BARRETT RESOURCES CORP, S-3, 1996-05-17

BARRETT RESOURCES CORP
S-3, 1996-05-17
PETROLEUM & PETROLEUM PRODUCTS (NO BULK STATIONS)

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 17, 1996

REGISTRATION NO. 333-

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- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

----------------
BARRETT RESOURCES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 84-0832476
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

1515 ARAPAHOE STREET, TOWER 3, SUITE 1000
DENVER, COLORADO 80202
(303) 572-3900
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

EUGENE A. LANG, JR., ESQUIRE, SENIOR VICE PRESIDENT--GENERAL COUNSEL
BARRETT RESOURCES CORPORATION
1515 ARAPAHOE STREET, TOWER 3, SUITE 1000
DENVER, COLORADO 80202
(303) 572-3900
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:
ALAN L. TALESNICK, ESQUIRE MARK ZVONKOVIC, ESQUIRE
FRANCIS B. BARRON, ESQUIRE CHRISTINE B. LAFOLLETTE, ESQUIRE
BEARMAN TALESNICK & CLOWDUS ANDREWS & KURTH L.L.P.
PROFESSIONAL CORPORATION 425 LEXINGTON AVENUE
1200 SEVENTEENTH STREET SUITE 2600 NEW YORK, NEW YORK 10017
DENVER, COLORADO 80202 (212) 850-2800
(303) 572-6500

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after effective date of Registration Statement.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED(1)(2) PER SHARE(3) PRICE(3) FEE(2)(3)
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<S> <C> <C> <C> <C>
Common Stock, $0.01 par
value................. 4,600,000 shares $23.4375 $107,812,500 $37,177
</TABLE>
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- -------------------------------------------------------------------------------
(1)Includes 600,000 shares to cover the Underwriters' over-allotment options.
(2) The shares of Common Stock are not being registered for the purpose of
sales outside the United States.
(3) Calculated in accordance with Rule 457(c) of the Securities Act of 1933,
based upon the high and low reported sales prices of the Company's common
stock on May 16, 1996 as reported on The New York Stock Exchange, Inc.
Composite Transactions Reporting System.

----------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.

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- -------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGIS- +
+TRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECU- +
+RITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OF- +
+FERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES +
+EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SO- +
+LICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES +
+IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL +
+PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH +
+STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 17, 1996

4,000,000 SHARES

BARRETT RESOURCES CORPORATION

COMMON STOCK

(PAR VALUE $0.01 PER SHARE)

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Of the 4,000,000 shares of Common Stock offered, 3,200,000 shares are being
offered hereby in the United States and 800,000 shares are being offered in a
concurrent international offering outside the United States. The initial public
offering price and aggregate underwriting discount per share will be identical
for both offerings. See "Underwriting".

The last reported sale price of the Common Stock, which is quoted under the
symbol "BRR", on the New York Stock Exchange on May 15, 1996 was $24.25 per
share. See "Price Range of Common Stock".

SEE "RISK FACTORS" ON PAGE 8 FOR CERTAIN CONSIDERATIONS RELEVANT TO AN
INVESTMENT IN THE COMMON STOCK OFFERED HEREBY.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

-----------

<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE DISCOUNT(1) COMPANY(2)
-------------- ------------ -----------
<S> <C> <C> <C>
Per Share........................ $ $ $
Total(3)......................... $ $ $
</TABLE>
- -----
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(2) Before deducting estimated expenses of $420,000 payable by the Company.
(3) The Company has granted the U.S. Underwriters an option for 30 days to
purchase up to an additional 480,000 shares at the initial public offering
price per share, less the underwriting discount, solely to cover over-
allotments. Additionally, the Company has granted the International
Underwriters a similar option with respect to an additional 120,000 shares
as part of the concurrent international offering. If such options are
exercised in full, the total initial public offering price, underwriting
discount and proceeds to Company will be , and , respectively.
See "Underwriting".

-----------

The shares offered hereby are offered severally by the U.S. Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
certificates for the shares will be ready for delivery in New York, New York,
on or about , 1996, against payment therefor in immediately available
funds.

GOLDMAN, SACHS & CO.

SALOMON BROTHERS INC

HOWARD, WEIL, LABOUISSE, FRIEDRICHS
INCORPORATED

PETRIE PARKMAN & CO.

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The date of this Prospectus is May , 1996.
<PAGE>

[CORE AREAS OF ACTIVITY MAP APPEARS HERE]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.

2
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus and
in the documents incorporated by reference into this Prospectus. As used
herein, the "Company" or "Barrett" means Barrett Resources Corporation and its
subsidiaries unless the context requires otherwise. Unless otherwise indicated,
all references to annual or quarterly periods refer to the Company's fiscal
year ending December 31. Unless otherwise indicated herein, the information in
this Prospectus (i) includes the effects of the restatement of the Company's
financial, operating and reserve information to include Plains Petroleum
Company ("Plains") on a combined basis effective for all periods as a result of
the July 18, 1995 merger with Plains, which was accounted for as a pooling of
interests, and (ii) assumes that the Underwriters' over-allotment options are
not exercised. Investors should carefully consider the information set forth
under the heading "Risk Factors". Certain terms used herein relating to the oil
and gas industry are defined in "Certain Definitions" included on pages 43
through 44 of this Prospectus.

THE COMPANY

GENERAL

Barrett is an independent natural gas and crude oil exploration and
production company with core areas of activity in the Rocky Mountain region of
Colorado and Wyoming; the Mid-Continent region of Kansas and Oklahoma; and the
Southern region of Texas, New Mexico, the Gulf Coast area of Louisiana and
Texas and the shallow waters of the Gulf of Mexico. During 1995, the Company's
total production was 57.9 Bcfe, which consisted of 82% natural gas and 18%
crude oil. At December 31, 1995, the Company's estimated proved reserves were
591.3 Bcfe with an implied reserve life of 10.2 years based on 1995 production.

The Company concentrates its activities in core areas in which it has
accumulated detailed geologic knowledge and developed significant management
expertise. The Company has developed and continues to build on its interests in
the Piceance Basin in northwestern Colorado, the Anadarko and Arkoma Basins in
Oklahoma and the Wind River Basin in Wyoming. As a result of the July 1995
merger with Plains, the Company acquired significant interests in the Hugoton
Embayment in Kansas and Oklahoma, the Permian Basin in Texas and New Mexico,
and the Powder River Basin in Wyoming. Recently, the Company expanded into the
Louisiana and Texas Gulf Coast area and the shallow waters of the Gulf of
Mexico. At December 31, 1995, these principal areas of focus represented an
aggregate of approximately 93% of the Company's estimated proved reserves.

The Company currently is experiencing significant growth in its gas
production volumes, revenues and cash flow primarily as a result of its
development drilling in the Wind River, Anadarko and Piceance Basins. For the
first quarter ended March 31, 1996, the Company's average net daily gas
production increased to 147.8 MMcf from 130.7 MMcf for the full year of 1995.

In addition to these development drilling programs, the Company is engaged in
several exploration projects in the Wind River and Anadarko Basins and the Gulf
Coast/Gulf of Mexico area. Barrett believes these projects will enhance its
reserve base and financial position, although there can be no assurance this
will occur. The Company also is evaluating opportunities to develop expertise
and undertake exploration in selected international projects.

As of December 31, 1995, the Company owned interests in 2,057 producing wells
and operated 1,061, or 52%, of these wells. These operated wells contributed
approximately 90% of Barrett's 1995

3
<PAGE>

gas and oil production. The Company also owns interests in and operates a gas
gathering system, a 27-mile pipeline and a gas processing plant in the Piceance
Basin, and three smaller gas gathering systems in Oklahoma, Wyoming and Utah.

Barrett markets all of its own gas and oil production from wells that it
operates. In addition, the Company engages in natural gas trading activities,
which involve purchasing gas from third parties and selling gas to other
parties at prices and volumes that management anticipates will result in
profits to the Company. Through these trading activities, the Company obtains
knowledge and information that enables it to more effectively market its own
production. See "Business and Properties -- Gas and Oil Marketing and Trading".

BUSINESS STRATEGY

Barrett's business strategy is to generate strong growth in reserves,
production, earnings and cash flow through exploration, development and
selective acquisitions of gas and oil properties in core areas of activity. The
Company implements this strategy through the following:

SPECIALIZED GEOLOGIC EXPERTISE. Both the CEO and President of Barrett are
experienced, practicing geologists. They have established a team of geologists
and geophysicists with expertise in the Company's core areas of activity. Prior
to undertaking projects in new areas, the Company assembles specialized
geologic expertise to identify and evaluate drilling prospects.

AGGRESSIVE DRILLING PROGRAM. Barrett maintains a quality portfolio of higher
risk, higher potential exploration prospects complemented by lower risk
development projects. The majority of the Company's $131 million 1996 capital
expenditure budget, which represents an increase of 82% from 1995 capital
spending levels, is allocated to drilling activities. This budget contemplates
that the Company will participate in drilling over 200 gross wells in 1996,
subject to market conditions and other factors, compared with 129 gross wells
in 1995.

ADVANCED TECHNOLOGY. The Company makes extensive use of advanced
technologies, including 3-D seismic and in-house analytical and processing
capabilities, to better define drilling prospects. The Company also uses
advanced production techniques in its enhanced recovery operations.

OPERATING CORE PROPERTIES. At December 31, 1995, Barrett served as operator
for 1,061 wells, representing approximately 90% of the Company's 1995
production. As operator, the Company coordinates drilling activities and
arranges for the production, gathering and sale of its gas and oil from
operated wells. Serving as operator enables the Company to exert greater
control over the cost and timing of its exploration, development and production
activities.

ACTIVE COST MANAGEMENT. As the Company pursues continued strong growth, it
strives to reduce expenses through implementation of cost control programs and
active management of its operations, personnel and administrative activities.

SELECTIVE ACQUISITIONS. The Company actively seeks to acquire working
interests in gas and oil properties with development potential to augment
operations in its core areas and to build acreage positions for exploration
prospects.

FINANCIAL FLEXIBILITY. The Company is committed to maintaining financial
flexibility in order to pursue exploration and development activities and take
advantage of selective acquisition opportunities that may arise. The Offerings,
and the resulting reduction of debt, will enhance Barrett's financial
flexibility by further strengthening its balance sheet.

4
<PAGE>

RECENT DEVELOPMENTS

On March 6, 1996, the Company announced a 1996 capital expenditure budget of
$131 million, which is contingent upon market conditions and other factors.
Total 1996 budgeted expenditures include approximately $24 million for the Wind
River Basin, $13 million for the Piceance Basin, $22 million for the Anadarko
Basin, $18 million for the Arkoma Basin, $14 million for the Gulf Coast/Gulf of
Mexico, $1 million for international projects, $20 million for exploration and
development activities in other areas, and $19 million for possible
acquisitions, primarily in the Company's core areas.

In April 1996, the Company committed $2.3 million to the acquisition of
working interests in 11 blocks of undeveloped leases in the Gulf of Mexico. In
addition, to support its Gulf Coast/Gulf of Mexico activities, the Company
established an office in Houston, Texas in January 1996.

In April 1996, the Company acquired, for $2.7 million from Zenith Drilling
Corporation ("Zenith"), all of Zenith's Piceance Basin gas and oil interests,
with an estimated 16.6 Bcf of proved natural gas reserves. In addition, the
Company acquired all the stock of Grand Valley Corporation ("GVC") in exchange
for 350,000 shares of the Company's Common Stock. The sole asset of GVC is an
approximate 10% interest in the Grand Valley Gathering System. The Company
previously owned interests in and is the operator of both the gathering system
and the gas and oil assets in which it acquired interests as a result of these
transactions.

Mr. C. Robert Buford, a director of the Company, owns 89% of Zenith. In
addition, at the time of the GVC transaction, Mr. Buford served as a director
of GVC and owned 10% of GVC. Due to these relationships, the terms of these
transactions with Zenith and GVC were negotiated on behalf of the Company by a
Special Committee of the Board of Directors of the Company, consisting of four
independent outside directors. The Company also obtained an opinion from an
investment banking firm that the terms of these transactions were fair to the
Company. See "Business and Properties--Recent Developments", "--Rocky Mountain
Region--Piceance Basin" and "Underwriting".

THE OFFERINGS(1)

<TABLE>
<S> <C>
Common Stock offered by the
Company:
U.S. Offering................... 3,200,000 shares
International Offering.......... 800,000 shares
---------
Total......................... 4,000,000 shares
=========
Common Stock to be outstanding
after the Offerings.............. 29,572,507 shares(2)
New York Stock Exchange symbol.... BRR
Use of proceeds................... To repay indebtedness and create additional
capacity under the Company's line of credit
which, together with operating cash flow,
will be used to fund the Company's planned
exploration and development activities as
well as possible acquisitions, and for
other general corporate purposes. See "Use
of Proceeds".
</TABLE>
- --------
(1) Assumes that the Underwriters' over-allotment options are not exercised.
See "Underwriting".
(2) Does not include 1,189,131 shares of Common Stock issuable upon exercise of
outstanding stock options.

As used in this Prospectus, references to the "U.S. Offering" shall mean the
offering of shares of Common Stock in the United States, and references to the
"International Offering" shall mean the offering of such shares outside the
United States. The U.S. Offering and the International Offering are referred to
herein collectively as the "Offerings".

5
<PAGE>

SUMMARY GAS AND OIL RESERVE INFORMATION

The following table sets forth summary information with respect to the
Company's estimated net proved gas and oil reserves and the discounted present
value of the estimated future net revenues therefrom as of December 31, 1995.
For additional information relating to the Company's gas and oil reserves, see
"Business and Properties--Core Areas of Activity", "--Production", "--
Reserves", the Supplemental Gas and Oil Information included after the
Consolidated Financial Statements and "Risk Factors--Engineers' Estimates of
Reserves and Future Net Revenues" included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1995
------------------------------
DEVELOPED UNDEVELOPED TOTAL
--------- ----------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Estimated Proved Reserves(1):
Gas (Bcf).................................... 419.7 93.9 513.5
Oil (MMBbls)................................. 11.7 1.3 13.0
Total (Bcfe)............................... 489.7 101.6 591.3
Present Value of Estimated Future Net Revenues
before income taxes discounted at 10%(2)...... $379,546 $53,057 $432,603
Standardized Measure of Discounted Net Cash
Flows(3)...................................... -- -- 309,874
</TABLE>
- --------
(1) The Company's annual reserve report as of December 31, 1995 was prepared by
the Company, with certain portions of the reserve report, exclusive of
those portions concerning the Company's reserves held by its Plains
subsidiary, having been reviewed by Ryder Scott Company, an independent
reservoir engineer. The portions of the report concerning the reserves that
are held by its Plains subsidiary were reviewed by Netherland, Sewell &
Associates, Inc., an independent reservoir engineer that has reviewed
Plains' reserve reports since 1988.
(2) The Present Value of Estimated Future Net Revenues is based on weighted
average prices of $1.77 per Mcf of gas and $17.35 per Bbl of oil realized
by the Company at December 31, 1995.
(3) The Standardized Measure of Discounted Net Cash Flows prepared by the
Company represents the Present Value of Estimated Future Net Revenues after
income taxes discounted at 10%.

