
gas properties located in South Texas and in the Gulf of Mexico. The Company
entered into agreements with an independent firm to assist it in selling these
assets. The assets were recorded at the lower of cost or estimated market
value of the properties as assets held for sale in the current asset section of
the Consolidated Balance Sheets. Of the $51.8&nbsp;million of assets held for sale
at December&nbsp;31, 1998, $10.0&nbsp;million of properties were sold for $9.2&nbsp;million,
with the remainder transferred back to oil and gas properties with depletion
reinstated.

<!-- link2 "<B>(6)&nbsp;INDEBTEDNESS</B>" -->
<DIV align="left"><A NAME="033"></A></DIV>
<P align="left"><B>(6)&nbsp;INDEBTEDNESS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company had the following debt outstanding as of the dates shown.
Interest rates at December&nbsp;31, 1999 are shown parenthetically (in thousands):

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="57%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="left" nowrap><FONT size="2"><B>Senior debt</B></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Credit Facility (8.7%)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">365,175</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">140,000</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Other (6.2%)</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,887</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">367,062</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">140,014</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap colspan="3"><FONT size="2">Less amounts due within one year</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,187</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,014</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Senior debt, net</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">311,875</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">135,000</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2" align="left"><FONT size="2"><B>Non-recourse debt</B></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Great Lakes (8.2%)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">95,020</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">IPF (8.7%)</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,100</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">47,500</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Non-recourse debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">60,100</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">142,520</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2" align="left"><FONT size="2"><B>Subordinated notes</B></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">8.75% Senior Subordinated Notes due 2007</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">125,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">125,000</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">6% Convertible Subordinated Debentures due 2007</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">51,360</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Subordinated notes</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">180,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">176,360</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company maintains a $225&nbsp;million revolving bank facility (the &#147;Credit
Facility&#148;). The Credit Facility provides for a borrowing base, which is
subject to semi-annual redeterminations. The Credit Facility is secured by the
Company&#146;s oil and gas properties. On March&nbsp;13, 2000, the borrowing base on the
Credit Facility was $160&nbsp;million of which $16&nbsp;million was available. The
borrowing base is subject to semi-annual redetermination and certain other
redeterminations based upon a variety of factors, including the discounted
present value of estimated future net cash flow from oil and gas production.
At the Company&#146;s option, loans may be prepaid and the revolving credit
commitment may be reduced, in whole or in part at anytime in certain minimum
amounts. The next redetermination occurs on April&nbsp;1, 2000. If amounts
outstanding at April&nbsp;1, 2000 exceed the redetermined borrowing base, one-half
of the excess, if any, must be repaid within 90&nbsp;days and the remaining excess,
if any, must be repaid within 180&nbsp;days. Any borrowing base in excess of $135
million requires the approval of all lenders. There can be no assurance that a
redetermined borrowing base will be in excess of $135&nbsp;million. Therefore, the
Company has classified as current the difference between the amount outstanding
on December&nbsp;31, 1999, and $135&nbsp;million. A similar appropriate amount will be
included in current portion of long term debt at March&nbsp;31, 2000, unless an
amended or replacement credit facility is entered into. Interest is payable
quarterly or as

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<P>LIBOR notes mature and the loan matures in February&nbsp;2003. Upon
selling the Sterling gas plant, the Company currently plans to use all the net
proceeds to reduce the balance outstanding under the Credit Facility. The
Credit Facility provides that the borrowing base will be reduced by 67% of the
net proceeds of the sale of the Sterling gas plant. A commitment fee is paid
quarterly on the undrawn balance at a rate of 0.25% to 0.50% depending upon the
percentage of the borrowing base drawn. The interest rate on the Credit
Facility is LIBOR plus between 1.50% and 2.25%, depending upon amounts
outstanding. The weighted average interest rates on these borrowings were 6.7%
and 7.1% for the years ended December&nbsp;31, 1998 and 1999, respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company pro rata consolidates 50% of amounts outstanding under the
$275&nbsp;million revolving bank facility (the &#147;Great Lakes Facility&#148;) through its
participation in Great Lakes. The Great Lakes Facility is non-recourse to
Range. The Great Lakes Facility provides for a borrowing base, which is
subject to semi-annual redeterminations. The Great Lakes Facility is secured
by the Great Lakes oil and gas properties. On March&nbsp;13, 2000, the borrowing
base on the Great Lakes Facility was $191&nbsp;million of which $9&nbsp;million was
available. The borrowing base reduces to $190&nbsp;million at April&nbsp;1, 2000. The
borrowing base is subject to a semi-annual borrowing review on April&nbsp;1, 2000.
The redetermined borrowing base on April&nbsp;1, 2000 requires the approval of all
lenders. Interest is payable quarterly or as LIBOR notes mature and the loan
matures in September&nbsp;2002. The interest rate on the Great Lakes Facility is
LIBOR plus between 1.50% and 2.00%, depending upon amounts outstanding. A
commitment fee is paid quarterly on the undrawn balance at a rate of 0.25% to
0.50% depending upon the percentage of the borrowing base drawn. The weighted
interest rate on this borrowing was 7.68% for the year ended December&nbsp;31, 1999.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IPF has a $100&nbsp;million revolving credit facility (the &#147;IPF Facility&#148;)
through which it finances its activities. The IPF Facility is non-recourse to
Range. The IPF Facility matures in December&nbsp;2002 at which time all amounts
owed thereunder are due and payable. The IPF Facility is secured by
substantially all of IPF&#146;s assets. The borrowing base under the IPF Facility
is subject to semi-annual redeterminations. On
March&nbsp;13, 2000, the borrowing base on the IPF Facility was $56&nbsp;million of which
$13.6&nbsp;million was available. The IPF Facility bears interest at prime rate or
interest at LIBOR plus between 1.75% to 2.25% depending upon the total amounts
outstanding. Interest expense on the IPF Facility is included in IPF expenses
on the Consolidated Statements of Operations and amounted to $1.5&nbsp;million and
$4.3&nbsp;million for the years ended December&nbsp;31, 1998 and 1999, respectively. A
commitment fee is paid quarterly on the average undrawn balance at a rate of
0.375% to 0.50%. The weighted average interest rate on these borrowings was
7.79% and 6.99% for the years ended December&nbsp;31, 1998 and 1999, respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 8.75% Senior Subordinated Notes due 2007 (the &#147;8.75% Notes&#148;) are not
redeemable prior to January&nbsp;15, 2002. Thereafter, the 8.75% Notes are subject
to redemption at the option of the Company, in whole or in part, at redemption
prices beginning at 104.375% of the principal amount and declining to 100% in
2005. The 8.75% Notes are unsecured general obligations of the Company and are
subordinated to all senior debt (as defined) including borrowings under the
Credit Facility. The 8.75% Notes are guaranteed on a senior subordinated basis
by the Company&#146;s subsidiaries.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 6% Convertible Subordinated Debentures Due 2007 (the &#147;Debentures&#148;) are
convertible into shares of Common Stock at the option of the holder at any time
prior to maturity. The Debentures are convertible at a conversion price of
$19.25 per share, subject to adjustment in certain events. Interest is payable
semi-annually in January and June. The Debentures mature in 2007 and are
redeemable beginning on February&nbsp;1, 2000 at a price of 104% of the face amount
and declining 0.5% annually though 2007. The Debentures are unsecured general
obligations and are subordinated to all senior indebtedness (as defined), which
includes the 8.75% Notes and the Credit Facility. During 1999, $3.6&nbsp;million of
Debentures were retired at the election of the holders in exchange for
approximately 496,000 shares of Common Stock. An extraordinary gain of $1.2
million was recorded as the Debentures were retired at a discount to their face
value.