6
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SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

The following table sets forth the summary historical consolidated financial
data of Barrett for each of the periods indicated. The historical financial
data of Barrett for the three-year period ended December 31, 1995 have been
derived from Barrett's audited consolidated financial statements. The
historical financial data for the three months ended March 31, 1995 and 1996
are derived from unaudited financial statements of the Company. Production data
for all periods are unaudited. Barrett's previously reported data for 1995 and
prior years have been restated to reflect the merger with Plains under the
pooling of interests method of accounting and the change in fiscal year end
from September 30 to December 31. The summary consolidated financial and
operating data set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the financial statements, notes thereto and other information included
elsewhere in this Prospectus and the documents incorporated herein by
reference.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
-------------------------- ---------------
1993 1994 1995(1) 1995 1996
-------- -------- -------- ------- -------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE
AND SALES PRICE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(2):
Revenues.......................... $106,072 $109,458 $128,016 $33,471 $42,307
Depreciation, depletion and
amortization..................... 20,185 22,760 33,480 8,100 9,404
Interest expense.................. 725 942 4,631 941 1,551
Income (loss) before income taxes
and cumulative effect of change
in method of accounting for
postretirement benefits.......... $ 21,043 $ 16,437 $ (406) $ 4,327 $ 5,573
Net income (loss)................. 13,666 11,299 (2,240) 3,014 3,456
Net income (loss) per share....... 0.55 0.46 (0.09) 0.11 0.14
EBITDA(3)......................... $ 41,217 $ 39,275 $ 36,991 $15,903 $18,398
CASH FLOW STATEMENT DATA:
Cash flow from operations before
changes in working capital....... $ 40,484 $ 38,975 $ 33,390 $12,327 $13,560
Cash flow from operations after
changes in working capital....... 41,580 36,573 35,538 6,978 13,225
Additions to property, plant and
equipment........................ 45,488 95,589 82,758 18,252 22,173
RESERVE AND OPERATING DATA:
Proved reserves
Gas (Bcf)........................ 364.8 458.8 513.5 -- --
Oil (MMBbls)..................... 6.9 11.4 13.0 -- --
Total (Bcfe)..................... 406.5 527.5 591.3 -- --
Production
Gas (Bcf)........................ 31.7 33.3 47.7 11.7 13.5
Oil and condensate (MMBbls)...... 1.3 1.3 1.7 0.4 0.4
Total (Bcfe)..................... 39.5 41.0 57.9 14.2 16.0
Reserves to production ratio
(years).......................... 10.3 12.9 10.2 -- --
Average sales price
Gas ($/Mcf)...................... $ 1.94 $ 1.83 $ 1.47 $ 1.57 $ 1.67
Oil and condensate ($/Bbl)....... 14.93 13.95 15.76 15.55 16.51
</TABLE>

<TABLE>
<CAPTION>
AS OF
DECEMBER 31, AS OF MARCH 31, 1996
----------------- -----------------------
1994 1995 ACTUAL AS ADJUSTED(4)
-------- -------- -------- --------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital....................... $ 2,466 $ 3,686 $ 8,516 $ 8,516
Total assets.......................... 310,952 340,412 361,727 361,727
Long-term debt........................ 53,000 89,000 100,000 8,125
Stockholders' equity.................. 188,136 191,828 196,513 288,388
</TABLE>
- --------
(1) Excluding 1995 nonrecurring transaction costs relating to the Plains merger
totaling $14.2 million, net income (loss) for the year ended December 31,
1995 would be $9.5 million, EBITDA would be $51.2 million, cash flow from
operations before changes in working capital would be $47.6 million, and
cash flow from operations after changes in working capital would be $49.7
million. In addition, the effect of these nonrecurring costs was to reduce
net income per share for the year ended December 31, 1995 by $0.47. EBITDA
and cash flow from operations before changes in working capital are not
measures determined pursuant to generally accepted accounting principles
("GAAP") nor are they alternatives to GAAP income or cash flow provided by
operations. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations".
(2) Plains used the successful efforts method of accounting and adopted the
full cost method used by Barrett in the retroactively restated financial
statements. See Note 2 to Financial Statements.
(3) Reflects income before income taxes less interest income, plus interest
expense, plus depreciation, depletion and amortization expense. This data
does not purport to reflect any measure of operations or cash flow.
(4) As adjusted to give effect to the issuance and sale of 4,000,000 shares of
Common Stock offered hereby and the application of net proceeds therefrom.
See "Use of Proceeds".

7
<PAGE>

RISK FACTORS

In addition to the other information contained in this Prospectus, the
following risk factors should be considered when evaluating an investment in
the shares of Common Stock offered hereby.

VOLATILITY OF PRICES AND AVAILABILITY OF MARKETS

The Company's revenues, profitability and future rate of growth are
substantially dependent upon prevailing prices for natural gas and oil, which
can be extremely volatile and in recent years have been depressed by excess
domestic and imported supplies. Natural gas prices have risen in recent
months. There can be no assurance that current price levels can be sustained.
Prices also are affected by actions of state and local agencies, the United
States and foreign governments, and international cartels. These external
factors and the volatile nature of the energy markets make it difficult to
estimate future prices of natural gas and oil. Any substantial or extended
decline in the price of natural gas would have a material adverse effect on
the Company's financial condition and results of operations, including reduced
cash flow and borrowing capacity. All of these factors are beyond the control
of the Company. The marketability of the Company's production depends in part
upon the availability, proximity and capacity of gas gathering systems,
pipelines and processing facilities. Federal and state regulation of gas and
oil production and transportation, general economic conditions, changes in
supply and changes in demand all could adversely affect the Company's ability
to produce and market its natural gas and oil. If market factors were to
change dramatically, the financial impact on the Company could be substantial.
The volatility of product prices and the availability of markets are beyond
the control of the Company and thus represent a significant risk. For the year
ended December 31, 1995, the Company's production and reserve base were
approximately 82% and 87% natural gas, respectively, on an energy equivalent
basis. As a result, the Company's earnings and cash flow are more sensitive to
fluctuations in the price of natural gas than to fluctuations in the price of
oil. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business and Properties--Gas and Oil Marketing and
Trading".

The Company engages in hedging activities with respect to some of its gas
and oil production through a variety of financial arrangements designed to
protect against price declines, including swaps and futures agreements. To the
extent that Barrett engages in such activities, it may be prevented from
realizing the benefits of price increases above the levels of the hedges. See
"Business and Properties--Gas and Oil Marketing and Trading."

The Company reports its operations using the full cost method of accounting
for gas and oil properties. Under full cost accounting rules, the net
capitalized costs of gas and oil properties may not exceed a "ceiling" limit
of the present value of estimated future net revenues from proved reserves,
discounted at 10%, plus the lower of cost or fair market value of unproved
properties. This rule requires calculating future revenues at unescalated
prices in effect as of the end of each fiscal quarter and requires a write-
down if the net capitalized costs of the gas and oil properties exceed the
ceiling limit, even if price declines are temporary. The risk that the Company
will be required to write-down the carrying value of its gas and oil
properties increases when gas and oil prices are depressed or unusually
volatile. A ceiling limitation write-down is a one-time charge to earnings,
which does not impact cash flow from operating activities.

OTHER INDUSTRY AND BUSINESS RISKS

The Company competes in the areas of gas and oil exploration, production,
development and transportation with other companies, many of which may have
substantially larger financial and other resources. The nature of the gas and
oil business also involves a variety of risks, including the risks of
operating hazards such as fires, explosions, cratering, blow-outs,
encountering formations with abnormal pressures, and, in horizontal wellbores,
the increased risk of mechanical failure and collapsed holes, the occurrence
of any of which could result in losses to the Company. The operation

8
<PAGE>

of the Company's gas processing plant and its gas gathering systems involves
certain risks, including explosions and environmental hazards caused by
pipeline leaks and ruptures. The effect of these hazards are increased with
respect to the Company's Gulf Coast operations due to the difficulty of
containing leaks and ruptures in offshore locations. In accordance with
customary industry practices, the Company maintains insurance against some,
but not all, of these risks in amounts that management believes to be
reasonable. The occurrence of a significant event that is not fully insured
could have a material adverse effect on the Company's financial position.

The Company's revenues depend on its level of success in acquiring or
finding additional reserves. Except to the extent that the Company acquires
properties containing proved reserves or conducts successful exploration and
development activities, or both, the proved reserves of the Company will
decline as reserves are produced. There can be no assurance that the Company's
planned exploration and development projects will result in additional
reserves or that the Company will have future success in drilling productive
wells.

Gas trading activities involve a high degree of risk because of the inherent
uncertainties associated with the gas trading process. These uncertainties
include the lack of predictability in gas prices, risk of non-performance by
counter-parties, market imperfections caused by regional price differentials,
possible lack of liquidity in the trading markets and possible failure of
physical delivery. Although the possibility of lower natural gas prices tends
to add risk to the Company's exploration and development activities, it is the
possibility of unexpected price volatility that represents a primary risk for
the Company's gas trading activities. In addition, gas trading is highly
competitive and the Company competes with several other companies, many of
which have more experience, personnel and other resources available to them.
However, the Company does not believe that any one competitor is dominant in
the industry.

ENGINEERS' ESTIMATES OF RESERVES AND FUTURE NET REVENUES

This Prospectus contains estimates of reserves and of future net revenues
which have been prepared by the Company and reviewed by independent petroleum
engineers. However, petroleum engineering is not an exact science and involves
estimates based on many variable and uncertain factors. Estimates of reserves
and of future net revenues prepared by different petroleum engineers may vary
substantially depending, in part, on the assumptions made and may be subject
to adjustment either up or down in the future. The actual amounts of
production, revenues, taxes, development expenditures, operating expenses, and
quantities of recoverable gas and oil reserves to be encountered may vary
substantially from the engineers' estimates. Estimates of reserves also are
extremely sensitive to the market prices for natural gas and oil. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business and Properties--Reserves".

GOVERNMENT REGULATION AND ENVIRONMENTAL RISKS

The production and sale of oil and natural gas are subject to a variety of
federal, state and local government regulations that may be changed from time
to time in response to economic or political conditions. The regulations
concern, among other matters, the prevention of waste, the discharge of
materials into the environment, the conservation of natural gas and oil,
pollution, permits for drilling operations, drilling bonds, reports concerning
operations, the spacing of wells, the unitization and pooling of properties,
and various other matters including taxes. The Company currently has a dispute
with the Internal Revenue Service. Although the Company believes it will
prevail in its position, there can be no assurance of a favorable outcome. See
Note 11 to the Notes to Consolidated Financial Statements. Many jurisdictions
have at various times imposed limitations on the production of gas and oil by
restricting the rate of flow for gas and oil wells below their actual capacity
to produce. In addition, many states have raised state taxes on energy sources
and additional increases may occur, although there can be no certainty of the
effect that increases in state energy taxes would have on natural gas and oil
prices. Although the Company believes it is in substantial compliance with
applicable

9
<PAGE>

environmental and other government laws and regulations and to date such
compliance has not had a material adverse effect on the earnings or
competitive position of the Company, there can be no assurance that
significant costs for compliance will not be incurred in the future.
Compliance with environmental laws, including the preparation of environmental
assessments and impact statements, can delay drilling activity, thereby
potentially reducing revenue and cash flow. See "Business and Properties--Core
Areas of Activity--Rocky Mountain Region--Wind River Project".

THE COMPANY

The Company was organized as a Colorado corporation in 1980 under the name
AIMEXCO Inc. In December 1983, the Company acquired Barrett Energy Company,
which owned certain gas and oil interests. In 1984, the Company changed its
name to Barrett Resources Corporation, and in 1987 the Company changed its
state of incorporation from Colorado to Delaware. In 1995, Plains merged with
a subsidiary of, and became a wholly owned subsidiary of, the Company. The
executive offices of the Company are located at 1515 Arapahoe Street, Tower 3,
Suite 1000, Denver, Colorado 80202, and its telephone number at that address
is (303) 572-3900.

USE OF PROCEEDS

The net proceeds to the Company from the Offerings are estimated to be $91.9
million ($105.7 million if the Underwriters' over-allotment options are
exercised in full) after deducting underwriting discounts and estimated
offering expenses payable by the Company. The Company intends to use these net
proceeds to repay as much as possible of its line of credit, which had $100
million outstanding as of March 31, 1996, and to create additional capacity
under this line of credit, which, together with the Company's operating cash
flow, will be used to fund its planned exploration and development activities,
and for other general corporate purposes. Subject to management's
determination that there are attractive opportunities, the Company also may
use a portion of its bank line of credit and its operating cash flow to pursue
exploration and/or development opportunities in other areas as well as
selective acquisitions. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Capital Expenditures and Liquidity"; and
"Business and Properties--Core Areas of Activity".

The estimated amounts and uses set forth above indicate the Company's
intentions for use of the net proceeds from the Offerings. The Company may
reallocate the proceeds or utilize the proceeds for other gas and oil
opportunities the Company deems to be in its best interests, due to an
unforeseen change in circumstances concerning matters such as economic
conditions, availability of debt financing or the existence of a property
acquisition or development opportunity.

The Company's bank line of credit is a $200 million facility with a current
borrowing base of $160 million. The amount of the borrowing base at any time
is determined by the lenders with reference to the collateral value of the
Company's proved reserves. The borrowing base currently is being reviewed by
the lenders, and the Company expects to be notified of the updated borrowing
base level by June 30, 1996. As a result of the increase in the Company's
estimated reserves and sales prices from March 31, 1995 to December 31, 1995,
the Company expects an increase in its borrowing base. At the Company's
election at the time of borrowing funds, interest begins to accrue on those
funds either at the London interbank eurodollar rate (LIBOR) plus a spread
ranging from 0.5% to 1.0% (depending on the ratio of the Company's outstanding
borrowing to its borrowing base) or at the U.S. prime rate of interest. As of
March 31, 1996, the Company's outstanding balance under the line of credit was
$100 million, which was accruing interest at an average rate of 6.3%. The
Company is required to pay interest on a quarterly basis until the entire
outstanding balance matures on July 19, 1999. See "Capitalization" and
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations--Liquidity and Capital Resources".

10
<PAGE>

The portion of the outstanding line of credit that has been incurred during
the past year has been used by the Company primarily for its gas and oil
activities and also for certain costs related to the Plains merger.

The excess, if any, of net proceeds from the Offerings after paying the
outstanding balance of the Company's line of credit will be placed temporarily
in certificates of deposit, short-term obligations of the United States
government, or other money-market instruments that are rated investment grade
or its equivalent until used for the purposes described above.

PRICE RANGE OF COMMON STOCK

The Company's Common Stock is listed on the New York Stock Exchange (the
"NYSE") under the symbol "BRR". Prior to November 29, 1994, the Company's
Common Stock was traded on the NASDAQ National Market System under the symbol
"BARC". The following table sets forth the high and low sale prices of the
Common Stock for each of the quarters indicated:

<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
1994
First Quarter........................................... $14.375 $10.375
Second Quarter.......................................... 16.500 13.250
Third Quarter........................................... 20.000 15.625
Fourth Quarter.......................................... 22.750 17.875
1995
First Quarter........................................... 21.750 16.875
Second Quarter.......................................... 25.875 19.375
Third Quarter........................................... 25.375 19.375
Fourth Quarter.......................................... 30.625 21.000
1996
First Quarter........................................... 29.500 22.000
Second Quarter (through May 15, 1996)................... 28.375 24.125
</TABLE>

On May 15, 1996, the last reported sale price of the Common Stock as
reported on the NYSE was $24.25. As of May 15, 1996, there were approximately
4,907 stockholders of record of the Common Stock.

DIVIDEND POLICY

The Company has not paid any cash dividends since its inception. The Company
anticipates that all earnings will be retained for the development of its
business and that no cash dividends on its Common Stock will be paid in the
foreseeable future. In addition, the Company's bank line of credit restricts
payment of dividends during a quarter to amounts that are less than 50% of the
Company's average net income for the previous four quarters. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations".

11
<PAGE>

CAPITALIZATION

The following table sets forth the unaudited capitalization of the Company
as of March 31, 1996 and as adjusted to reflect the issuance and sale of
4,000,000 shares of Common Stock by the Company (assuming an initial public
offering price of $24.25 per share based on the last reported sale price as
reported on the NYSE on May 15, 1996 and after deduction of estimated
underwriting discounts and offering expenses payable by the Company) and the
application of the net proceeds therefrom. This table should be read in
conjunction with "Use of Proceeds", the Selected Consolidated Financial Data,
the Consolidated Financial Statements and notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1996
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................ $ 10,945 $ 10,945
======== ========
Long-term debt(1)........................................ $100,000 $ 8,125
Stockholders' equity:
Preferred stock, $0.001 par value: 1,000,000 shares
authorized, none issued and outstanding............... -- --
Common stock, $0.01 par value: 35,000,000 shares
authorized, 25,153,666 issued and outstanding;
29,153,666 issued and outstanding as adjusted(2)...... 252 292
Additional paid-in capital............................. 87,382 179,217
Retained earnings...................................... 109,346 109,346
Treasury stock, at cost................................ (467) (467)
-------- --------
Total stockholders' equity........................... $196,513 $288,388
-------- --------
Total capitalization................................. $296,513 $296,513
======== ========
</TABLE>
- --------
(1) See "Use of Proceeds" and Note 6 to Consolidated Financial Statements for
certain terms of the Company's bank line of credit.
(2) Does not include 1,189,131 shares of Common Stock issuable upon exercise
of outstanding stock options.

12
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations", the consolidated financial statements, notes
thereto and other information included elsewhere in this Prospectus and the
documents incorporated herein by reference. The selected financial data for
each of the three years in the period ended December 31, 1995 are derived from
consolidated financial statements of the Company, which have been audited by
Arthur Andersen LLP, independent public accountants. See "Experts". The data
presented for the three month periods ended March 31, 1995 and 1996 are derived
from the unaudited consolidated financial statements and include, in the
opinion of management, all normal and recurring adjustments necessary to
present fairly the data for such periods. Production data for all periods are
unaudited. Barrett's previously reported data for 1995 and prior years have
been restated to reflect the merger with Plains under the pooling of interests
method of accounting and the change in fiscal year end from September 30 to
December 31. The selected data provided below are not necessarily indicative of
the future results of operations or financial performance of the Company.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------- ---------------
1993 1994 1995(1) 1995 1996
-------- -------- -------- ------- -------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(2):
Revenues:
Oil and gas production........... $ 80,911 $ 78,794 $ 96,996 $24,981 $29,544
Trading revenues................. 22,955 28,114 28,554 7,788 11,993
Revenue from gas gathering....... 216 353 1,074 291 448
Interest Income.................. 736 864 714 153 197
Other income..................... 1,254 1,333 678 258 125
-------- -------- -------- ------- -------
Total Revenues................... $106,072 $109,458 $128,016 $33,471 $42,307
Operating expenses:
Lease operating expenses......... $ 30,383 $ 28,223 $ 34,525 $ 8,897 $10,947
Depreciation, depletion and
amortization.................... 20,185 22,760 33,480 8,100 9,404
Cost of trading.................. 21,675 27,190 27,611 7,452 11,214
General and administrative....... 11,194 13,261 13,426 3,629 3,618
Interest expense................. 725 942 4,631 941 1,551
Other expenses, net.............. 867 645 588 125 --
Merger and reorganization
expense......................... -- -- 14,161 -- --
-------- -------- -------- ------- -------
Total Expenses................... $ 85,029 $ 93,021 $128,422 $29,144 $36,734
Income (loss) before income taxes
and cumulative effect of change
in method of accounting for
postretirement benefits.......... $ 21,043 $ 16,437 $ (406) $ 4,327 $ 5,573
Provision for income taxes........ 6,721 5,138 1,834 1,313 2,117
-------- -------- -------- ------- -------
Income (loss) before cumulative
effect of change in method of
accounting for postretirement
benefits......................... $ 14,322 $ 11,299 $ (2,240) $ 3,014 $ 3,456
Cumulative effect of change in
method of accounting for
postretirement benefits, net of
tax.............................. (656) -- -- -- --
-------- -------- -------- ------- -------
Net income (loss)................. $ 13,666 $ 11,299 $ (2,240) $ 3,014 $ 3,456
======== ======== ======== ======= =======
Net income (loss) per common share
and common share equivalent
before change in method of
accounting for postretirement
benefits......................... $ 0.58 $ 0.46 $ (0.09) $ 0.11 $ 0.14
Net income (loss) per common share
and common share equivalent--
cumulative effect................ (.03) -- -- -- --
-------- -------- -------- ------- -------
Net income (loss) per common share
and common share equivalent...... $ 0.55 $ 0.46 $ (0.09) $ 0.11 $ 0.14
======== ======== ======== ======= =======
EBITDA(3)......................... $ 41,217 $ 39,275 $ 36,991 $15,903 $18,398
CASH FLOW STATEMENT DATA:
Cash flow from operations before
changes in working capital....... $ 40,484 $ 38,975 $ 33,390 $12,327 $13,560
Cash flow from operations after
changes in working capital....... 41,580 36,573 35,538 6,978 13,225
Additions to property, plant and
equipment........................ 45,488 95,589 82,758 18,252 22,173
</TABLE>

13
<PAGE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF MARCH 31, 1996
------------------- -----------------------
1994 1995 ACTUAL AS ADJUSTED(4)
--------- --------- -------- --------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital..................... $ 2,466 $ 3,686 $ 8,516 $ 8,516
Total assets........................ 310,952 340,412 361,727 361,727
Long-term debt...................... 53,000 89,000 100,000 8,125
Stockholders' equity................ 188,136 191,828 196,513 288,388
</TABLE>
- --------
(1) Excluding 1995 nonrecurring transaction costs relating to the Plains
merger totaling $14.2 million, income (loss) for the year ended December
31, 1995 would be $9.5 million, EBITDA would be $51.2 million, cash flow
from operations before changes in working capital would be $47.6 million,
and cash flow from operations after changes in working capital would be
$49.7 million. In addition, the effect of these nonrecurring costs was to
reduce net income per share for the year ended December 31, 1995 by $0.47.
EBITDA and cash flow from operations before changes in working capital are
not measures determined pursuant to GAAP nor are they alternatives to GAAP
income or cash flow provided by operations. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."
(2) Plains used the successful efforts method of accounting and adopted the
full cost method used by Barrett in the retroactively restated financial
statements. See Note 2 to Financial Statements.
(3) Reflects income before income taxes less interest income, plus interest
expense, plus depreciation, depletion and amortization expense. This data
does not purport to reflect any measure of operations or cash flow.
(4) As adjusted to give effect to the issuance and sale of 4,000,000 shares of
Common Stock offered hereby and the application of net proceeds therefrom.
See "Use of Proceeds".

14
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

On July 18, 1995, the Company consummated the merger of a wholly owned
subsidiary of the Company with Plains by issuing 12.8 million shares of its
Common Stock to the former Plains stockholders. As a result of this merger,
Plains became a wholly owned subsidiary of the Company. Also on July 18, 1995,
the Company changed its fiscal year end from September 30 to December 31. The
merger is being accounted for using the pooling of interests method. The
pooling of interests method combines previously reported results as though the
combination had occurred at the beginning of the periods being presented.
Merger costs have been expensed during the 1995 year. The financial statements
of the Company and Plains for 1993 through 1995 have been restated and
adjusted for the merger with Plains and the change in fiscal year end. Due to
this restatement, these financial statements are not comparable to the
financial statements for the same periods as previously presented by the
Company or Plains. The following discussion should be read in conjunction with
the Consolidated Financial Statements and Notes thereto presented elsewhere in
this Prospectus.

LIQUIDITY AND CAPITAL RESOURCES

CAPITAL EXPENDITURES. Capital expenditures were $82.8 million for the year
ended December 31, 1995 as compared to $95.6 million for the year ended
December 31, 1994. Assuming reasonably successful development drilling
results, the total capital expenditure budget for 1996, including expenditures
of $22.2 million made during the first quarter of 1996, would be $131 million.

CAPITAL SOURCES. The Company anticipates that the funds available from the
Company's operations and borrowings under the Company's bank line of credit,
together with cash flow from operations, should be sufficient to fund the
planned capital expenditures described above. At March 31, 1996, the Company
had cash and short-term investments of $10.9 million, working capital of $8.5
million, property and equipment of $313.3 million and total assets of $361.7
million. Compared to December 31, 1995, cash and short-term investments
increased $3.4 million, working capital increased $4.8 million and property
and equipment increased $12.7 million. Total assets increased by $21.3
million, funded by the Company's cash flow and by an $11.0 million increase in
long-term debt. During the first quarter of 1996, as well as during 1995, the
Company invested in its gas and oil properties in its core areas of activity,
which increased both property and equipment and long-term debt.

During the first quarter of 1996 and all of 1995, the Company generated
operating cash flow of $13.6 million and $33.4 million, respectively, before
working capital changes. After working capital changes, cash flow provided by
operations was $13.2 million and $35.5 million, respectively. Excluding merger
costs, cash flow from operations before working capital changes for 1995 was
$47.6 million ($49.7 million after working capital changes).

As of March 31, 1996 and December 31, 1995, respectively, the outstanding
balance under the bank line of credit was $100 million and $89 million, as
compared with $53 million at December 31, 1994. In July 1995, the Company
entered into a $200 million credit agreement. The line of credit matures on
July 19, 1999 and is funded by a consortium of six banks. The line of credit
is unsecured and provides for interest rates based on LIBOR or prime rates at
the Company's option. The borrowing base under the Credit Agreement is based
on the banks' review of the collateral value of the Company's gas and oil
properties. The current borrowing base is $160 million and was determined from
a review of the gas and oil reserves as of December 31, 1994 for Plains and
March 31, 1995 for Barrett. The borrowing base is scheduled for a review that
will be completed by June 30, 1996 and will be based on the Company's December
31, 1995 reserves. As a result of the increase in the Company's estimated
proved reserves and sales prices from March 31, 1995 to December 31, 1995, the
Company anticipates that this review will result in an increase in its
borrowing base.

15
<PAGE>

During the quarter ended March 31, 1996, the Company's capital expenditures
were $22.2 million, including an aggregate of $16.1 million invested in
development and expansion activities in the Piceance, Wind River, and Anadarko
Basins. During 1995, the Company invested $72.3 million in property and
equipment principally in the Piceance, Wind River and Arkoma Basins. The
Company's drilling activities were primarily to develop and extend producing
fields. Included in gas and oil property additions in 1995 is $7.4 million to
purchase interests in properties with proved reserves of an estimated 4.0 Bcf
of gas and 831,000 barrels of oil. In April 1996, the Company expended $2.7
million to acquire an estimated 16.6 Bcf of gas and issued 350,000 shares of
its Common Stock to acquire an additional 10% interest in the Grand Valley
Gathering System. See "Business and Properties--Recent Developments".

During 1995, the Company increased its gas reserves by 12% to 514 Bcf and
its oil reserves by 13% to 13.0 million barrels, thereby replacing 210% of its
1995 production. On an energy equivalent basis, the Company's reserves were
87% natural gas. Proved undeveloped reserves were 17% of the Company's total
reserves. As of December 31, 1995, 34% of the Company's reserves were located
in the Hugoton Embayment, 20% were located in the Piceance Basin, and 15% were
located in the Wind River Basin.

Reserve quantities increased 12% on an energy equivalent basis in 1995,
while the standardized measure of discounted future net cash flows increased
$67.3 million, or 28%, primarily due to reserve additions and increases in the
sales prices of gas and oil. As of December 31, 1995, the Company was
receiving an average of $1.77 per Mcf for its gas production and $17.35 per
barrel for its oil production. Reserve extensions and discoveries added $85.5
million to the standardized measure, and purchases of proved reserves added
$7.4 million to the valuation. In addition, the changes in sales prices and
production costs increased the standardized measure of discounted future net
cash flows by $24.6 million. These additions were offset by a $62.3 million
reduction due to reserves produced during the year and $33.2 million for
additional income taxes. The Company's reserve values remain sensitive to gas
prices in the current environment of fluctuating commodities prices.

From time to time the Company uses swaps to hedge the sales price of its
natural gas and oil. In a typical swap agreement, the Company and a counter
party will enter into an agreement whereby one party will pay a fixed price
and the other will pay an index price on a specified volume of production
during a specified period of time. Settlement is made by the parties for the
difference between the two prices at approximately the same time as the
physical transactions. The intent of hedging activities is to reduce the
volatility associated with the sales prices of the Company's gas and oil
production.

The Company's merger with Plains and its drilling activities have increased
its reserve base and its productive capacity and, therefore, its potential
cash flow. The Company intends to continue to develop and acquire gas and oil
properties in its areas of activity as dictated by market conditions and
financial ability. The Company retains flexibility to participate in gas and
oil activities at a level that is supported by its cash flow and financial
ability. Management believes that the Company's borrowing capacity and cash
flow are sufficient to fund its currently anticipated activities. The Company
intends to continue to make prudent use of financial leverage to fund its
operations on terms that management believes warrant investment of the
Company's capital resources.

Any additional equity issuances by the Company within 120 days after the
Offerings would require the approval of the representatives of the
Underwriters pursuant to the terms of the Underwriting Agreement between the
Company and the Underwriters. See "Business and Properties--Recent
Developments", "--Rocky Mountain Region--Piceance Basin" and "Underwriting".

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1996 AS COMPARED TO THREE MONTHS ENDED MARCH 31,
1995

The following discussion of operating results is based on historical
consolidated financial information that has been restated to reflect the
merger of the Company and Plains on July 18, 1995 under the pooling of
interests method of accounting.

16
<PAGE>

Net income for the quarters ended March 31, 1996 and 1995 was $3.5 million
($0.14 per share) and $3.0 million ($0.11 per share), respectively. This
increase is primarily due to increased gas and oil production revenue, a 6%
increase in average gas and oil sales prices, and a $443,000 increase in gross
profit from gas trading.

Total revenues for the quarter were $42.3 million, up 26% from $33.5 million
for the same period in 1995. This increase is attributable to higher
production revenues and a 54% increase in trading revenues.

Production revenue for the first quarter of 1996 increased 18% from $25.0
million to $29.5 million. Production revenues and related volumes and average
prices during the periods presented were as follows:

<TABLE>
<CAPTION>
QUARTER ENDED
MARCH 31,
---------------
1995 1996
------- -------
<S> <C> <C>
Gas Revenues (in thousands)............................... $18,296 $22,444
Gas Production (Bcf)...................................... 11.7 13.5
Average Price per Mcf..................................... $ 1.57 $ 1.67
Oil Revenues (in thousands)............................... $ 6,685 $ 7,100
Oil Production (MBbls).................................... 430 430
Average Price per Barrel.................................. $ 15.55 $ 16.51
</TABLE>

First quarter gas revenues increased 23% as compared with the same period in
1995, principally due to a 15% increase in production volumes and a 6%
increase in average gas prices.

The 6% increase in first quarter 1996 oil revenues from the same period in
1995 is directly attributable to a 6% increase in average oil prices.

For the quarter ended March 31, 1996, revenues from trading were $12.0
million compared to $7.8 million for the same period in 1995. The associated
costs of trading increased to $11.2 million from $7.5 million. Gross profit
from trading was $779,000 and $336,000 for the respective quarters ended March
31, 1996 and 1995.

To reduce its exposure to gas and oil price fluctuations, the Company enters
into hedging arrangements from time to time for both trading and producing
activities. During the first quarter ended March 31, 1996, the Company
recognized net production hedging expenses of $812,000, which were recorded in
the consolidated statements of income as adjustments of gas and oil production
revenue. As of March 31, 1996, the Company held positions to hedge 0.075 Bcf
of the Company's gas production and 91 MBbls of the Company's oil production.

Production costs increased due to increases in sales and higher operating
costs in the winter months in the first quarter.

Depreciation, depletion and amortization increased to $9.4 million from $8.1
million due to a 13% increase in gas and oil equivalent production. During the
1996 and 1995 quarters, depletion, depreciation and amortization was $0.56 and
$0.54 per Mcfe, respectively.