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The debt agreements contain various covenants relating to net worth,
working capital maintenance and financial ratio requirements. The Company is
in compliance with these various covenants as of December&nbsp;31, 1999. Interest
paid on senior debt and subordinated notes during the year ended December&nbsp;31, 1998 and 1999 totaled
$39.6&nbsp;million and $47.1&nbsp;million, respectively. The Company does not
capitalized any interest expense.

<!-- link2 "<B>(7)&nbsp;FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES:</B>" -->
<DIV align="left"><A NAME="034"></A></DIV>
<P align="left"><B>(7)&nbsp;FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES:</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s financial instruments include cash and equivalents, accounts
receivable, accounts payable, debt obligations, commodity and interest rate
futures, options, and swaps. The book value of cash and equivalents, accounts
receivable and payable and short term debt are considered to be representative
of fair value because of the short maturity of these instruments. The Company
believes that the carrying value of its borrowings under the Credit and IPF
Facilities (collectively &#147;the Bank Facilities&#148;) approximate their fair value as
they bear interest at rates indexed to LIBOR. In connection with the Merger,
the IPF receivables were adjusted to what the Company estimates to have been
their fair value at that time. The Company&#146;s receivables are concentrated in
the oil and gas industry. The Company does not view such a concentration as an
unusual credit risk. Excluding IPF&#146;s valuation allowances, the Company had
recorded an allowance for doubtful accounts of $0.8&nbsp;million and $1.5&nbsp;million at
December&nbsp;31, 1998 and 1999, respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A portion of the Company&#146;s crude oil and natural gas sales are
periodically hedged against price risks through the use of futures, option or
swap contracts. The gains and losses on these instruments are included in the
valuation of the production being hedged in the contract month and are included
as an adjustment to oil and gas revenue. The Company also manages interest
rate risk on its credit facility through the use of interest rate swap
agreements. Gains and losses on interest rate swap agreements are included as
an adjustment to interest expense.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the book value and estimated fair values of
the Company&#146;s financial instruments:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="32%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="center" colspan="15"><FONT size="2"><B>(In thousands)</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Book</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Fair</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Book</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Fair</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Value</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Value</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Value</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Value</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Cash and equivalents</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">10,954</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">10,954</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">12,937</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">12,937</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Marketable securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,966</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,258</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,152</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,145</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(607,162</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(607,162</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(458,894</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(458,894</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Commodity swaps</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">339</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Interest rate swaps</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(361</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">704</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 1999, the Company had open hedges contracts for natural
gas of 24.8 Bcf and 0.8&nbsp;million barrels of oil. The swap contracts are at
average prices ranging from $2.00 to $3.17 per Mcf and the oil contracts range
from $19.01 to $25.00 per Bbl. While these transactions have no carrying
value, their fair value, represented by the estimated amount that would be
required to terminate the contracts, was a net gain of approximately $0.3
million at December&nbsp;31, 1999. These contracts expire monthly through December
2000. The gains or losses on the Company&#146;s hedging transactions are determined
as the difference between the contract price and the reference price, generally
closing prices on the NYMEX. The resulting transaction gains and losses are
determined monthly and are included in oil and gas revenues in the period the
hedged production is sold. Net gains or (losses)&nbsp;relating to
these derivatives for the years ended December&nbsp;31, 1997, 1998 and 1999
approximated $(.9) million, $3.1&nbsp;million and $(10.6) million, respectively.

<P align="center">54
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest rate swap agreements, which are used by the Company in the
management of interest rate exposure, are accounted for on the accrual basis.
Income and expense resulting from these agreements are recorded in the same
category as interest expense arising from the related liability. Amounts to be
paid or received under interest rate swap agreements are recognized as an
adjustment to expense in the periods in which they accrue. At December&nbsp;31,
1999, the Company had $80&nbsp;million of borrowings subject to four interest rate
swap agreements at rates of 5.35%, 4.82%, 5.64% and 5.59% through January&nbsp;2000,
September&nbsp;2000, October&nbsp;2000 and October&nbsp;2000, respectively. The interest rate
swaps may be extended at the counterparties&#146; option for two years. The
interest rate swap in effect through January&nbsp;2000 was not extended at the
option of the counterparty. The agreements require that the Company pay the
counterparty interest at the above fixed swap rates and requires the
counterparty to pay the Company interest at the 30-day LIBOR rate. The closing
30-day LIBOR rate on December&nbsp;31, 1999 was 6.49%. The fair value of the
interest rate swap agreements at December&nbsp;31, 1999, is based upon current
quotes for equivalent agreements. As discussed in Note 6, the Company&#146;s Bank
Facilities are based on LIBOR plus Applicable Margin (as defined).

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These hedging activities are conducted with major financial or commodities
trading institutions which management believes entail acceptable levels of
market and credit risks. At times such risks may be concentrated with certain
counterparties or groups of counterparties. The credit worthiness of
counterparties is subject to continuing review and full performance is
anticipated.

<!-- link2 "<B>(8)&nbsp;COMMITMENTS AND CONTINGENCIES</B>" -->
<DIV align="left"><A NAME="035"></A></DIV>
<P align="left"><B>(8)&nbsp;COMMITMENTS AND CONTINGENCIES</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is involved in various legal actions and claims arising in the
ordinary course of business. In the opinion of management, such litigation and
claims are likely to be resolved without material adverse effect on the
Company&#146;s financial position or results of operations.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May&nbsp;1998, a Domain stockholder filed an action in the Delaware Court of
Chancery, alleging that the terms of the Merger were unfair to a purported
class of Domain stockholders and that the defendants (except Range) violated
their legal duties to the class in connection with the Merger. Range is
alleged to have aided and abetted the breaches of fiduciary duty allegedly
committed by the other defendants. The action sought an injunction enjoining
the Merger as well as a claim for money damages. In September&nbsp;1998, the
parties executed a Memorandum of Understanding (the &#147;MOU&#148;), which represents a
settlement in principle of the litigation. Under the terms of the MOU,
appraisal rights (subject to certain conditions) were offered to all holders of
Domain common stock (excluding the defendants and their affiliates). Domain
also agreed to pay any court-awarded attorneys&#146; fees and expenses of the
plaintiffs&#146; counsel in an amount not to exceed $.3&nbsp;million. The settlement in
principle is subject to court approval and certain other conditions that have
not been satisfied.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company leases certain office space and equipment under cancelable and
non-cancelable leases, most of which expire within 10&nbsp;years and may be renewed
by the Company. Rent expense under such arrangements totaled $0.6&nbsp;million,
$0.6&nbsp;million and $1.1&nbsp;million in 1997, 1998 and 1999, respectively. Future
minimum rental commitments under non-cancelable leases are as follows (in
thousands):