Interest expense for the first quarter increased from $0.9 million in 1995
to $1.6 million in 1996. Increases were attributable to additional borrowing
used principally to fund exploration, development and acquisition of gas and
oil properties.

The Company's largest source of operating income is from sales of its gas
and oil production. Therefore, the levels of the Company's revenues and
earnings are affected by prices at which natural gas and oil are being sold.
This is particularly true with respect to natural gas, which accounted for

17
<PAGE>

approximately 76% of the Company's production revenue for the first quarter of
1996. As a result, the Company's operating results for any prior period are
not necessarily indicative of future operating results because of the
fluctuations in gas and oil prices and the lack of predictability of those
fluctuations as well as changes in production levels.

YEAR ENDED DECEMBER 31, 1995 AS COMPARED TO YEAR ENDED DECEMBER 31, 1994

During 1995, the Company incurred a net loss of $2.2 million ($0.09 per
share) compared to net income of $11.3 million ($0.46 per share) in 1994. The
1995 results include merger and reorganization costs of $14.2 million.
Excluding these merger costs, the Company's net income after taxes would have
been $9.5 million ($0.38 per share).

Revenues increased 17% from 1994 to $128.0 million, and operating expenses,
including $14.2 million of merger and reorganization costs, increased 38% to
$128.4 million. Oil and gas production revenue increased 23% to $97.0 million.
Lease operating expenses increased $6.3 million and depreciation, depletion
and amortization increased $10.7 million.

Production revenues increased $18.2 million primarily due to a 43% increase
in gas production to 47.7 Bcf (130.7 MMcf per day). Oil production increased
32% to 1,702,000 barrels (4,660 barrels per day). Average gas sales prices
decreased 20% to $1.47 per Mcf, while average oil prices increased 13% to
$15.76 per barrel. Gas production accounted for 82% of total production on an
energy equivalent basis. The Hugoton Embayment and Piceance Basin properties
accounted for 37% and 14% percent, respectively, of total gas production. The
Powder River and Permian Basins accounted for 43% and 32%, respectively, of
total oil production. The decreased gas sales price was due to an overall
deterioration in gas markets during most of the year.

Lease operating expenses of $34.5 million was $0.60 per Mcfe compared to
$0.69 per Mcfe in 1994. Depreciation, depletion and amortization increased
$10.7 million primarily due to production increases. During 1995,
depreciation, depletion and amortization on gas and oil production was
provided at an average rate of $0.55 per Mcfe compared to an average rate of
$0.52 per Mcfe in 1994.

The gross margin on trading activities was virtually unchanged from 1994 at
$943,000. Gas trading volumes increased 26% to 22.2 Bcf in 1995.

During 1995, the Company hedged 4.9 Bcf (22%) of its gas trading volumes to
lock in margins on specific transactions at a cost of $2.1 million. In
addition, the Company hedged 11.0 Bcf (23%) of gas production for a net gain
of $417,000. The hedging gain related to production is net of $1.2 million for
an expense recorded in the fourth quarter due to a lack of correlation of the
hedging instruments to the underlying commodity as of December 31, 1995. The
Company enters into the hedging arrangements to reduce its exposure to price
risks associated with commodities markets. Although hedging transactions
associated with its production minimize the Company's exposure to losses as a
result of unfavorable price changes, the transactions also limit the Company's
ability to benefit from favorable price changes. At the end of December, 1995,
the basis differential between the commodities markets and the market price of
the Company's gas widened to historic levels. Because the increase in the
commodities price was not accompanied by a similar increase in the market
price of the Company's gas, the Company recorded an expense for the difference
due to the inefficient hedge and positions that did not qualify for hedge
accounting treatment. With respect to trading activities, the Company
generally will not enter into a commitment for either a purchase or a sale
unless (i) it has established a commitment for an offsetting sale or purchase,
or (ii) it has established a hedge arrangement with a counter party that
creates the same matching position.

18
<PAGE>

General and administrative expenses of $13.4 million were 1% greater than
the previous year. The 1995 amount is net of $3.8 million of operating fee
recoveries compared to a $3.4 million recovery in 1994. General and
administrative expense in 1995 is generally a combination of the separate
companies' expenses, because the integration of the two entities did not occur
until late in the year and included costs for the Company to expand its
business in existing and new activity areas. The Company expects to eliminate
duplicative costs in 1996. Interest expense increased significantly from $0.9
million in 1994 to $4.6 million in 1995 as the Company financed a portion of
its growth with bank debt. The Company incurred a 1995 expense of $14.2
million to combine Barrett and Plains and to integrate the separate companies'
operations. The costs consist primarily of $7.4 million of investment banker
and other professional fees to evaluate and consummate the merger and
$5.6 million for employee termination and benefit costs. See "Underwriting".

During 1995, the Company recorded a $1.8 million income tax expense even
though it incurred a loss before taxes due to non-deductible merger costs.
Excluding non-deductible merger costs, the Company would have had a $600,000
tax benefit.

The Company's results of operations depend primarily on the production of
natural gas which accounted for 87% of the Company's reserves and 82% of its
production during 1995. Therefore, the Company's future results will depend on
both the volume of natural gas production and the sales price for gas. The
Company continues to explore for gas and oil to increase its production. The
lack of predictability of both production volumes and sales prices may
influence future operating results.

YEAR ENDED DECEMBER 31, 1994 AS COMPARED TO YEAR ENDED DECEMBER 31, 1993

During 1994, the Company earned net income of $11.3 million ($0.46 per
share) compared to net income of $13.7 million ($0.55 per share) in 1993. The
1994 results include a tax benefit of $2.1 million due to an increase in
financial reporting value of the Company's net operating loss carryover.
Without the tax benefit from the net operating loss carryover, the Company's
net income after taxes in 1994 would have been $9.2 million ($0.37 per share).
The 1993 results include a tax benefit of $1.4 million from the value of the
tax loss carryover and an expense of $656,000 for the cumulative effect of
adopting Statement No. 106 of the Financial Accounting Standards Board to
recognize accumulated postretirement benefit liabilities as of January 1,
1993. Net income before income taxes and the cumulative effect of the change
in accounting method was $16.4 million in 1994 compared to $21.0 million in
1993.

Revenues increased 3% from 1993 to $109.5 million, and operating expenses
increased 9% to $93.0 million. Production revenue decreased $2.1 million, and
trading revenues increased $5.2 million. These changes were offset by a
decrease of $2.1 million in lease operating expenses, an increase of $2.6
million in depreciation, depletion and amortization and an increase of $5.5
million in the cost of trading.

Production revenues decreased $2.1 million as a 5% increase in gas
production was offset by a 6% decrease in the average gas sales price and a 7%
decline in the average oil sales price. Oil production was virtually unchanged
from 1993 to 1994. During 1994, the Company produced 91.2 MMcf of gas per day
and 3.5 MBbls of oil per day. Gas production accounted for 81% of total
production on an energy equivalent basis of 41.0 Bcfe. During 1994, the
average gas sales price was $1.83 per Mcf ($1.94 in 1993) and the oil sales
price was $13.95 per barrel ($14.93 in 1993). The decreased gas and oil sales
prices were due to an overall market reduction in the commodity prices of the
products.

Lease operating expenses of $28.2 million averaged $0.69 per Mcfe compared
with $0.77 per Mcfe in 1993. Depreciation, depletion and amortization
increased $2.6 million primarily due to

19
<PAGE>

production increases. During 1994, depreciation, depletion and amortization
was $0.52 per Mcfe compared to $0.48 per Mcfe in 1993.

The gross margin on trading activities decreased to $924,000 from $1.3
million in 1993. Gas trading volumes increased 62% to 17.5 Bcf in 1994. The
reduced results were due to a reduction of margins available for gas trading
activities.

General and administrative expenses of $13.3 million were 18% greater than
the previous year. The 1994 amount is net of $3.4 million of operating fee
recoveries compared to a $2.9 million recovery in 1993. The increased general
and administrative expense was due to additional costs incurred by the Company
to expand its activities and to explore in other areas.

During 1994, the Company recorded a $5.1 million net income tax expense
compared to a $6.7 net income tax expense in 1993. The 1994 expense is net of
a $2.1 million reduction in the valuation allowance provided for the deferred
income tax benefit of the net operating loss carryover.

20
<PAGE>

BUSINESS AND PROPERTIES

OVERVIEW

The Company concentrates its activities in core areas in which it has
accumulated detailed geologic knowledge and developed significant management
expertise. The Company has developed and continues to build on its interests
in the Piceance Basin in northwestern Colorado, the Anadarko and Arkoma Basins
in Oklahoma and the Wind River Basin in Wyoming. As a result of the July 1995
merger with Plains, the Company acquired significant interests in the Hugoton
Embayment in Kansas and Oklahoma, the Permian Basin in Texas and New Mexico,
and the Powder River Basin in Wyoming. Recently, the Company expanded into the
Louisiana and Texas Gulf Coast area and the shallow waters of the Gulf of
Mexico. At December 31, 1995, these principal areas of focus represented an
aggregate of approximately 93% of the Company's estimated proved reserves.

In addition to these development drilling programs, the Company is engaged
in several exploration projects in the Wind River and Anadarko Basins and the
Gulf Coast/Gulf of Mexico area. Barrett believes these projects will enhance
its reserve base and financial position, although there can be no assurance
this will occur. The Company also is evaluating opportunities to develop
expertise and undertake exploration in selected international projects.

As of December 31, 1995, the Company owned interests in 2,057 producing
wells and operated 1,061, or 52%, of these wells. These operated wells
contributed approximately 90% of Barrett's 1995
gas and oil production. The Company also owns interests in and operates a gas
gathering system, a 27-mile pipeline and a gas processing plant in the
Piceance Basin, and three smaller gas gathering systems in Oklahoma, Wyoming
and Utah. See "--Gas Gathering".

Barrett markets all of its own gas and oil production from wells that it
operates. In addition, the Company engages in natural gas trading activities,
which involve purchasing gas from third parties and selling gas to other
parties at prices and volumes that management anticipates will result in
profits to the Company. Through these trading activities, the Company obtains
knowledge and information that enables it to more effectively market its own
production. See "Risk Factors" and "--Gas and Oil Marketing and Trading".

BUSINESS STRATEGY

Barrett's business strategy is to generate strong growth in reserves,
production, earnings and cash flow through exploration, development and
selective acquisitions of gas and oil properties in core areas of activity.
The Company implements this strategy through the following:

21
<PAGE>

SPECIALIZED GEOLOGIC EXPERTISE. Both the CEO and President of Barrett are
experienced, practicing geologists. They have established a team of geologists
and geophysicists with expertise in the Company's core areas of activity.
Prior to undertaking projects in new areas, the Company assembles specialized
geologic expertise to identify and evaluate drilling prospects.

FINANCIAL FLEXIBILITY. The Company is committed to maintaining financial
flexibility in order to pursue exploration and development activities and take
advantage of selective acquisition opportunities that may arise. The
Offerings, and the resulting reduction of debt, will enhance Barrett's
financial flexibility by further strengthening its balance sheet. See
"Capitalization".

RECENT DEVELOPMENTS

On March 6, 1996, the Company announced a 1996 capital expenditure budget of
$131 million, which is contingent upon market conditions and other factors.
Total 1996 budgeted expenditures include approximately $24 million for the
Wind River Basin, $13 million for the Piceance Basin, $22 million for the
Anadarko Basin, $18 million for the Arkoma Basin, $14 million for the Gulf
Coast/Gulf of Mexico, $1 million for international projects, $20 million for
exploration and development activities in other areas, and $19 million for
possible acquisitions, primarily in the Company's strategic core areas. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "--Core Areas of Activities".

At the April 24, 1996 Central Gulf of Mexico Federal Offshore Lease Sale,
the Company joined United Meridian Corporation in submitting winning bids on
nine blocks in the West Cameron, East Cameron, Vermilion, South Marsh Island
and Eugene Island areas. The Company will have a 22.22% working interest in
each of these nine blocks. Separately, the Company joined with Norcen
Explorer, Inc., with a 50% working interest, in submitting the winning bid for
Ship Shoal Block 235, and the Company independently submitted the winning bid
for West Cameron Block 211. All bids are subject

22
<PAGE>

to final approval by the Mineral Management Service. If the bids are approved,
total bonus payments, net to the Company, for these lease interests will be
$2.3 million. In addition, to support its Gulf Coast/Gulf of Mexico
activities, the Company established an office in Houston, Texas in January
1996. See "--Southern Region--Gulf Coast/Gulf of Mexico".

In April 1996, the Company acquired, for $2.7 million from Zenith, all of
Zenith's Piceance Basin gas and oil interests, with an estimated 16.6 Bcf of
proved natural gas reserves. In addition, the Company acquired all the stock
of GVC in exchange for 350,000 shares of the Company's Common Stock. The sole
asset of GVC is an approximate 10% interest in the Grand Valley Gathering
System. The Company previously has owned interests in and is the operator of
both the gathering system and the gas and oil assets in which it acquired
interests as a result of these transactions. The Company has agreed to file a
registration statement covering the sale of the shares received by the GVC
shareholders in the GVC transaction. The 10% portion of these shares owned by
Mr. Buford are subject to the 120 day lock-up described under "Underwriting".
See "--Rocky Mountain Region--Piceance Basin".

Mr. C. Robert Buford, a director of the Company, owns 89% of Zenith. In
addition, at the time of the GVC transaction, Mr. Buford served as a director
of GVC and owned 10% of GVC. The other 90% of GVC was owned at that time by
Mr. Buford's three adult children. Due to these relationships, the terms of
these transactions with Zenith and GVC were negotiated on behalf of the
Company by a Special Committee of the Board of Directors of the Company,
consisting of four independent outside directors. The Company also obtained an
opinion from an investment banking firm that the terms of these transactions
were fair to the Company. See "Underwriting".

23
<PAGE>

CORE AREAS OF ACTIVITY
The Company has organized its existing gas and oil activities into three
regional core areas: the Rocky Mountain, Mid-Continent and Southern Regions.

[CORE AREAS OF ACTIVITY MAP APPEARS HERE]

The following table sets forth certain information concerning these core
areas of activity:
<TABLE>
<CAPTION>
1996
ESTIMATED PROVED CAPITAL
RESERVES AT 1995 EXPENDITURE
DECEMBER 31, 1995 PRODUCTION BUDGET
BASIN OR FIELD (BCFE) (BCFE) (IN MILLIONS)(1)
-------------- ----------------- ---------- ----------------
<S> <C> <C> <C>
Rocky Mountain Region
Wind River...................... 88.1 7.0 $ 23.6
Piceance........................ 119.1 7.4 12.6
Powder River.................... 30.0 4.8 9.2
Green River..................... 12.5 2.4 3.0
Mid-Continent Region
Hugoton Embayment............... 200.7 17.6 $ 0.9
Arkoma.......................... 27.4 4.4 17.8
Anadarko........................ 33.7 4.5 21.9
Southern Region
Permian......................... 39.1 5.3 $ 5.1
Gulf Coast/Gulf of Mexico....... 8.7 2.1 14.4
Other(2).......................... 32.0 2.4 $ 22.2
----- ---- ------
Total......................... 591.3 57.9 $130.7
===== ==== ======
</TABLE>
- --------
(1) All budgeted expenditures are for exploration and development except for
$19.5 million for acquisitions included under "Other".
(2) Includes Uinta, Nevada and international projects. Also includes 1996
capital budget of $19.5 million for acquisitions.

24
<PAGE>

ROCKY MOUNTAIN REGION

WIND RIVER BASIN. In 1994, following its major natural gas discovery in the
Cave Gulch Field, the Company began a focused exploration program in the Wind
River Basin of Wyoming, particularly along the Owl Creek Thrust fault.