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="74%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="10%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="10%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">2000</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">756</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">2001</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">695</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">2002</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">553</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">2003</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">195</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">2004</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">65</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">2005 and thereafter</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,264</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">55
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<!-- link2 "<B>(9)&nbsp;EQUITY AND TRUST SECURITIES</B>" -->
<DIV align="left"><A NAME="036"></A></DIV>
<P align="left"><B>(9)&nbsp;EQUITY AND TRUST SECURITIES</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In October&nbsp;1997, the Company, through a newly-formed affiliate Lomak
Financing Trust (the &#147;Trust&#148;) completed the issuance of $120&nbsp;million of 5 3/4%
trust convertible preferred securities (the &#147;Convertible Preferred
Securities&#148;). The Trust issued 2,400,000 shares of the Convertible Preferred
Securities at $50 per share. Each Convertible Preferred Security is
convertible at the holder&#146;s option into 2.1277 shares of Common Stock,
representing a conversion price of $23.50 per share. During 1999, $2.3&nbsp;million
of Convertible Preferred Securities were exchanged at the election of the
holders for approximately 202,000 shares of Common Stock. An extraordinary gain
of $1.2&nbsp;million was recorded as the Convertible Preferred Securities were
retired at a discount to their face value.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trust invested the $120&nbsp;million of proceeds in 5 3/4% convertible junior
subordinated debentures issued by Range (the &#147;Junior Debentures&#148;). In turn,
Range used the net proceeds from the issuance of the Junior Convertible
Debentures to repay a portion of its Credit Facility. The sole assets of the
Trust are the Junior Debentures. The Junior Debentures and the related
Convertible Preferred Securities mature on November&nbsp;1, 2027. Range and the
Trust may redeem the Junior Debentures and the Convertible Preferred
Securities, respectively, in whole or in part, on or after November&nbsp;4, 2000.
For the first twelve months thereafter, redemptions may be made at 104.025% of
the principal amount. This premium declines proportionally every twelve months
until November&nbsp;1, 2007, when the redemption price becomes fixed at 100% of the
principal amount. If the Company redeems any Junior Debentures prior to the
scheduled maturity date, the Trust must redeem Convertible Preferred Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Junior Debentures so redeemed.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has guaranteed the payments of distributions and other
payments on the Convertible Preferred Securities only if and to the extent that
the Trust has funds available. Such guarantee, when taken together with
Range&#146;s obligations under the Junior Debentures and related indenture and
declaration of trust, provide a full and unconditional guarantee of amounts due
on the Convertible Preferred Securities.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company owns all the common securities of the Trust. As such, the
accounts of the Trust will be included in Range&#146;s consolidated financial
statements after appropriate eliminations of intercompany balances. The
distributions on the Convertible Preferred Securities will be recorded as a
charge to interest expense on Range&#146;s Consolidated Statements of Operations,
and such distributions are deductible by Range for income tax purposes.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In November&nbsp;1995, the Company issued 1,150,000 shares of $2.03 convertible
exchangeable preferred stock (the &#147;$2.03 Preferred Stock&#148;) for $28.8&nbsp;million.
The $2.03 Preferred Stock is convertible into the Company&#146;s common stock at a
conversion price of $9.50 per share, subject to adjustment in certain events.
The $2.03 Preferred Stock is redeemable, at the option of the Company, at a
price of $26.25 per share beginning November&nbsp;1, 1998, declining $0.25 per share
annually through 2003. At the option of the Company, the $2.03 Preferred Stock
is exchangeable for the Company&#146;s 8-1/8% Convertible Subordinated Notes due
2005. The notes would be subject to the same redemption and conversion terms
as the $2.03 Preferred Stock.

<!-- link2 "<B>(10)&nbsp;STOCK OPTION AND PURCHASE PLAN</B>" -->
<DIV align="left"><A NAME="037"></A></DIV>
<P align="left"><B>(10)&nbsp;STOCK OPTION AND PURCHASE PLAN</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has four stock option plans, one stock incentive plan, as well
as a stock purchase plan. Two of the stock option plans were adopted as a
result of the Merger. Information with respect to these stock option plans is
summarized as follows:
<P align="center">56
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="center">
<TR valign="bottom">
<TD width="37%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>

<TD nowrap align="center" valign="bottom" colspan="7"><FONT size="2"><B>Plans
Adopted Via the</B></FONT></TD>
</TR>