Cave Gulch Field. In August 1994, the Company drilled the Cave Gulch Federal
Unit #1 well and discovered a significant natural gas field in the Fort Union
and Lance Sandstones below the Owl Creek Thrust. In September 1994, the
Company acquired additional interests, thereby increasing its working interest
in the well and the 440-acre Cave Gulch Unit from 72% to 94%. The Company owns
working interests from 40% to 100% in the surrounding area and owns leasehold
interests in 15,687 gross and 7,839 net acres in the Cave Gulch area.

During 1995, the Company drilled and set production casing on eight wells in
the Cave Gulch Federal Unit Nos. 2, 3, 4, 7, 8, 9, 11 and 13. All eight wells
have been completed in various intervals from the Fort Union, Lance and
Meeteetse Formations. Combined daily production for the Cave Gulch Field at
year end 1995 was 52 MMcf of natural gas and 232 barrels of oil. As of
December 31, 1995, the Field had a total cumulative production of 9 Bcf of
natural gas and 52,000 barrels of oil. The Company owns a 94% working interest
in each of these eight wells.

In December 1995, the Company drilled the Cave Gulch #15, a 12,661-foot twin
to the Cave Gulch Unit #1 well, to probe for deeper Mesaverde and Cody
Sandstones of the Upper Cretaceous Age. Production pipe was run to total depth
in the well. However, due to requirements of the Cave Gulch environmental
assessment, completion of testing has been delayed until the summer of 1996.
The Company owns a 90.62% working interest below the shallower Lance
Formation, which, subsequent to completion, will be reduced to 58.13%.

During 1996 the Company plans to drill a well in Cave Gulch to test the
deeper Frontier, Muddy, Dakota and Lakota Formations. Because of the multiple
formations prevalent in the Wind River Basin, Barrett can reduce the risk of
testing these deeper formations by attempting to develop the shallower Fort
Union, Lance and Meeteetse Formations in the same well.

During 1996, the Company had planned to drill up to 10 wells. However, the
Bureau of Land Management has determined that an environmental impact
statement in the greater Cave Gulch area will be required to assess future
development proposals from the Company and other operators in the area. The
Company believes that certain locations could be drilled in the Cave Gulch
area during the environmental impact statement process, and the Company will
proceed accordingly.

Effective March 1, 1996, the Company augmented its Cave Gulch position by
purchasing for $3.62 million a 5% working interest in 15 wells (12 producing,
two waiting on completion, and one shut-in) operated by a third party.

The Company's gas production is currently constrained to a production rate
of approximately 60,000 MMBtu per day due to pipeline take-away capacity in
the Cave Gulch area of operation and the Wind River Basin. Two interstate
pipelines serve the Cave Gulch area, and both have proposed expansions to
increase their take-away capacity. The Company is supporting these expansion
proposals with transportation volume commitments. Both pipeline expansions are
scheduled for completion during the first half of 1997. See "--Gas and Oil
Marketing and Trading".

Owl Creek Thrust. The Company continues to evaluate additional exploration
prospects in the Owl Creek Thrust and central Wind River Basin. The Company
has 80,100 gross and 62,222 net acres under lease outside of the Cave Gulch
area.

For the year ended December 31, 1995, the Wind River Basin represented 15%
of the Company's estimated proved reserves and 12% of the Company's total
production. In 1996, 18% of Barrett's $131 million capital expenditure budget
is planned to be spent in the Wind River Basin for development, leasehold
acquisition, seismic surveys and exploration, including participating in
drilling up to 21 wells.

25
<PAGE>

PICEANCE BASIN. The Piceance Basin of northwestern Colorado is a core
operating area for the Company and will continue to be very prominent in the
Company's capital spending plans. The Company's activities in the Piceance
Basin are conducted primarily in three fields: Parachute, Rulison and Grand
Valley. In addition, the Company has small projects in the Trailridge area and
the Story Gulch Federal Unit.

The Company's drilling activities in the Piceance Basin primarily target the
lenticular sandstones of the Williams Fork Formation of the Mesaverde Group.
These sandstone reservoirs overlie the blanket sandstones of the Iles
Formation in the basal Mesaverde. Barrett drilled its first well in the
Piceance Basin in 1984. At present, the Company owns interests in and operates
267 wells in the Piceance Basin. The Company also operates and owns an
interest in the Grand Valley Gathering System, an approximate 150-mile
pipeline gathering system with related production and compression facilities,
a 27-mile pipeline and a gas processing plant in the Piceance Basin.

The Company is currently negotiating the purchase of an additional 5%
working interest in the Piceance Basin gas and oil properties and an
additional 5% working interest in the Grand Valley Gathering System for up to
235,000 shares of Common Stock. There can be no assurance this transaction
will be consummated.

In February 1995, the Company received approval for 40-acre well density by
the Colorado Oil and Gas Conservation Commission with respect to 81 640-acre
sections in the Parachute, Rulison and Grand Valley Fields. The Company has
completed the drilling of two three-well test programs on 40 acres in the
Rulison and Grand Valley Fields.

For the year ended December 31, 1995, the Piceance Basin represented 20% of
the Company's estimated proved reserves and 13% of the Company's total
production. In 1996, the Company intends to spend 10% of its capital
expenditure budget in the Piceance Basin for development and exploration,
including participating in drilling up to 23 wells and six recompletions. The
Company currently is continuously operating one drilling rig in the Basin.

POWDER RIVER BASIN. The Powder River Basin in Wyoming is primarily an oil
province, with production from Cretaceous and Permian-age formations. One of
the reservoir targets in this area is the Permian Minnelusa Formation. This
Basin contributes nearly one-half of the Company's daily oil production and
further activity will concentrate on development drilling and enhanced
recovery projects utilizing 3-D seismic technology where appropriate.

The Company has initiated or is planning the use of alkaline surfactant
polymer ("ASP") technology to chemically enhance oil recovery in a number of
fields. The Company also is using 3-D seismic technology to identify
development opportunities in this area. The Company is targeting the North
Adon Road, West Rozet, Rozet Minnelusa Unit, South Rozet, Cambridge Unit, West
Moran, East Moran, Wallace, Bracken and Powell Fields.

For the year ended December 31, 1995, the Powder River Basin represented 5%
of the Company's estimated proved reserves and 8% of the Company's total
production. In 1996, Barrett intends to spend 7% of its capital expenditure
budget for development, enhanced recovery projects utilizing 3-D seismic
technology, and exploration opportunities in the Powder River Basin, including
participating in drilling up to 16 wells.

GREEN RIVER BASIN/WYOMING OVERTHRUST. The Company owns leasehold interests
within the greater Green River Basin, primarily in the Moxa Arch, Rock Springs
Uplift and Wamsutter Arch areas, and in the Wyoming Overthrust Trend. The
Company participated in one well in the Green River Basin and one well in the
Wyoming Overthrust in 1995. For the year ended December 31, 1995, the Green

26
<PAGE>

River Basin represented 2% of the Company's estimated proved reserves and 4%
of the Company's total production. In 1996, the Company intends to spend 2% of
its capital expenditure budget in drilling up to 10 wells in the Green River
Basin in 1996.

UINTA BASIN. The Company purchased an interest in the Brundage Canyon Field,
located in the Uinta Basin in Duchesne County, Utah, in December 1995 for $4.6
million. The Company made additional acquisitions totaling $0.6 million in
this area during the first four months of 1996. As a result of these
acquisitions, the Company currently owns working interests ranging from 49% to
100% in 20 producing wells, a pipeline gathering and transmission system, and
24,660 gross acres, approximately 21,700 net acres, all of which are on the
Ute Indian Reservation. Since discovery, the Brundage Canyon Field has
produced 1,270 MBbls of oil and is currently producing 300 barrels of oil and
750 Mcf of gas per day, primarily from multiple sandstone reservoirs of the
lower Green River Formation at depths averaging 5,500 feet. Individual wells
in the area can have a primary recovery of over 200 MBbls of black wax crude
oil, which can command a premium price over posted prices.

The Company plans extensive work in this Field during 1996, including a 12-
well program to develop infill and field extension locations, a 40-acre pilot
waterflood project, and recompletions and workovers of existing wells to test
the viability of shallower horizons for potential future development. Deeper
gas bearing Wasatch and Mesaverde reservoirs are also prospective and will be
tested in the future.

MID-CONTINENT REGION

HUGOTON EMBAYMENT. The largest single producing area for the Company is the
Hugoton Embayment, which is one of the largest gas producing areas in the
United States, located in southwest Kansas, the Oklahoma panhandle, and the
Texas panhandle. The Company produces gas from three fields in the Hugoton
Embayment: the Hugoton, the Guymon-Hugoton and Panoma Fields. For the year
ended December 31, 1995, the Hugoton Embayment represented 34% of the
Company's estimated proved reserves and 30% of the Company's total production.

Hugoton and Guymon-Hugoton Fields. In the Hugoton and Guymon-Hugoton
Fields, the Company has working interests in 357 gross wells and operates 304
of them. The Hugoton and the Guymon-Hugoton Fields produce from the Chase
Formation.

Panoma Field. Panoma is the field designation for gas produced from the
Council Grove Formation, a formation immediately beneath the Chase Formation.
The Council Grove Formation has similar reservoir rocks as the Chase
Formation. However, the productive limits are not as extensive. Presently, the
Company has a working interest in 54 gross Panoma wells and operates 50 of
those wells.

Gas Sales Agreement. The majority of the Company's gas production in
southwest Kansas is sold under a long-term contract (life-of-field) to KN Gas
Supply Services, Inc. ("KNGSS"). Among other things, this contract provides
for annual re-determination of the price the Company is to receive. In 1996,
the price is calculated each month by using the average price of a basket of
four Mid-Continent indices less a variable amount not to exceed $0.20 per
MMBtu.

Net Profit Agreements. The Company produces natural gas in the Guymon-
Hugoton Field under a Dry Gas Agreement with Chevron U.S.A. Inc. ("Chevron").
This agreement allows the Company to expend funds for the operation of the
properties (including the cost of drilling wells) and to recoup the funds so
expended from current production income. Eighty percent of net operating
income generated by the natural gas production (after operational costs are
recouped, including the cost of drilling and equipping wells) is then paid to
Chevron. At December 31, 1995, the Company had interests in 56 wells under the
terms of this agreement.

27
<PAGE>

The Company also produces natural gas in the Hugoton Field under various
agreements similar to the Chevron agreement, except that net operating income
is allocated 15% to the Company and 85% to other parties. At December 31,
1995, the Company had interests in 48 Chase Formation wells and eight Council
Grove Formation wells under these agreements.

The third party interests under all the net profit agreements are treated as
lease operating expenses by the Company. Additional or replacement wells
drilled on the properties, including wells drilled under the infill drilling
program in the Hugoton Field, would be operated under the same terms and
conditions as existing wells, and would result in the commencement of the
80/20 or 85/15 net operating income allocation after the cost of the new wells
is recovered.

Hugoton Gas Trust Agreement. Natural gas rights established in 1955 to
approximately 50,000 partially developed acres in Finney and Kearny Counties,
Kansas were transferred to Plains by K N Energy, Inc. ("K N") on October 1,
1984 subject to a natural gas payment of $0.06 per Mcf for natural gas
produced from the acreage. Quarterly payments are made by Plains to the
Hugoton Gas Trust, a publicly held trust created in 1955. Payments terminate
when the estimated gross recoverable natural gas reserves decline to 50 Bcf or
less. As of December 31, 1995, the gross proved natural gas reserves
attributable to the leases burdened by this agreement were estimated to be
176.4 Bcf. The natural gas payments are treated as lease operating expenses by
the Company. At December 31, 1995, the Company had working interests in 196
wells that were subject to such payments. Any additional natural gas wells
drilled on this acreage also will be subject to the $0.06 payment per Mcf of
natural gas produced.

Barrett intends to spend $0.9 million of its 1996 capital expenditure budget
on the Hugoton Embayment for development drilling and increased deliverability
through compression, including participating in drilling six new wells.

ARKOMA BASIN. Due to the complex structure and overlapping nature of the
rock formations, the Company has been using and will continue to use 3-D
seismic surveys extensively in the Arkoma Basin in Oklahoma. In 1995, Barrett
participated in the drilling of 16 wells in the five main focus areas of the
Arkoma Basin in Oklahoma: Red Oak Field, Limestone Ridge area, White Ranch
Field, Wilburton Field and the Choctaw Thrust 3-D area. Additionally, the
Company entered two new areas in 1995 with acquisitions of non-producing
leaseholds and of producing properties in the Choctaw Thrust 3-D area
extension and the South Panola 3-D area. For the year ended December 31, 1995,
the Arkoma Basin represented 5% of the Company's estimated proved reserves and
8% of the Company's total production.

Development and exploration drilling are the Company's priorities for Arkoma
in 1996. Barrett intends to spend 14% of its 1996 capital expenditure budget
in the Arkoma Basin, including participating in drilling up to 19 wells,
together with land and seismic surveys.

ANADARKO BASIN. Since 1993, the Anadarko Basin in southwestern Oklahoma has
been one of the Company's most active drilling areas. In 1995, the Company
participated in the drilling of 32 wells with working interests ranging from
1.5% to 100% after payout. While staying active in the Strong City Red Fork
Play, the Company has become increasingly active in the Mountain Front Granite
Wash play and the Sentinel Field area. For the year ended December 31, 1995,
the Anadarko Basin represented 6% of the Company's estimated proved reserves
and 8% of the Company's total production.

Barrett plans to spend 17% of its 1996 capital expenditure budget in the
Anadarko Basin for development and exploration drilling, including
participating in drilling up to 74 wells, together with leasehold acquisitions
and seismic surveys as currently planned.

28
<PAGE>

SOUTHERN REGION

PERMIAN BASIN. The Permian Basin in west Texas and southeast New Mexico is
primarily an oil province. The Company's activities in 1995 in the Permian
Basin included the final phases of exploratory drilling and a continuing
effort in development drilling. As of December 31, 1995, the Company had an
interest in 300 gross wells (225 net wells) located in the Permian Basin,
which produce approximately 1,100 net barrels of oil per day. The primary
areas of production for the Company are in the South Cowden Field, Spraberry
Trend area, Novice Field and North Knox City Field in Ector, Midland, Martin,
Coleman and Knox Counties, Texas, respectively, and the Teague Field in Lea
County, New Mexico. In 1995, Barrett participated in drilling 17 wells in the
Permian Basin. For the year ended December 31, 1995, the Permian Basin
represented 7% of the Company's estimated proved reserves and 9% of the
Company's total production.

The Company's potential plans for the Permian Basin include waterflood,
enhanced oil recovery projects and development drilling opportunities. Barrett
intends to spend 4% of its 1996 capital expenditure budget in the Permian
Basin, including participating in drilling up to 21 wells.

GULF COAST/GULF OF MEXICO. The Company recently has established a new core
area in the Louisiana and Texas Gulf Coast area and the shallow waters of the
Gulf of Mexico. The Company believes that this area has significant reserve
potential and is well suited to its exploration emphasis and geologic
expertise. The availability of extensive 3-D seismic coverage over most of the
Outer Continental Shelf, the frequency of lease sales and the turnover of
expiring leases also make the Gulf of Mexico an attractive area. In addition,
wells in the Gulf of Mexico typically produce at higher rates, which increases
cash flow, but have relatively shorter productive lives. This production
profile will complement the Company's long-lived, relatively lower
deliverability wells in the Rocky Mountain and Mid-Continent regions. Finally,
Gulf Coast/Gulf of Mexico natural gas prices historically have been higher
than prices in other regions in which the Company operates. For the year ended
December 31, 1995, the Gulf Coast/Gulf of Mexico represented 1% of the
Company's estimated proved reserves and 4% percent of the Company's total
production.