<TR><TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" valign="bottom" colspan="7"><FONT size="2"><B>Merger</B></FONT></TD>
</tr>
<TR>
<TR valign="top">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Incentive</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Option</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Director's</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Option</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Director's</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Plan</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Plan</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Plan</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Plan</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Plan</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Outstanding at December&nbsp;31, 1998</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,042,757</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">140,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">938,976</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,340</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,141,073</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Granted</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">904,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,004,150</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Exercised</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"></TD>
<TD align="right"><FONT size="2">(70,000</FONT></TD>
<TD align="left">)</TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(374,264</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(444,264</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Expired/Cancelled</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">(380,425</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(12,000</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,445</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(393,870</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Outstanding at December&nbsp;31, 1999</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,496,482</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">168,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">563,267</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,340</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,307,089</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May&nbsp;1999, the shareholders approved the Company&#146;s 1999 Stock Incentive
Plan (the &#147;Incentive Plan&#148;) providing for the issuance of up to 1.4&nbsp;million
shares of common stock. The Incentive Plan is administered by the Compensation
Committee of the Board. All options issued under the Incentive Plan vest 25%
per year beginning one year after the grant date and expire 10&nbsp;years from date
of grant. During the year ended December&nbsp;31, 1999, 60,000 options were granted
at a price of $5.63 per share, none of which were exercisable.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Range maintains the 1989 stock option plan (&#147;Option Plan&#148;) which
authorized the grant of options of up to 3.0&nbsp;million shares of Common Stock,
however, no new options will be granted under this plan. Under the Option
Plan, incentive and non-qualified options have been issued to officers,
employees and consultants. The Option Plan is administered by the Compensation
Committee of the Board. All options issued under the Option Plan before
September&nbsp;1998 vest 30% after one year, 60% after two years and 100% after
three years and expire 5&nbsp;years from date of grant. Options issued after
September&nbsp;30, 1999 vest 25% per year beginning one year after the grant date
and expire 10&nbsp;years from date of grant. During the year ended December&nbsp;31,
1999, 70,000 options were exercised and 380,425 were cancelled or expired. At
December&nbsp;31, 1999, 1,540,796 options were exercisable at prices ranging from
$6.75 to $18.00 per share.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 1994, the stockholders approved the 1994 Outside Directors Stock Option
Plan (the &#147;Directors Plan&#148;). Only Directors who are not employees of the
Company are eligible under the Directors Plan. The Directors Plan covers a
maximum of 200,000 shares. During 1999, 40,000 options were granted at $4.81
and 12,000 were cancelled or expired. At December&nbsp;31, 1999, 92,800 options
were exercisable at prices ranging from $8.00 to $16.875 per share.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the merger, Range adopted the Second Amended and
Restated 1996 Stock Purchase and Option Plan for Key Employees of Domain Energy
Corporation and Affiliates (the &#147;Domain Option Plan&#148;) and the Domain Energy
Corporation 1997 Stock Option Plan for Nonemployee Directors (the &#147;Domain
Director Plan&#148;). Subsequent to the Merger, no new options will be granted
under the Domain Option and Director Plans and existing options are exercisable
into shares of Range Common Stock. During the year ended December&nbsp;31, 1999
options covering 356,812 shares were exercised at $0.01 per share and 17,452
shares were exercised at $3.46 per share. At December&nbsp;31, 1999, 451,562
options were currently exercisable under the Domain Option Plan at $3.46 per
share. The remaining 111,705 options have an exercise price of $0.01 per share
and are currently exercisable. At December&nbsp;31, 1999, options totaling 19,340
shares were outstanding and exercisable under the Domain Director Plan at
$11.17 per share.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;1997, the stockholders approved the 1997 Stock Purchase Plan (the
&#147;1997 Plan&#148;) which authorizes the sale of up to 900,000 shares of common stock
to officers, directors, key employees and consultants. Under the 1997 Plan,
the right to purchase shares at prices ranging from 50% to 85% of market value
may be granted. Through December&nbsp;31, 1999, no rights had been granted for less
than 75% of market value. The Company previously had stock purchase plans
which covered 833,333 shares. The previous stock purchase plans have been
terminated. The 1997 Plan is administered by the Compensation Committee of the
Board. From inception through December&nbsp;31, 1999, a total of 516,897 registered
shares had been sold through stock purchase plans, for a total consideration of
approximately $2.9&nbsp;million.
<P align="center">57
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No.&nbsp;123, &#147;Accounting for Stock Based
Compensation.&#148; Accordingly, no compensation cost has been recognized for the
stock option plans. Had compensation cost for the Corporation&#146;s stock option
plans been determined based on the fair value at the grant date for awards in
1997, 1998 and 1999 consistent with the provisions of SFAS No.&nbsp;123, the
Company&#146;s net earnings and earnings per share would have been reduced to the
pro forma amounts indicated below:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="60%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>(in thousands, except</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>per share data)</B></FONT></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Net earnings (loss) &#151; as reported</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(23,332</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(175,150</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(7,793</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share &#151; as reported</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(0.27</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share dilutive &#151; as reported</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(0.27</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Net earnings (loss) &#151; pro forma</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(24,717</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(176,569</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(8,858</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share &#151;pro forma</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(1.38</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(6.88</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(0.30</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Earnings (loss)&nbsp;per share dilutive&#151;pro forma</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(1.38</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(6.88</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(0.30</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following
weighted-average assumptions used for 1997, 1998 and 1999,
respectively: fair value of $1.15, $1.24 and $1.37 per share; dividend yields of $.10, $.12 and $.03 per share; expected volatility factors
of .46, .79 and 3.55 risk-free interest rates of 6.5%; 4.75% and 5.1%; and a
average expected life of 4 to 6&nbsp;years.

<!-- link2 "<B>(11)&nbsp;BENEFIT PLAN</B>" -->
<DIV align="left"><A NAME="038"></A></DIV>
<P align="left"><B>(11)&nbsp;BENEFIT PLAN</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company maintains a 401(K) Plan for the benefit of its employees. The
Plan permits employees to make contributions on a pre-tax salary reduction
basis. The Company makes discretionary contributions to the Plan. Company
contributions for 1997, 1998 and 1999 were $0.7&nbsp;million, $0.7&nbsp;million and $0.9
million, respectively. The contributions were made with Range common stock,
which was valued at market value on the date of the contribution.

<!-- link2 "<B>(12)&nbsp;INCOME TAXES</B>" -->
<DIV align="left"><A NAME="039"></A></DIV>
<P align="left"><B>(12)&nbsp;INCOME TAXES</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal income tax provision (benefit)&nbsp;was $(11.8) million, $(54.7)
million and $0&nbsp;million for the years 1997, 1998 and 1999, respectively. The
current portion of the income tax provision for 1999 represents state income
tax currently payable. A reconciliation between the statutory federal income
tax rate and the Company&#146;s effective federal income tax rate is as follows:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="42%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="9%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Statutory tax rate</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(34</FONT></TD>
<TD nowrap><FONT size="2">)%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(34</FONT></TD>
<TD nowrap><FONT size="2">)%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(34</FONT></TD>
<TD nowrap><FONT size="2">)%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Valuation allowance</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">34</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">State income tax</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">19</FONT></TD>
<TD nowrap><FONT size="2"></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Effective tax rate</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(34</FONT></TD>
<TD nowrap><FONT size="2">)%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(24</FONT></TD>
<TD nowrap><FONT size="2">)%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">19</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Income taxes paid</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,216,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">36,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">388,000</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company follows FASB Statement No.&nbsp;109, &#147;Accounting for Income Taxes&#148;.
Under Statement 109, the liability method is used in accounting for income
taxes. Under this method, deferred tax assets and liabilities are determined
based on differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.
<P align="center">58
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant components of the Company&#146;s deferred tax liabilities and
assets are as follows (in thousands):

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="63%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Deferred tax liabilities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Depreciation</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">30,232</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">25,406</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Deferred tax assets:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Net operating loss carryforward</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">51,810</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">47,433</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Percentage depletion carryforward</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,753</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,126</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">AMT credits and other</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">685</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">660</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total deferred tax assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,248</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">51,219</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Valuation allowance for deferred tax assets</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(25,016</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(25,813</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net deferred tax assets</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">30,232</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">25,406</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net deferred tax liabilities</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Utilization of the deferred tax asset of $25.8&nbsp;million is dependent on
future taxable profits being in excess of profits arising from existing taxable
temporary differences. The Company has established a $25.8&nbsp;million valuation
allowance and has written down to zero its net deferred tax assets at December
31, 1999. Management believes sufficient uncertainty exists regarding its net
deferred tax assets that a valuation allowance is required. Upon future
realization of the deferred tax asset, $25.8&nbsp;million of the valuation allowance
will reduce the Company&#146;s future income tax expense.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has entered into several business combinations accounted for
as purchases. In connection with these transactions, deferred tax assets and
liabilities of $7.7&nbsp;million and $38.3&nbsp;million respectively, were recorded. In
1998 the Company acquired Domain Energy Corporation in a taxable business
combination accounted for as a purchase. A net deferred tax liability of $29
million was recorded in the transaction.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the Company&#146;s issuance of equity and convertible debt
securities, it experienced a change in control during 1988 as defined by
Section&nbsp;382 of the Internal Revenue Code. The change in control and the Merger
have placed limitations to the utilization of net operating loss carryovers.
At December&nbsp;31, 1999, the Company had available for federal income tax
reporting purposes net operating loss carryovers of approximately $127&nbsp;million
which are subject to annual limitations as to their utilization and otherwise
expire between 2000 and 2014, if unused. The Company has alternative minimum
tax net operating loss carryovers of $113&nbsp;million which are subject to annual
limitations as to their utilization and otherwise expire from 2000 to 2014 if
unused. The Company has statutory depletion carryover of approximately $4.9
million and an alternative minimum tax credit carryover of approximately $0.7
million. The statutory depletion carryover and alternative minimum tax credit
carryover are not subject to limitation or expiration.

<!-- link2 "<B>(13)&nbsp;BUSINESS RESTRUCTURING COSTS</B>" -->
<DIV align="left"><A NAME="040"></A></DIV>
<P align="left"><B>(13)&nbsp;BUSINESS RESTRUCTURING COSTS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the fourth quarter of 1998, the Company initiated a restructuring plan
to reduce costs and improve operating efficiencies. The restructuring plan
included actions by the Company to close its Midland, Texas field office,
eliminate certain geological and exploration positions, cancel certain
exploration and drilling obligations, as well as consolidate certain
administrative functions at the remaining locations. In connection with the
restructuring plan, 54 employees were terminated. The terminated
employees were comprised as follows: 33 in operations; 11 in exploration; 3 in
Midland office; 3 in gas marketing; 2 in IPF; and 2 in investor relations.
These employees were associated with operations that

<P align="center">59
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<P>were consolidated or
eliminated in response to the depressed energy price environment. Estimated
employee termination costs of $2.1&nbsp;million were accrued in 1998. Of the
total number of employees affected, 42 were terminated in 1998.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the costs of terminating employees, the principal costs of
the restructuring plan include the writedown of the carrying value of assets
impaired due to the restructuring and lease and contract termination costs.
The charge included $.6&nbsp;million for estimated costs to exit lease and other
contractual commitments and an additional $.4&nbsp;million relating to costs
associated with the closing of the Midland, Texas office, which was deemed to
be uneconomical. The $.4&nbsp;million of associated costs consisted of $.1&nbsp;million
of costs to exit the office lease and $.3&nbsp;million of costs to exit two
exploration agreements. The Midland office was responsible primarily for the
operation of a portion of the Company&#146;s Permian assets. The operation of these
assets were consolidated in the Company&#146;s Fort Worth, Texas office. At
December&nbsp;31, 1998 $2.7&nbsp;million was accrued in connection with the restructuring
plan. The plan was completed during 1999.

<!-- link2 "<B>(14)&nbsp;EARNINGS PER COMMON SHARE</B>" -->
<DIV align="left"><A NAME="041"></A></DIV>
<P align="left"><B>(14)&nbsp;EARNINGS PER COMMON SHARE</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the computation of earnings per common
share and earnings per common share &#150; assuming dilution (in thousands):

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="46%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2">Numerator:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Net (loss)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(23,332</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(175,150</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(7,793</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Preferred stock dividends</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,334</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,334</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,334</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Numerator for earnings per common share</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(25,666</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(177,484</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(10,127</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Effect of dilutive securities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Preferred stock dividends</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Numerator for earnings per common
Share &#150; assuming dilution</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(25,666</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(177,484</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(10,127</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Denominator:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Denominator for earnings per common
Share &#150; weighted average shares</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,641</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26,008</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">36,933</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Effect of dilutive securities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Employee stock options</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Warrants</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Dilutive potential common shares</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Denominator for diluted earnings
per share
Adjusted weighted-average shares and
Assumed conversions</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,641</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26,008</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">36,933</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">(Loss) per common share</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(0.27</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">(Loss) per common
share &#150; assuming dilution</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(1.31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(6.82</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(0.27</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For additional disclosure regarding the Company&#146;s Debentures, and the
$2.03 Preferred Stock, see Notes 6, and 9 respectively. The Debentures were
outstanding during 1997, 1998 and 1999 but were not included in the computation
of diluted earnings per share because the stated conversion price was greater
than the average market price of common shares and, therefore, the effect would
be antidilutive. The $2.03

<P align="center">60
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<P>Preferred Stock was outstanding during 1997, 1998
and 1999 and was convertible into 3,026,316 of additional shares of common
stock. The 3,026,316 additional shares were not included in the computation of
diluted earnings per share because the conversion price was greater than the
average market price of common shares and, therefore, the effect would be
antidilutive. There were stock options outstanding during 1997, 1998 and 1999
which were exercisable, resulting in 642,720, 718,279 and 504,643 additional
shares for common stock equivalents, respectively. These additional shares
were not included in the 1997, 1998 or 1999 computations of diluted earnings
per share because the effect was antidilutive.
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to further asset
sales, the Company currently anticipates it will significantly increase its
efforts to exchange Common Stock or other equity linked securities for its
existing fixed rate securities or reduce debt and associated financing costs
through some other substantial restructuring initiative. While the Company
expects to exchange the fixed rate securities at a substantial discount to
their face value, the Company&#146;s existing common stockholders will be
materially diluted if a material portion of the fixed rate securities are
exchanged. The dilutive effect to the common stockholders will depend upon a
number of factors, the primary ones being the number of shares and the price at
which additional Common Stock is issued or the price which newly issued
securities are convertible into Common Stock.

<!-- link2 "<B>(15)&nbsp;MAJOR CUSTOMERS</B>" -->
<DIV align="left"><A NAME="042"></A></DIV>
<P align="left"><B>(15)&nbsp;MAJOR CUSTOMERS</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company markets its oil and gas production on a competitive basis.
The type of contract under which gas production is sold varies but can
generally be grouped into three categories: (a)&nbsp;life-of-the-well; (b)&nbsp;long-term
(1&nbsp;year or longer); and (c)&nbsp;short-term contracts which may have a primary term
of one year, but which are cancelable at either party&#146;s discretion in 30-120
days. Approximately 22% of the Company&#146;s gas production is currently sold
under market sensitive contracts which do not contain floor price provisions.
For the year ended December&nbsp;31, 1999, no one customer accounted for 10% or more
of the Company&#146;s total oil and gas revenues. Management believes that the loss
of any one customer would not have a material adverse effect on the operations
of the Company. Oil is sold on a basis such that the purchaser can be changed
on 30&nbsp;days notice. The price received is generally equal to a posted price set
by the major purchasers in the area. The Company sells to oil purchasers on a
basis of price and service.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under an agreement with FirstEnergy, Great
Lakes&#146; sells gas to FirstEnergy on a negotiated basis. Great Lakes may sell
gas to third parties, however such arrangements are contracted through FirstEnergy, and FirstEnergy may elect to match any such arrangements.