The Company's strategy in the Gulf Coast/Gulf of Mexico is to participate
with established operators to identify and drill high quality prospects. At
the April 24, 1996 Central Gulf of Mexico Federal Offshore Lease Sale, the
Company joined United Meridian Corporation in submitting winning bids on nine
blocks in the West Cameron, East Cameron, Vermilion, South Marsh Island and
Eugene Island areas. The Company will have a 22% working interest in each of
these nine blocks. Separately, the Company joined with Norcen Explorer, Inc.,
with a 50% working interest, in submitting the winning bid for Ship Shoal
Block 235, and the Company independently submitted the winning bid for West
Cameron Block 211. All bids are subject to final approval by the Mineral
Management Service. If the bids are approved, total bonus payments, net to the
Company, for these lease interests will be $2.3 million. The Company
anticipates drilling one or more of these blocks beginning in the second
quarter of 1997.

Barrett intends to spend 11% of its 1996 capital expenditure budget in the
Gulf Coast/Gulf of Mexico area for development and exploration opportunities,
including participating in drilling up to 10 wells, together with land and
seismic surveys.

GAS GATHERING

The Company currently owns interests in and operates three gas gathering
systems through its wholly owned subsidiary, Bargath Inc. ("Bargath"). All
three systems connect to producing wells in which the Company owns interests.
The Company also owns various gathering assets in the Hugoton Field through
another wholly owned subsidiary, Plains Petroleum Gathering Company. The
Company believes that these assets enable the Company to better control the
costs and marketing of its production.

29
<PAGE>

GRAND VALLEY GATHERING SYSTEM. In 1985, Bargath designed and constructed a
gathering system in the Grand Valley Field to transport natural gas from
certain of the Company's wells to Questar Pipeline Corporation's interstate
pipeline. This gathering system subsequently has been expanded to
approximately 150 miles, and a 16-inch, 27-mile pipeline has been added. As of
December 31, 1995, the Grand Valley Gathering System was connected to 210
producing gas wells in the Piceance Basin. The system now has the flexibility
to deliver gas to three interstate pipelines, owned by Questar Pipeline
Company, Northwest Pipeline Corporation and Colorado Interstate Gas Company,
and one intrastate pipeline owned by Public Service Company of Colorado and K
N.

In December 1994, the Company completed the construction of a 90,000 MMBtu
per day gas processing plant to extract liquid hydrocarbons from the gas
stream. Depending on the take-away capacity from time to time of these four
pipeline systems, the gathering system has the capability of delivering
approximately 110,000 MMBtu of gas per day. The Company, which is the operator
for these systems in the Piceance Basin, increased its interest in the systems
to 39.5% when it acquired an additional 10% interest in April 1996. See
"Business and Properties--Recent Developments" and "--Rocky Mountain Region--
Piceance Basin".

LATHAM DRAW GATHERING SYSTEM. During fiscal 1992, Bargath designed and
constructed a gas gathering system in southwestern Wyoming to connect wells
drilled and completed by the Company on the Red Desert-Washakie prospect. To
date, the system consists of approximately 30 miles of pipeline connecting
seven gas wells. The Latham Draw Gathering System interconnects with the
Colorado Interstate Gas Company interstate pipeline. Bargath owns a 48%
interest in and operates this system. At April 30, 1996, the Company was
negotiating to exchange these assets for assets that were more closely aligned
to its core needs.

BLUE MOUNTAIN GATHERING SYSTEM The Company acquired the Blue Mountain
Gathering System in January 1995 to complement drilling activity Barrett was
conducting in Latimer County, Oklahoma. The 5 1/2-mile system moves Barrett's
and third party gas into NorAm Gas Transmission System for flow to Midwest and
East Coast markets.

GAS AND OIL MARKETING AND TRADING

Barrett markets all of its own gas and oil production from wells that it
operates. In addition, the Company engages in natural gas trading activities,
which involve purchasing gas from third parties and selling gas to other
parties at prices and volumes that management anticipates will result in
profits to the Company. Through these trading activities, the Company obtains
knowledge and information that enables it to more effectively market its own
production. See "Risk Factors--Volatility of Prices and Availability of
Markets" and "--Other Industry and Business Risks".

NATURAL GAS. The Company has entered into a number of gas sales agreements
on behalf of itself and its industry partners with respect to the sale of gas
from its properties in each of the Company's basins. These contracts vary with
respect to their specific provisions, including price, quantity, and length of
contract. As of May 1, 1996, less than 5% of the Company's production was
committed to gas sales contracts that had fixed prices. However, with the
exception of one contract covering approximately 2,000 MMBtu per day of gas
production from the Piceance Basin through 2011, none of the contracts
provides for fixed prices beyond May 1997. The Company believes that it has
sufficient production from its properties to meet the Company's delivery
obligations under its existing gas sales contracts.

The Company has entered into a series of firm transportation agreements with
various Rocky Mountain pipeline companies. These transportation arrangements
have terms ranging from one year to ten years. These various transportation
agreements provide the Company the opportunity to

30
<PAGE>

transport its Rocky Mountain gas production from a current low priced
environment. These agreements in total provide transportation of approximately
35% of the Company's current daily Rocky Mountain production.

In addition, the Company has entered into transportation arrangements to
support future expansions of Rocky Mountain interstate pipelines. These
expansions are designed to transport Rocky Mountain gas production to the Mid-
Continent region for sale. The Company has committed to 35,000 MMBtu per day
of pipeline capacity for terms ranging from five years to 10 years. These
expansions are subject to Federal Energy Regulatory Commission approval and
are scheduled to be operational by the second quarter of 1997.

For 1996, the Company renegotiated the pricing provisions with KNGSS with
respect to a majority of its Hugoton and Panoma Fields' gas production. The
price is calculated on a monthly basis by using the average price of a basket
of four Mid-Continent indices less a variable amount not to exceed $0.20 per
MMBtu.

During the year ended December 31, 1995, there was one gas purchaser, KNGSS,
that accounted for approximately 18% of the Company's total revenues. The
Company believes it would be able to locate alternate customers in the event
of the loss of this customer.

The Company has established a Risk Management Committee to manage the
Company's hedging activities with respect to both production and trading. The
Risk Management Committee consists of the Chief Executive Officer, the
President and Chief Operating Officer, the Chief Financial Officer, and the
Executive Vice President-Operations. With respect to production hedge
transactions, it is the policy of the Company that the Risk Management
Committee review and approve all such transactions and that all such
transactions must be fully hedged with no open positions.

As a result of its gas trading activities, the Company may from time to time
have gas purchase or sales commitments without corresponding contracts to
offset these commitments, which could result in losses to the Company. The
Company currently attempts to control and manage its exposure to these risks
by monitoring and hedging its trading positions as it deems appropriate and by
having the Company's Risk Management Committee review significant trades or
positions before they are committed to by trading personnel. All fixed price
trading activities are hedged to lock in margins.

As of May 1, 1996, the Company had entered into financial hedge transactions
to hedge 42,000 MMBtu per day of gas production from May 1, 1996 through
October 31, 1996, representing approximately 26% of the Company's current net
daily gas production.

During the year ended December 31, 1995, revenues from trading activities,
which includes the cost of gas purchased or sold for trading purposes, was
$28.6 million, representing 22% of the Company's consolidated revenues. During
the quarter ended March 31, 1996, revenues from trading activities was $12
million, representing 28% of the Company's consolidated revenues.

OIL AND CONDENSATE. Oil, including condensate production, is generally sold
from the leases at posted field prices, plus negotiated bonuses. Marketing
arrangements are made locally with various petroleum companies. The Company
sells its oil production to numerous customers. No customer's total 1995 oil
purchases represented more than 10% of total Company revenues. Oil revenues
totaled $26.8 million for 1995 and represented 21% of the Company's total
revenues for the year.

In addition, the Company has entered into a hedge transaction to hedge 1,000
barrels of daily crude oil production from May 1, 1996 through June 30, 1996
representing approximately 22% of the Company's current daily net oil
production.

31
<PAGE>

PRODUCTION

The table below sets forth information with respect to the Company's net
interests in producing gas and oil properties for each of its last three years
and for the three months ended March 31, 1996 and 1995, respectively:

<TABLE>
<CAPTION>
GAS AND OIL PRODUCTION
-------------------------------------
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------- -------------
1993 1994 1995 1995 1996
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Quantities Produced and Sold
Gas (Bcf).............................. 31.7 33.3 47.7 11.7 13.5
Oil and Condensate (MMBbls)............ 1.3 1.3 1.7 0.4 0.4
Average Sales Price
Gas ($/Mcf)............................ $ 1.94 $ 1.83 $ 1.47 $ 1.57 $ 1.67
Oil and Condensate ($/Bbls)............ 14.93 13.95 15.76 15.55 16.51
Average Production Costs ($/Mcfe)........ $ 0.77 $ 0.69 $ 0.60 $ 0.63 $ 0.68
</TABLE>

PRODUCTIVE WELLS AND DEVELOPED ACREAGE

The productive wells in which the Company owned a working interest as of
December 31, 1995 are described in the following table:

<TABLE>
<CAPTION>
PRODUCTIVE WELLS (1)
-------------------------
GAS WELLS OIL WELLS DEVELOPED ACREAGE
------------ ------------ -----------------
BASIN OR FIELD GROSS NET GROSS NET GROSS NET
-------------- ----- ------ ----- ------ -----------------
<S> <C> <C> <C> <C> <C> <C>
Rocky Mountain Region
Wind River........................ 9 8.46 0 0.00 440 414
Piceance.......................... 289 99.93 0 0.00 35,200 10,600
Powder River...................... 16 2.30 288 67.60 42,654 25,521
Green River....................... 45 21.43 3 1.80 19,998 9,396
Mid-Continent Region
Hugoton Embayment................. 411 346.80 0 0.00 118,238 114,100
Arkoma............................ 135 24.81 0 0.00 41,181 11,755
Anadarko.......................... 180 66.34 13 12.60 40,725 14,571
Southern Region
Permian........................... 13 9.60 287 215.73 25,922 20,407
Gulf Coast/Gulf of Mexico......... 12 2.90 10 0.60 2,934 420
Other(2)............................ 93 58.30 253 33.94 45,403 30,741
----- ------ --- ------ -------- --------
Total............................. 1,203 640.87 854 332.27 372,695 237,925
===== ====== === ====== ======== ========
</TABLE>
- --------
(1) Each well completed to more than one producing zone is counted as a single
well. The Company has royalty interests in certain wells that are not
included in this table.
(2) Includes Uinta (Utah) and Overthrust (Wyoming) Basins and Eagle Springs
(Nevada) Field.

32
<PAGE>

DRILLING ACTIVITY

The following table summarizes the Company's gas and oil drilling
activities, all of which were located in the continental United States, during
the last three years:

<TABLE>
<CAPTION>
WELLS DRILLED
-----------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------
1993 1994 1995
----------- ----------- -----------
GROSS NET GROSS NET GROSS NET
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Exploratory
Gas....................................... 0 0.00 1 0.50 0 0.00
Oil....................................... 1 0.10 5 .58 1 0.33
Non-productive............................ 12 4.55 8 1.84 8 2.65
--- ----- --- ----- --- -----
Total................................... 13 4.65 14 2.92 9 2.98
=== ===== === ===== === =====
Development
Gas....................................... 70 24.29 100 36.51 88 39.03
Oil....................................... 13 10.40 19 12.62 22 11.68
Non-productive............................ 9 1.35 18 7.65 10 3.51
--- ----- --- ----- --- -----
Total................................... 92 36.04 137 56.78 120 54.22
=== ===== === ===== === =====
</TABLE>

In addition, the Company was participating in 10 gross (2.97 net) wells
which were in the process of being drilled at December 31, 1995.

RESERVES

The table below sets forth the Company's estimated quantities of proved
reserves, all of which were located in the continental U.S., and the present
value of estimated future net revenues from these reserves on a non-escalated
basis, discounted at 10% per year, as of the end of each of the last three
years. These estimates were prepared by the Company, with certain portions
having been reviewed by Ryder Scott Company, an independent reservoir
engineer, and the other portions having been reviewed by Netherland, Sewell &
Associates, Inc., an independent reservoir engineer. The total proved net
reserves estimated by the Company were within 10% of those reviewed and
estimated by the engineers; however, on a well by well basis, differences of
greater than 10% may exist. See "Risk Factors--Engineers' Estimates of
Reserves and Future Net Revenues".

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-----------------------------------------------
1993 1994 1995
--------------- --------------- ---------------
(DOLLARS IN THOUSANDS, EXCEPT SALES PRICE DATA)
<S> <C> <C> <C>
Estimated Proved Reserves:
Gas (Bcf)................... 364.8 458.8 513.5
Oil (MMBbls)................ 6.9 11.4 13.0
Total (Bcfe).............. 406.5 527.5 591.3
Gas Price as of December 31
($/Mcf)...................... $ 1.95 $ 1.67 $ 1.77
Oil Price as of December 31
($/Bbl)...................... 11.05 14.43 17.35
Present Value of Estimated
Future Net Revenues before
income taxes discounted at
10%.......................... $ 277,571 $ 322,689 $ 432,603
</TABLE>

In accordance with applicable requirements of the Securities and Exchange
Commission (the "Commission"), estimates of the Company's proved reserves and
future net revenues are made using sales prices estimated to be in effect as
of the date of such reserve estimates and are held constant throughout the
life of the properties (except to the extent a contract specifically provides
for escalation). Estimated quantities of proved reserves and future net
revenues therefrom are affected by gas and oil

33
<PAGE>

prices, which have fluctuated widely in recent years. There are numerous
uncertainties inherent in estimating natural gas and oil reserves and their
estimated values, including many factors beyond the control of the producer.
The reserve data set forth in this Prospectus represents only estimates.
Reservoir engineering is a subjective process of estimating underground
accumulations of natural gas and oil that cannot be measured in an exact
manner. The accuracy of any reserve estimate is a function of the quality of
available data and of engineering and geological interpretation and judgment.
As a result, estimates of different engineers, including those used by the
Company, may vary. In addition, estimates of reserves are subject to revision
based upon actual production, results of future development and exploration
activities, prevailing gas and oil prices, operating costs and other factors,
which revisions may be material. Accordingly, reserve estimates are often
different from the quantities of natural gas and oil that are ultimately
recovered and are highly dependent upon the accuracy of the assumptions upon
which they are based.

In general, the volume of production from gas and oil properties owned by the
Company declines as reserves are depleted. Except to the extent the Company
acquires additional properties containing proved reserves or conducts
successful exploration and development activities, or both, the proved reserves
of the Company will decline as reserves are produced. Volumes generated from
future activities of the Company are therefore highly dependent upon the level
of success in acquiring or finding additional reserves and the costs incurred
in doing so.

Reference should be made to "Supplemental Gas and Oil Information" on page F-
22 following the Financial Statements included in this Prospectus for
additional information pertaining to the Company's proved gas and oil reserves
as of the end of each of the last three fiscal years. During the past year, the
only report concerning the Company's estimated proved reserves that was filed
with a U.S. federal agency other than the Commission was filed prior to the
Company's merger with Plains, by Barrett and Plains, respectively. This report
was the Annual Survey of Domestic Oil and Gas Reserves and was filed with the
Energy Information Administration (EIA) as required by law. Only minor
differences of less than 5% in reserve estimates, which were due to small
variances in actual production versus year end estimates, have occurred in
certain classifications reported in this Prospectus as compared to those in the
EIA report.

UNDEVELOPED ACREAGE

The gross and net acres of undeveloped gas and oil leases held by the Company
as of December 31, 1995 are summarized in the following table. "Undeveloped
Acreage" includes leasehold interests that already may have been classified as
containing proved undeveloped reserves.

<TABLE>
<CAPTION>
UNDEVELOPED
ACREAGE(1)
---------------
LOCATION GROSS NET
-------- ------- -------
<S> <C> <C>
Arkansas (Arkoma Basin)........................................ 360 360
Colorado (Piceance Basin)...................................... 78,737 23,815
Louisiana (Gulf Coast)......................................... 5,803 1,516
Montana (Williston Basin)...................................... 15,950 8,255
New Mexico (Permian Basin)..................................... 240 240
North Dakota (Williston Basin)................................. 12,721 2,684
Oklahoma (Anadarko and Arkoma Basins).......................... 39,948 20,203
Texas (Permian Basin and Gulf Coast)........................... 22,937 4,493
Utah (Uinta Basin)............................................. 10,823 9,703
Wyoming (Wind River, Green River and Powder River Basins)...... 221,238 119,723
Offshore (Gulf of Mexico)...................................... 12,500 2,713
------- -------
Total........................................................ 421,257 193,705
======= =======
</TABLE>

34
<PAGE>

- --------
(1) Undeveloped acreage is lease acreage on which wells have not been drilled
or completed to a point that would permit the production of commercial
quantities of gas and oil regardless of whether such acreage contains
proved reserves. Of the aggregate of 421,257 gross and 193,705 net
undeveloped acres, 68,700 gross and 29,055 net acres are held by
production from other leasehold acreage.

Substantially all the leases summarized in the preceding table will expire
at the end of their respective primary terms unless the existing leases are
renewed or production has been obtained from the acreage subject to the lease
prior to that date, in which event the lease will remain in effect until the
cessation of production. The following table sets forth the gross and net
acres subject to leases summarized in the preceding table that will expire
during the periods indicated:

<TABLE>
<CAPTION>
ACRES EXPIRING
---------------
GROSS NET
------- -------
<S> <C> <C>
Twelve Months Ending:
December 31, 1996............................................. 82,041 23,555
December 31, 1997............................................. 72,902 32,016
December 31, 1998............................................. 45,551 25,636
December 31, 1999 and later................................... 220,763 112,496
</TABLE>

OVERRIDING ROYALTY INTERESTS

The Company owns overriding royalty interests covering in excess of 52,394
gross acres. The majority of these overriding royalty interests are within a
range of approximately 0.25 to 2.5%.

GOVERNMENT REGULATION OF THE OIL AND GAS INDUSTRY

GENERAL. The Company's exploration, production and marketing operations are
regulated extensively at the federal, state and local levels. Gas and oil
exploration, development and production activities are subject to various laws
and regulations governing a wide variety of matters. For example, hydrocarbon-
producing states have statutes or regulations addressing conservation
practices and the protection of correlative rights, and such regulations may
affect Barrett's operations and limit the quantity of hydrocarbons Barrett may
produce and sell. Other regulated matters include marketing, pricing,
transportation, and valuation of royalty payments.

At the U.S. federal level, the Federal Energy Regulatory Commission ("FERC")
regulates interstate transportation of natural gas under the Natural Gas Act
and regulates the maximum selling prices of certain categories of gas sold in
"first sales" in interstate and intrastate commerce under the Natural Gas
Policy Act ("NGPA"). Effective January 1, 1993, the Natural Gas Wellhead
Decontrol Act deregulated natural gas prices for all "first sales" of natural
gas, which includes sales by Barrett of its own production. As a result, all
sales of the Company's natural gas produced in the U.S. may be sold at market
prices, unless otherwise committed by contract. See "Business and Properties--
Gas and Oil Marketing and Trading".

The Company's gas sales are affected by regulation of intrastate and
interstate gas transportation. In an attempt to promote competition, the FERC
has issued a series of orders which have altered significantly the marketing
and transportation of natural gas. The effect of these orders has been to
enable the Company to market its natural gas production to purchasers other
than the interstate pipelines located in the vicinity of its producing
properties. The Company believes that these changes have generally improved
the Company's access to transportation and have enhanced the marketability of
its natural gas production. To date, Barrett has not experienced any material
adverse effect on gas marketing as a result of these FERC orders; however, the
Company cannot predict what new

35
<PAGE>

regulations may be adopted by the FERC and other regulatory authorities, or
what effect subsequent regulations may have on its future gas marketing.

The Company also is subject to laws and regulations concerning occupational
safety and health. It is not anticipated that the Company will be required in
the near future to expend amounts that are material in the aggregate to the
Company's overall operations by reason of occupational safety and health laws
and regulations, but inasmuch as such laws and regulations are frequently
changed, the Company is unable to predict the ultimate cost of compliance.

ENVIRONMENTAL MATTERS. Barrett, as an owner or lessee and operator of gas
and oil properties, is subject to various federal, state and local laws and
regulations relating to discharge of materials into, and protection of, the
environment. These laws and regulations may, among other things, impose
liability on the lessee under a gas and oil lease for the cost of pollution
clean-up resulting from operations, subject the lessee to liability for
pollution damages, require suspension or cessation of operations in affected
areas and impose restrictions on the injection of liquid into subsurface
aquifers that may contaminate groundwater.

Barrett has made and will continue to make expenditures in its efforts to
comply with these requirements, which it believes are necessary business costs
in the oil and gas industry.The Company believes it is in substantial
compliance with applicable environmental laws and requirements and to date
such compliance has not had a material adverse effect on the earnings or
competitive position of the Company, although there can be no assurance that
significant costs for compliance will not be incurred in the future. See "Risk
Factors--Government Regulation and Environmental Risks".

TITLE TO PROPERTIES

Title to properties is subject to royalty, overriding royalty, carried, net
profits, working and other similar interests and contractual arrangements
customary in the oil and gas industry, to liens for current taxes not yet due
and to other encumbrances. As is customary in the industry in the case of
undeveloped properties, little investigation of record title is made at the
time of acquisition (other than a preliminary review of local records).
Drilling title opinions are always prepared before commencement of drilling
operations.

EMPLOYEES AND OFFICES

Barrett currently has 133 full time employees, including eight officers (two
of whom are geologists and one of whom is a petroleum engineer), nine
geologists, four geophysicists, nine engineers, one environmental manager,
four landmen, four district managers, one operations superintendent, and
administrative, clerical, accounting and field operations personnel, none of
whom is represented by organized labor unions.

The Company is headquartered in Denver, Colorado with additional exploration
offices in Tulsa, Oklahoma and Houston, Texas. Barrett also has production
offices in Lakin, Kansas, Midland, Texas, Parachute, Colorado and Gillette,
Wyoming.

36
<PAGE>

MANAGEMENT

The directors and executive officers of the Company, their respective
positions and ages, and the year in which each director was first elected, are
set forth in the following table. Additional information concerning each of
these individuals follows the table:

<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION WITH THE COMPANY SINCE
---- --- ------------------------- --------
<C> <C> <S> <C>
William J. Barrett (1)(2)(3).... 67 Chief Executive Officer and 1983
Chairman Of The Board Of
Directors
C. Robert Buford (4)(5)......... 62 Director 1983
Derrill Cody (4)(5)............. 57 Director 1995
James M. Fitzgibbons (4)(5)(6).. 61 Director 1987
Hennie L.J.M. Gieskes (4)(5) 57 Director 1985
William W. Grant, III (4)....... 63 Director 1995
J. Frank Keller (1)............. 52 Chief Financial Officer, 1983
Executive Vice President,
Secretary, and a Director
Paul M. Rady.................... 42 President, Chief Operating 1994
Officer, and a Director
A. Ralph Reed................... 58 Executive Vice President-- 1990
Operations and a Director
James T. Rodgers (4)(5)......... 61 Director 1993
Philippe S.E. Schreiber (4)(5).. 55 Director 1985
Harry S. Welch (5).............. 72 Director 1995
Joseph P. Barrett (2)........... 42 Vice President--Land --
Robert W. Howard................ 41 Senior Vice President--Finance --
and Treasurer
Eugene A. Lang, Jr. ............ 42 Senior Vice President--General --
Counsel
Donald H. Stevens............... 43 Vice President--Corporate --
Relations and Capital Markets
</TABLE>
- --------
(1) Mr. Barrett and Mr. Keller are brothers-in-law.
(2) Joseph P. Barrett is the son of William J. Barrett.
(3) Mr. Barrett's retirement plans include remaining as Chairman of the Board
until the Company's 1999 Annual Meeting of Stockholders and remaining as
Chief Executive Officer until the Company's 1997 Annual Meeting of
Stockholders.
(4) Member of the Audit Committee of the Board of Directors.
(5) Member of the Compensation Committee of the Board of Directors.
(6) Mr. Fitzgibbons served as a director of the Company from July 1987 until
October 1992. He was reelected to the Board of Directors in January 1994.

WILLIAM J. BARRETT has been Chief Executive Officer since December 1983 and
Chairman of the Board of Directors of the Company since March 1994. Mr.
Barrett was President of the Company from December 1983 through September
1994. Mr. Barrett has been the Chairman of the Board, Chief Executive Officer,
and a director of Plains since it became a wholly owned subsidiary of the
Company as the result of a merger in July 1995. Mr. Barrett has also been a
director of Barrett Fuels since its formation in September 1990. From January
1979 to February 1982, Mr. Barrett was an independent gas and oil operator in
the western United States in association with Aeon Energy, a partnership
composed of four sole proprietorships. From 1971 to 1978, Mr. Barrett served
as Vice President--Exploration and a director of Rainbow Resources, Inc., a
publicly held independent gas and oil exploration company that merged with a
subsidiary of the Williams Companies in 1978. Mr. Barrett served as President,
Exploration Manager and Director for B&C Exploration from 1969 until 1971 and
was a chief geologist for Wolf Exploration Company, now known as Inexco Oil
Co., from 1967 to 1969. He was an exploration geologist with Pan-American
Petroleum Corporation from 1963 to 1966 and

37
<PAGE>

worked as an exploration geologist, a petroleum geologist and a stratigrapher
for El Paso Natural Gas Co. at various times from 1958 to 1963. Mr. Barrett
received a B.S. Degree in Geology and an M.S. Degree in Geology from Kansas
State University in 1956 and 1957, respectively. Mr. Barrett's retirement plans
include remaining as Chairman of the Board until the Company's 1999 Annual
Meeting of Stockholders and remaining as Chief Executive Officer until the
Company's 1997 Annual Meeting of Stockholders.

C. ROBERT BUFORD has been a director of the Company since December 1983 and
served as Chairman of the Board of Directors from December 1983 through March
1994. Mr. Buford has been President, Chairman of the Board and controlling
shareholder of Zenith, Wichita, Kansas, since February 1966. Zenith is engaged
in the gas and oil business and owns approximately 3% of the Company's Common
Stock. Since 1993, Mr. Buford has served as a director of Encore Energy, Inc.,
a wholly owned subsidiary of Zenith engaged in the marketing of natural gas.
Mr. Buford is also a member of the Board Of Directors of First Bancorp of
Wichita, Kansas, a bank holding company, and Lonestar Steakhouse & Saloon,
Inc., a restaurant company headquartered in Wichita, Kansas. He received a B.A.
Degree in Business Administration from Oklahoma State University in 1955.

DERRILL CODY has been a director of the Company since July 1995. Mr. Cody was
a director of Plains from May 1990 through July 1995. Since January 1990, Mr.
Cody has been an attorney in private practice in Oklahoma City, Oklahoma. From
1986 to 1990, he was Executive Vice President of Texas Eastern Corporation, and
from 1987 to 1990 he was the Chief Executive Officer of Texas Eastern Pipeline
Company. He has been a director of the General partner of TEPPCO Partners, L.P.
since January 1990. Mr. Cody received a B.A. Degree in History from East
Central State College in 1960 and an L.L.B. from the University of Oklahoma in
1964.

JAMES M. FITZGIBBONS has been a director of the Company since January 1994,
and previously served as a director of the Company from July 1987 until October
1992. Since October 1990, Mr. Fitzgibbons has been Chairman and Chief Executive
Officer of Fieldcrest Cannon, Inc., a manufacturer of home furnishing textiles.
From January 1986 until October 1990, Mr. Fitzgibbons was President of Amoskeag
Company in Boston, Massachusetts. Prior to 1986, he was President of Howes
Leather Company, a producer of leather. Mr. Fitzgibbons is also member of the
Board Of Directors of Lumber Insurance Company, American Textile Manufacturers
Institute and a Trustee of Laurel Funds, a series of mutual funds. Mr.
Fitzgibbons received an A.B. Degree from Harvard College in 1956.

HENNIE L.J.M. GIESKES has been a director of the Company since November 1985.
Mr. Gieskes is the Managing Director of Spaarne Compagnie N.V., a Netherlands
company engaged in the investment business. From before 1976 until December
1990, Mr. Gieskes was a Managing Director of Vitol Beheer B.V., a Netherlands
trading company engaged primarily in energy-related commodities. Mr. Gieskes
received a law degree from the University of Amsterdam, The Netherlands, in
1968.

WILLIAM W. GRANT, III has been a director of the Company since July 1995. Mr.
Grant was a director of Plains from May 1987 through July 1995. He has been an
advisory director of Colorado National Bankshares, Inc. and Colorado National
Bank since 1993. He was a director of Colorado National Bankshares, Inc. from
1982 to 1993 and the Chairman of the Board of Colorado National Bank from 1986
to 1993. He served as the Chairman of the Board of Colorado Capital Advisors
from 1989 through 1994. Mr. Grant received a B.A. Degree in English from Yale
University in 1954 and attended the Harvard University Graduate School of
Business' Advanced Management Program from 1970 to 1971.

J. FRANK KELLER has been Chief Financial Officer since July 1995 and an
Executive Vice President, the Secretary and a director of the Company since
December 1983. Mr. Keller has been the Chief Financial Officer, an Executive
Vice President, the Secretary, and a director of Plains since July 1995. He
also has been the President and a director of Barrett Fuels Corporation since
its formation in

38
<PAGE>

September 1990. Mr. Keller was an Executive Vice President of the Company from
December 1983 through September 1995. Mr. Keller was the President and a co-
founder of Myriam Corp., an architectural design and real estate development
firm beginning in 1976, until it was reorganized as Barrett Energy in February
1982. Mr. Keller graduated from Kansas State University in 1967 with a B.S.
Degree and received an M.B.A. Degree from Colorado State University in 1992.

PAUL M. RADY has been President, Chief Operating Officer, and a director of
the Company since September 1994. Prior to that time Mr. Rady served as
Executive Vice President--Exploration of the Company beginning February 1993.
Mr. Rady has been the President, Chief Operating Officer, and a director of
Plains since July 1995. From August 1990 until July 1992, Mr. Rady served as
Chief Geologist for the Company, and from July 1992 until January 1993 he
served as Exploration Manager for the Company. From July 1980 until August
1990, Mr. Rady served in various positions with the Denver, Colorado regional
office of Amoco Production Company, the exploration and production subsidiary
of Amoco Corporation. Mr. Rady was a Geologist and Geophysicist for Amoco
Production Company. While with Amoco Production Company, Mr. Rady's areas of
responsibility included the Rocky Mountain Basins, Utah-Wyoming Overthrust
Belt, offshore Alaska, Oklahoma, particularly with respect to the Arkoma Basin,
and the New Ventures Group, which concentrated on the western United States.
Mr. Rady received a B.A. Degree in Geology in 1978 from Western State College
of Colorado in Gunnison, Colorado, and an M.S. Degree in Geology in 1980 from
Western Washington University in Bellingham, Washington.