<!-- link2 "<B>(16)&nbsp;OIL AND GAS ACTIVITIES</B>" -->
<DIV align="left"><A NAME="043"></A></DIV>
<P align="left"><B>(16)&nbsp;OIL AND GAS ACTIVITIES</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following summarizes selected information with respect to oil and gas
producing activities:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="33%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="center" colspan="11"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2">Oil and gas properties:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Subject to depletion</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">674,067</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">859,911</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">917,107</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Unproved</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">111,156</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">75,911</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">61,812</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">785,223</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">935,822</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">978,919</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Accumulated depletion</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(161,416</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(273,723</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(383,622</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Net oil and gas properties</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">623,807</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">662,099</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">595,297</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Costs incurred:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Acquisition</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">448,822</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">286,974</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">846</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Development</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">56,430</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">71,793</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">33,808</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Exploration</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,375</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,756</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,604</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total costs incurred</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">507,627</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">368,523</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">38,258</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amount for costs incurred for acquisitions in 1999 does not reflect
$68&nbsp;million recorded as an equity interest in the Great Lakes joint venture
associated with the Company&#146;s 50% interest in the reserves

<P align="center">61


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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>



<P>contributed by
FirstEnergy upon formation of the joint venture. The Company&#146;s share of the
contributed reserves from FirstEnergy was 81.6 Bcfe.

<!-- link2 "<B>(17)&nbsp;GAIN ON SALE</B>" -->
<DIV align="left"><A NAME="044"></A></DIV>
<P align="left"><B>(17)&nbsp;GAIN ON SALE</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September&nbsp;1999, Range transferred all of its Appalachian oil and gas
properties and associated gas gathering and transportation systems to Great
Lakes in exchange for a non-controlling ownership interest. Additionally, the
Company contributed $188.3&nbsp;million of indebtedness to Great Lakes. The Great
Lakes partners have no commitment to support the operations or related
obligations of Great Lakes. In connection with the transfer, Range recognized
a gain of $39.8&nbsp;million, which was attributable to the portion of the net
assets conveyed to Great Lakes in excess of the Company&#146;s 50% ownership
interest. The gain was calculated by comparing the Company&#146;s estimate of the
fair market value of the assets and liabilities conveyed to their net book
value.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The estimated fair market value of oil and gas properties was based upon
future net cash flows from the assets discounted 10% at September&nbsp;30, 1999. The
present value of future cash flows from such properties has been adjusted for
the Company&#146;s assessment of risk related to the properties. For purposes of
determining the fair market value of oil and gas properties, risk factors
ranging from 20% to 60% were used depending on the nature of the reserve
category. The Company assumed NYMEX prices of $19.00 per barrel of oil and
$2.65 per mcf of gas for purposes of calculating future net cash flows. Prices
were escalated 2.5% annually, with oil capped at the price of $30.00 per barrel
and gas capped at the price of $5.00 per mcf. These prices were then adjusted
for the effect of the Company&#146;s production subject to existing sales contracts,
and are not necessarily indicative of actual prices received by the Company at
the dates of the impairment charges. Severance taxes, direct operating costs
and capitalized costs were estimated based on the Company&#146;s historical
operating experience. These costs and expenses were escalated at 2.5% per
year. These prices and costs were applied to production profiles developed by
the Company&#146;s engineers using estimates of proved reserves and unproved
reserves. The estimated fair market value of other assets contributed to Great
Lakes was determined by an internally generated cash flow model which was
developed to determine the future revenues and costs associated with these
activities, discounted 10% annually. These discounted cash flows were risked
individually at rates ranging between 30% and 60%.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the year ended December&nbsp;31, 1999, the Company sold various
non-strategic properties. A net loss in the amount of $1.3&nbsp;million was
recognized on the sale of these properties due to their net book value being
greater than proceeds received upon their sale.

<!-- link2 "<B>(18)&nbsp;EXTRAORDINARY ITEM</B>" -->
<DIV align="left"><A NAME="045"></A></DIV>
<P align="left"><B>(18)&nbsp;EXTRAORDINARY ITEM</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 1999, Range exchanged $2.3&nbsp;million of Convertible Preferred
Securities and $3.6&nbsp;million of Debentures for approximately 699,000 shares of
Common Stock. In connection with the exchange a $2.4&nbsp;million extraordinary
gain was recorded because the Convertible Preferred Securities and Debentures
were retired at a discount to their face value.

<!-- link2 "<B>(19)&nbsp;UNAUDITED SUPPLEMENTAL RESERVE INFORMATION</B>" -->
<DIV align="left"><A NAME="046"></A></DIV>
<P align="left"><B>(19)&nbsp;UNAUDITED SUPPLEMENTAL RESERVE INFORMATION</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s proved oil and gas reserves are located in the United
States. Proved reserves are those quantities of crude oil and natural gas
which, upon analysis of geological and engineering data, can with reasonable
certainty be recovered in the future from known oil and gas reservoirs. Proved
developed reserves are those proved reserves, which can be expected to be
recovered from existing wells with existing equipment and operating methods.
Proved undeveloped oil and gas reserves are proved reserves that are expected
to be recovered from new wells on undrilled acreage.
<P align="center">62
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="left"><B>Quantities of Proved Reserves</B>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="66%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Crude Oil</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Natural Gas</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(Bbls)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(Mcf)</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="center" colspan="7"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Balance, December&nbsp;31, 1996</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,675</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">295,594</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Revisions</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,603</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(70,763</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Extensions, discoveries and additions</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,664</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,324</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Purchases</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">18,541</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">339,447</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Sales</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(709</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6,775</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Production</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,794</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(38,409</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Balance, December&nbsp;31, 1997</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,774</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">574,418</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Revisions</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(14,195</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(76,728</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Extensions, discoveries and additions</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,121</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">57,261</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Purchases</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,332</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">140,120</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Sales</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,248</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(16,561</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Production</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,655</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(45,193</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Balance, December&nbsp;31, 1998</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,129</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">633,317</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Revisions</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,294</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(39,298</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Extensions, discoveries and additions</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">307</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,066</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Purchases</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,241</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">51,751</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Sales</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,495</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(162,245</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Production</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,659</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(50,808</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Balance, December&nbsp;31, 1999</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,817</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">443,783</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><B>Proved developed reserves</B>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="66%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Crude Oil</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Natural Gas</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(Bbls)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(Mcf)</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="center" colspan="7"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">December&nbsp;31, 1997</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">14,971</FONT></TD>
<TD nowrap><FONT size="2">&nbsp;</FONT></TD>
<TD></TD>
<TD nowrap align="right">&nbsp;</TD>
<TD align="right"><FONT size="2">369,786</FONT></TD>
<TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">December&nbsp;31, 1998</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">19,649</FONT></TD>
<TD nowrap><FONT size="2">&nbsp;</FONT></TD>
<TD></TD>
<TD nowrap><FONT size="2">&nbsp;</FONT></TD>
<TD align="right"><FONT size="2">436,062</FONT></TD>
<TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">December&nbsp;31, 1999</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">17,884</FONT></TD>
<TD nowrap><FONT size="2">&nbsp;</FONT></TD>
<TD></TD>
<TD nowrap><FONT size="2">&nbsp;</FONT></TD>
<TD align="right"><FONT size="2">299,436</FONT></TD>
<TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The revisions which occurred during 1998 include 13,126 Mbbl of oil and
49,004 Mmcf of gas which became uneconomic due to lower commodity prices at
December&nbsp;31, 1998 as compared to December&nbsp;31, 1997. The
revisions which occurred during 1999 were based primarily on
reservoir performance measures partially offset by some revisions
upward for positive changes in commodity prices. The average prices used
at December&nbsp;31, 1999 to estimate the reserve information
were $23.48 per barrel
for oil, $15.69 per barrel for natural gas liquids and $2.34 per Mcf
for gas using the benchmark NYMEX price of $25.60 per barrel and
$2.33 per Mmbtu.
The average prices at December&nbsp;31, 1998 were $10.25 per barrel for oil, $6.61
per barrel for natural gas liquids and $2.34 per Mcf for gas using
the benchmark NYMEX price of $12.38 per barrel and $2.25 per Mmbtu.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The &#147;Standardized Measure of Discounted Future Net Cash Flows Relating to
Proved Oil and Gas Reserves&#148; (Standardized Measure) is a disclosure requirement
under Statement of Financial Accounting Standards No.&nbsp;69 &#147;Disclosures about Oil
and Gas Producing Activities&#148;. The Standardized Measure does not purport to
present the fair market value of proved oil and gas reserves. This would
require consideration of expected future economic and operating conditions,
which are not taken into account in calculating the Standardized Measure.
<P align="center">63
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<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>


<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future cash inflows were estimated by applying year end prices to the
estimated future production less estimated future production costs based on
year end costs. Future net cash inflows were discounted using a 10% annual
discount rate to arrive at the Standardized Measure.

<P align="left"><B>Standardized Measure</B>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="52%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>As of December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="center" colspan="11"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Future cash inflows</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,037,357</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,744,653</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,689,541</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Future costs:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Production</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(512,657</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(513,119</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(486,618</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Development</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(248,553</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(211,236</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(189,784</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Future net cash flows</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,276,147</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,020,298</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,013,139</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Income Taxes</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(280,189</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(104,500</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(131,529</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total undiscounted future net cash flows</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">995,958</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">915,798</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">881,610</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">10% discount factor</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(485,258</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(398,703</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(378,459</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Standardized measure</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">510,700</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">517,095</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">503,151</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><B>Changes in Standardized Measure</B>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="52%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>As of December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="center" colspan="11"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Standardized measure, beginning of year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">350,889</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">510,700</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">517,095</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Revisions:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Prices</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(210,429</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(138,985</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">128,799</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Quantities</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(29,409</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(112,012</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(37,911</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Estimated future development cost</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(37,788</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26,465</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,941</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Accretion of discount</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">49,217</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">63,233</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45,420</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Income taxes</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,360</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">88,222</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(14,307</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Net Revisions</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(218,049</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(73,007</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">130,942</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Purchases</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">460,753</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">134,186</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">71,022</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Extensions, discoveries and additions</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,751</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">35,169</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,354</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Production</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(93,865</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(87,668</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(77,884</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Sales</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(14,406</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(26,197</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(136,491</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Changes in timing and other</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(30,373</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,982</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(17,887</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Standardized measure, end of year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">510,700</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">517,095</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">503,151</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">64
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>RANGE RESOURCES CORPORATION</B>

<!-- link1 "<B>INDEX TO EXHIBITS</B>" -->
<DIV align="left"><A NAME="047"></A></DIV>
<P align="center"><B>INDEX TO EXHIBITS</B>

<P align="center">(Item&nbsp;14[a 3])

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="1" width="100%" align="center">
<TR valign="bottom">
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="89%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Exhibit No.</B></FONT></TD>
<TD></TD>
<TD nowrap align="center"><FONT size="2"><B>Description</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD nowrap align="center"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD valign="top"><FONT size="3">3.1(a)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Certificate of Incorporation of Lomak dated March&nbsp;24, 1980 (incorporated by reference to the Company&#146;s Registration Statement (No.
33-31558)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">3.1(b)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Certificate of Amendment of Certificate of Incorporation dated July&nbsp;22, 1981 (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;33-31558)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">3.1(c)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Certificate of Amendment of Certificate of Incorporation dated September&nbsp;8, 1982 (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;33-31558)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">3.1(d)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Certificate of Amendment of Certificate of Incorporation dated December&nbsp;28, 1988 (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;33-31558)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">3.1(e)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Certificate of Amendment of Certificate of Incorporation dated August&nbsp;31, 1989 (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;33-31558)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">3.1(f)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Certificate of Amendment of Certificate of Incorporation dated May&nbsp;30, 1991 (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;333-20259)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">3.1(g)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Certificate of Amendment of Certificate of Incorporation dated November&nbsp;20, 1992 (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;333-20257)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">3.1(h)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Certificate of Amendment of Certificate of Incorporation dated May&nbsp;24, 1996 (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;333-20257)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">3.1(i)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Certificate of Amendment of Certificate of Incorporation dated October&nbsp;2, 1996 (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;333-20257)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">3.1(j)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Restated Certificate of Incorporation as required by Item&nbsp;102 of Regulation&nbsp;S-T (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;333-20257)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">3.1(k)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Certificate of Amendment of Certificate of Incorporation dated August&nbsp;25, 1998 (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;333-62439)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">3.2</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
By-Laws of the Company (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;33-31558)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Specimen certificate of Lomak Petroleum, Inc. (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;333-20257)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.4</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Certificate of Trust of Lomak Financing Trust (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;333-43823)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.5</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Amended and Restated Declaration of Trust of Lomak Financing Trust dated as of October&nbsp;22, 1997 by The Bank of New York (Delaware) and the
Bank of New York as Trustees and Lomak Petroleum, Inc. as Sponsor (incorporated by reference to the Company&#146;s Registration Statement (No.
333-43823)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.6</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Indenture dated as of October&nbsp;22, 1997, between Lomak Petroleum, Inc. and The Bank of New York (incorporated by reference to the Company&#146;s
Registration Statement (No.&nbsp;333-43823)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.7</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
First Supplemental Indenture dated as of October&nbsp;22, 1997, between Lomak Petroleum, Inc. and The Bank of New York (incorporated by
reference to the Company&#146;s Registration Statement (No.&nbsp;333-43823)).</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">65
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="1" width="100%" align="center">
<TR valign="bottom">
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="89%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.8</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Form of 5 3/4% Preferred Convertible Securities (included in Exhibit&nbsp;4.5 above).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.9</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Form of 5 3/4% Convertible Junior Subordinated Debentures (included in Exhibit&nbsp;4.7 above).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.10</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Convertible Preferred Securities Guarantee Agreement dated October&nbsp;22, 1997, between Lomak Petroleum, Inc., as Guarantor, and The Bank of
New York as Preferred Guarantee Trustee (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;333-43823)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.11</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Common Securities Guarantee Agreement dated October&nbsp;22, 1997, between Lomak Petroleum, Inc., as Guarantor, and The Bank of New York as
Common Guarantee Trustee. (incorporated by reference to the Company&#146;s Registration Statement No.&nbsp;333-43823)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.12</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Purchase and Sale Agreement between Cometra Energy, L.P. and Cometra Production Company, L.P., as seller, and Lomak Petroleum, Inc., as
buyer, dated December&nbsp;31, 1996, including First Amendment to Purchase and Sale Agreement, dated January&nbsp;10, 1997 (incorporated by reference
to the Company&#146;s Registration Statement (No.&nbsp;333-20257)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.13</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Purchase and Sale Agreement between Rockland, L.P., as seller, and Lomak Petroleum, Inc., as buyer, dated December&nbsp;31, 1996 (incorporated
by reference on the Company&#146;s Registration Statement (No.&nbsp;333-20257)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.14</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Form of Trust Indenture relating to the Senior Subordinated Notes due 2007 between Lomak Petroleum, Inc., and Fleet National Bank as trustee
(incorporated on the Company&#146; s Registration Statement (No.&nbsp;333-20257)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.15</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Purchase and Sale Agreement dated as of September&nbsp;8, 1997 by and among Cabot Oil &#38; Gas Corporation, Cranberry Pipeline Corporation, Big
Sandy Gas Company, and Lomak Petroleum, Inc. (incorporated by reference to the Company&#146;s Form&nbsp;10-K dated March&nbsp;20, 1998).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.16</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Agreement and Plan of Reorganization dated December&nbsp;5, 1997 between Arrow Operating Company, Kelly W. Hoffman and L .S. Decker and Lomak Petroleum,
Inc. (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;333-43823))</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">4.17</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Credit Agreement, dated as of June&nbsp;7, 1996, between Domain
Finance Corporation and Compass Bank &#151;Houston (including
the First and the Second Amendment thereto) (incorporated by
reference to Exhibit&nbsp;10.3 of Domain Energy Corporation&#146;s
Registration Statement on Form&nbsp;S-1 filed with the Commission
on April&nbsp;4, 1997 and Exhibit&nbsp;10.3 of Amendment No.&nbsp;1 to
Domain Energy Corporation&#146;s Registration Statement on Form
S-1 filed with the Commission on May&nbsp;21, 1997) (File No.
333-24641).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(a)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Incentive and Non-Qualified Stock Option Plan dated March&nbsp;13, 1989 (incorporated by reference to the Company&#146;s Registration Statement (No.
33-31558)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(b)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Advisory Agreement dated September&nbsp;29, 1988 between Lomak and SOCO (incorporated by reference to the Company&#146;s Registration Statement (No.
33-31558)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(c)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
401(k) Plan Document and Trust Agreement effective January&nbsp;1, 1989 (incorporated by reference to the Company&#146;s Registration Statement (No.
33-31558)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(d)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
1989 Stock Purchase Plan (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;33-31558)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(e)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Form of Directors Indemnification Agreement (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;333-47544)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(f)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
1994 Outside Directors Stock Option Plan (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;33-47544)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(g)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
1994 Stock Option Plan (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;33-47544)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(h)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
$400,000,000 Credit Agreement Among Lomak Petroleum, Inc., as Borrower, and the Several Lenders from Time to Time parties Hereto, including
Bank One, Texas, N.A. as Administrative Agent, The Chase Manhattan Bank, as Syndication Agent, and Nationsbank of Texas, N.A., as</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Documentation Agent (incorporated by reference to the Company&#146;s Form&nbsp;10-K dated February&nbsp;7, 1997).</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">66
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<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="1" width="100%" align="center">
<TR valign="bottom">
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="89%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(i)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Registration Rights Agreement dated October&nbsp;22, 1997, by and among Lomak Petroleum, Inc., Lomak Financing Trust, Morgan Stanley &#38; Co.
Incorporated, Credit Suisse First Boston, Forum Capital markets L.P. and McDonald Company Securities, Inc., (incorporated by reference to
the Company&#146;s Registration Statement (No.&nbsp;333-43823)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(j)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Amendment to the Lomak Petroleum, Inc., 1989 Stock Purchase Plan, as amended (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;333-44821)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(k)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
1997 Stock Purchase Plan (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;333-44821)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(l)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
1997 Stock Purchase Plan, as amended (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;333-44821)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(m)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Fourth Amendment to $400,000,000 Credit Agreement dated January&nbsp;27, 1999</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">10.1(n)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Second Amended and Restated 1996 Stock Purchase and Option Plan for Key Employees of Domain Energy Corporation and Affiliates (incorporated by reference to the Company&#146;s Registration Statement (No.&nbsp;333-62439)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(o)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Domain Energy Corporation 1997 Stock Option Plan for Nonemployee Directors (incorporated by reference to the Company&#146;s Registration
Statement (No.&nbsp;333-62439)).</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(p)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Employment Agreement, dated August&nbsp;25, 1998, between the Company and Michael V. Ronca.</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD nowrap valign="top"><FONT size="3">10.1(q)*</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
$100,000,000 Credit Agreement between Range Energy Finance
Corporation, as Borrower, and Credit Lyonnais New York Branch, as
Administrative Agent and Certain Lenders dated December&nbsp;14, 1999.</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">21*</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Subsidiaries of the Registrant.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">23.1*</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Consent of Independent Public Accountants.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">23.2*</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Consent of H.J. Gruy and Associates, Inc., independent consulting petroleum engineers.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">23.3*</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Consent of DeGoyler and MacNaughton, independent consulting petroleum engineers.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">23.4*</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Consent of Wright and Company, independent consulting engineers.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="3">27*</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="3">
Financial Data Schedule.</FONT></TD>
</TR>
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<TD width="1%" align="left">*</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Filed herewith.</TD>
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<P align="center">67
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