A. RALPH REED has been an Executive Vice President of the Company since
November 1989 and a director of the Company since September 1990. Mr. Reed has
served as Executive Vice President--Operations and a director of Plains since
July 1995. From 1986 to 1989, Mr. Reed was an independent gas and oil operator
in the Mid-Continent region of the United States, including the period from
January 1988 to November 1989 when he acted as a consultant to Zenith. From
1982 to 1986, Mr. Reed was President and Chief Executive Officer of Cotton
Petroleum Corporation, a wholly owned exploration and production subsidiary of
United Energy Resources, Inc. Prior to joining Cotton Petroleum Corporation in
1980, Mr. Reed was employed by Amoco Production Company from 1962, holding
various positions including Manager of International Production, Division
Production Manager and Division Engineer. Mr. Reed received a B.S. Degree in
Petroleum Engineering from the University of Oklahoma in 1959 and in 1975
attended the Executive School at the University of Virginia.

JAMES T. RODGERS has been a director of the Company since October 1993. Mr.
Rodgers served as the President, Chief Operating Officer and a director of
Anadarko Petroleum Corporation ("Anadarko") from 1986 through 1992. Anadarko is
a Houston-based gas and oil exploration and production company. Prior to 1986,
Mr. Rodgers was employed in other capacities by Anadarko and Amoco Production
Company. Mr. Rodgers taught Petroleum Engineering at the University of Texas in
Austin in 1958 and at Texas Tech University in Lubbock from 1958 to 1961. Mr.
Rodgers currently serves as a Director of Louis Dreyfus Natural Gas Corporation
and as an Advisory Director for Texas Commerce Bank in Houston. Mr. Rodgers
received a B.S. Degree from Louisiana State University in 1956 and an M.S.
Degree from the University of Texas in 1958.

PHILIPPE S.E. SCHREIBER has been a director of the Company since November
1985. Mr. Schreiber is an independent lawyer and business consultant who also
is of counsel to the law firm of Walter, Conston, Alexander & Green, P.C. in
New York, New York. Mr. Schreiber has been affiliated with that law firm as
counsel or partner since August 1985. From 1988 to mid-1992, he also was the
Chairman of the Board and a principal shareholder of HSE, Inc., d/b/a Manhattan
Kids Limited, a privately owned corporation involved in catalogue sales of
American made children's clothing in Europe. From October 1985 through June
1992, Mr. Schreiber served as a director, and from July 1990 until June 1991 as
Managing Director, of Owl Creek Investments Plc, a publicly traded English gas
and oil company. Mr. Schreiber received an A.B. Degree from Columbia College in
1964 and a J.D. Degree from Columbia University School of Law in 1967.

39
<PAGE>

HARRY S. WELCH has been a director of the Company since July 1995. Mr. Welch
was a director of Plains from May 1986 to July 1995. Since August 1989, he has
been an attorney in private practice in Houston, Texas. He served as Vice
President and General Counsel of Texas Eastern Corporation from 1988 to July
1989. Mr. Welch received a B.B.A. Degree and an L.L.B. Degree from the
University of Texas in 1947 and 1949, respectively.

JOSEPH P. BARRETT has been a Vice President since March 1995 and has been
with the Company since 1982. Mr. Barrett has served as Vice President--Land and
a director of Plains since July 1995. He is a 1977 graduate of the University
of Colorado where he earned a Bachelor's Degree in Business and Mineral Land
Management, and a 1982 graduate of Washburn University Law School where he
earned his law degree.

ROBERT W. HOWARD has been Senior Vice President of the Company since March
1992. Mr. Howard has served as Senior Vice President and a director of Plains
since July 1995. Mr. Howard served as the Executive Vice President--Finance
from December 1989 until March 1992 and served as Vice President--Finance of
the Company from December 1983 until December 1989. Mr. Howard has been the
Treasurer of the Company since March 1986. During 1982, Mr. Howard was a
Manager/Accountant with Weiss & Co., a certified public accounting firm. Mr.
Howard received a B.B.A. Degree from the University of Wisconsin, Eau Claire,
in 1976.

EUGENE A. LANG, JR. has been Senior Vice President--General Counsel of the
Company since September 1995. Mr. Lang served as Senior Vice President, General
Counsel and Secretary of Plains from May 1994 to July 1995, and from October
1990 to May 1994 he served as Vice President, General Counsel and Secretary of
Plains. From 1986 to 1990 he was an associate with the Houston, Texas law firm
of Vinson & Elkins. From 1984 to 1986, he was General Attorney and Assistant
Secretary of K N. From 1978 to 1984, he was an attorney for K N.

DONALD H. STEVENS has been the Vice President--Corporate Relations and
Capital Markets for the Company since August 1992. From July 1989 until August
1992, Mr. Stevens served as Manager of Corporate and Tax Planning for Kennecott
Corporation, a mining company. From May 1986 until September 1989, Mr. Stevens
served as Corporate Planning Analyst in Corporate Acquisition and Divestitures
for BP America, Inc., formerly The Standard Oil Company. Prior to May 1986, Mr.
Stevens served in various finance, tax and analyst positions with Seco Energy
Corporation and Gulf Oil Corporation, both of which are gas and oil companies.
Mr. Stevens received his B.S. Degree in Finance/Accounting from the University
of Wyoming in 1975.

40
<PAGE>

BENEFICIAL OWNERS OF SECURITIES

The following table summarizes certain information as of April 30, 1996 with
respect to the ownership by each director, by all executive officers and
directors as a group, and by each other person known by the Company to be the
beneficial owner of more than 5% of the Common Stock:

<TABLE>
<CAPTION>
PERCENT OF CLASS
-------------------
NAME OF NUMBER OF SHARES PRIOR TO AFTER
BENEFICIAL OWNER BENEFICIALLY OWNED OFFERINGS OFFERINGS
---------------- ------------------ --------- ---------
<S> <C> <C> <C>
William J. Barrett..................... 337,934(1) 1.3% 1.1%
C. Robert Buford....................... 658,611(2) 2.6 2.2
Derrill Cody........................... 10,560(3) * *
James M. Fitzgibbons................... 9,000(3) * *
Hennie L.J.M. Gieskes.................. 896,714(3) 3.5 3.0
William W. Grant, III.................. 23,650(3) * *
J. Frank Keller........................ 66,286(3) * *
Paul M. Rady........................... 56,521(3) * *
A. Ralph Reed.......................... 63,843(4) * *
James T. Rodgers....................... 9,500(3) * *
Philippe S.E. Schreiber................ 17,507(3) * *
Harry S. Welch......................... 16,000(3) * *
All Directors And Executive Officers As
A Group
(16 persons).......................... 2,274,658(5) 8.8 7.6
State Farm Mutual Insurance Company
One State Farm Plaza
Bloomington, IL 61710................. 2,065,233(6) 8.1 7.0
Wellington Management Company
75 State Street
Boston, MA 02109...................... 1,529,700(6)(7) 6.0 5.2
</TABLE>
- --------
* Less than 1% of the Common Stock outstanding.
(1) The number of shares indicated includes 37,718 shares owned by Louise K.
Barrett, Mr. Barrett's wife and 230,000 shares owned by the Barrett Family
L.L.L.P., a Colorado limited partnership for which Mr. Barrett and his wife
are general partners and owners of an aggregate of 62.9% of the partnership
interests. Pursuant to Rule 16a-1(a)(4) under the Securities Exchange Act
of 1934 (the "1934 Act"), Mr. Barrett disclaims ownership of all but
144,723 shares held by the Barrett Family L.L.L.P., which constitutes Mr.
and Mrs. Barrett's proportionate share of the shares held by the Barrett
Family L.L.L.P.
(2) C. Robert Buford is considered a beneficial owner of the 604,830 shares of
which Zenith is the record owner. Mr. Buford owns approximately 89% of the
outstanding common stock of Zenith. The number of shares of the Company's
stock indicated for Mr. Buford also includes 10,000 shares that are owned
by Aguilla Corporation, which is owned by Mr. Buford's wife and adult
children. Mr. Buford disclaims beneficial ownership of the shares held by
Aguilla Corporation pursuant to Rule 16a-1(a)(4) under the 1934 Act. The
number of shares indicated also includes 8,500 shares underlying options
currently exercisable.
(3) The number of shares indicated consists of or includes the following number
of shares underlying options that currently are exercisable or that become
exercisable within the next 60 days that are held by each of the following
persons: Derrill Cody, 10,300; James M. Fitzgibbons, 7,000; Hennie L.J.M.
Gieskes, 7,500; William W. Grant, III, 13,900; J. Frank Keller, 22,350;
Paul M. Rady, 26,500; James T. Rodgers, 9,500; Philippe S.E. Schreiber,
7,500; and Harry S. Welch, 13,400.
(4) The number of shares indicated includes 12,500 shares owned by Mary C.
Reed, Mr. Reed's wife and 35,800 shares underlying options that currently
are exercisable or that become exercisable within the next 60 days.

41
<PAGE>

(5) The number of shares indicated includes the shares owned by Zenith that are
beneficially owned by Mr. Buford as described in note (2) and the aggregate
of 162,250 shares underlying the options described in notes (2), (3) and
(4), an aggregate of 29,423 shares owned by four executive officers not
named in the above table, and an aggregate of 79,109 shares underlying
options that currently are exercisable or that are exercisable within 60
days that are held by those four executive officers.
(6) Based on information included in a Schedule 13G filed with the Commission
by the named stockholder.
(7) Wellington Management Company, in its capacity as investment adviser, may
be deemed the beneficial owner of these shares which are owned by numerous
investment counselling clients.

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital consists of 35,000,000 shares of $0.01 par
value Common Stock and 1,000,000 shares of $0.001 par value Preferred Stock.

Each share of Common Stock is entitled to share equally in dividends from
sources legally available therefor when, as, and if declared by the Board of
Directors and, upon liquidation or dissolution of the Company, whether
voluntary or involuntary, to share equally in the assets of the Company
available for distribution to the holders of the Company's Common Stock. Each
holder of Common Stock is entitled to one vote per share for all purposes. The
Company's bank line of credit restricts payment of dividends during a quarter
to amounts that are less than 50% of the Company's average net income for the
four previous quarters. The holders of Common Stock have no preemptive rights
and there is no cumulative voting, redemption right or right of conversion with
respect to the Common Stock. All outstanding shares of Common Stock and all
shares to be sold and issued by the Company pursuant to the Offerings will be
fully paid and nonassessable. The Board of Directors is authorized to issue
additional shares of Common Stock within the limits authorized by the Company's
Certificate of Incorporation and without stockholder action.

No shares of Preferred Stock have been issued. However, the Board of
Directors of the Company has the right to fix the rights, privileges and
preferences, including preference upon liquidation, of any class of preferred
stock to be issued in the future out of authorized but unissued shares of
Preferred Stock. The Board of Directors may issue these shares after adopting
and filing a certificate of designations with the Secretary of State of the
State of Delaware.

SECTION 203 OF THE DELAWARE LAW. Generally, Section 203 of the Delaware
General Corporation Law ("GCL"), to which the Company is subject, prohibits a
publicly held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless
(i) prior to the date of the business combination, the transaction is approved
by the board of directors of the corporation, (ii) upon consummation of the
transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owns at least 85% of the outstanding
voting stock, or (iii) on or after such date the business combination is
approved by the board and by the affirmative vote of at least 66 2/3% of the
outstanding voting stock which is not owned by the interested stockholder. A
"business combination" includes a merger, asset sale and other transactions
resulting in a financial benefit to the stockholder. An "interested
stockholder" is a person who, together with affiliates and associates, owns (or
within three years, did own) 15% or more of the corporation's voting stock. The
provisions of Section 203 may have the effect of delaying, deferring or
preventing a change of control of the Company.

42
<PAGE>

LEGAL MATTERS

Bearman Talesnick & Clowdus Professional Corporation, Denver, Colorado, has
acted as counsel for the Company in connection with the Offerings, including
with respect to the validity of the issuance of the shares of Common Stock
offered hereby. Attorneys employed by that law firm beneficially own
approximately 22,000 shares of the Company's Common Stock. Certain legal
matters will be passed upon for the Underwriters by Andrews & Kurth L.L.P., New
York, New York.

EXPERTS

The consolidated financial statements and schedules of the Company as of
December 31, 1995 and 1994 and for each of the three years in the period ended
December 31, 1995 included in this Prospectus and elsewhere in the Registration
Statement of which this Prospectus forms a part have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
with respect thereto, and are included herein in reliance upon the authority of
such firm as experts in giving such reports.

The information included and incorporated by reference herein regarding the
total proved reserves of the Company was prepared by the Company. A portion was
reviewed by Ryder Scott Company and the remaining portion was reviewed by
Netherland, Sewell & Associates, Inc., as stated in their respective letter
reports with respect thereto. The reserve review letters of Ryder Scott Company
and Netherland, Sewell & Associates, Inc. are filed as exhibits to the
Registration Statement of which this Prospectus is a part, in reliance upon the
authority of said firms as experts with respect to the matters covered by their
reports and the giving of their reports.

AVAILABLE INFORMATION

This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein together with all amendments thereto referred to as the "Registration
Statement") filed by the Company with the Commission under the Securities Act
of 1933, as amended. This Prospectus does not contain all the information set
forth in the Registration Statement and exhibits thereto, and statements
included in this Prospectus as to the content of any contract or other document
referred to are not necessarily complete. For further information, reference is
made to the Registration Statement and to the exhibits and schedules filed
therewith. All these documents may be inspected at the Commission's principal
office in Washington, D.C. without charge, and copies of them may be obtained
from the Commission upon payment of prescribed fees. Statements contained in
this Prospectus as to the contents of any contract or other document filed as
an exhibit to the Registration Statement are not necessarily complete, and in
each instance reference is hereby made to the copy of such contract or other
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance therewith
files reports, proxy statements and other information with the Commission. Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, Room 1024 and at the following Regional
Offices of the Commission: 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and 7 World Trade Center, New York, New York 10048. Copies
of such material also can be obtained at prescribed rates by writing to the
Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549. In addition, such material may also be inspected and copied at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.

43
<PAGE>

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents that previously were, or are required in the future
to be, filed with the Commission (File No. 1-13446) pursuant to the 1934 Act
are incorporated herein by reference:

<TABLE>
<C> <S>
(i) the Company's Annual Report on Form 10-K for the year ended December
31, 1995;
(ii) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
(iii) the description of the Company's Common Stock contained in the
Company's registration statement on Form 8-A as filed with the
Commission on October 27, 1994;
(iv) the Company's Proxy Statement dated April 11, 1996 concerning the
Company's Annual Meeting of Stockholders to be held June 5, 1996; and
(v) all documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the 1934 Act subsequent to the date of this Prospectus
and prior to the termination of the offering made hereby.
</TABLE>

Any statement contained in a document incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that such statement is modified or replaced by a statement contained in
this Prospectus or in any other subsequently filed document that also is or is
deemed to be incorporated by reference into this Prospectus. Any such statement
so modified or superseded shall not be deemed, except as so modified or
replaced, to constitute a part of this Prospectus. The Company will provide
without charge to each person to whom a copy of this Prospectus has been
delivered, upon the written or oral request of any such person, a copy of any
or all of the documents referred to above that have been or may be incorporated
in this Prospectus by reference, other than exhibits to such documents. Written
or oral requests for such copies should be directed to Donald H. Stevens, Vice
President, Barrett Resources Corporation, 1515 Arapahoe Street, Tower 3, Suite
1000, Denver, Colorado 80202, (303) 572-3900.

CERTAIN DEFINITIONS

Unless otherwise indicated in this Prospectus, natural gas volumes are stated
at the legal pressure base of the state or area in which the reserves are
located at 60(degrees) Fahrenheit. Natural gas equivalents are determined using
the ratio of six Mcf of natural gas to one barrel of crude oil, condensate or
natural gas liquids so that one barrel of oil is referred to as six Mcf of
natural gas equivalent or "Mcfe".

As used in this Prospectus, the following terms have the following specific
meanings: "Mcf" means thousand cubic feet, "MMcf" means million cubic feet,
"Bcf" means billion cubic feet, "Bbl" means barrel, "MBbl" means thousand
barrels, "MMBbl" means million barrels, "Mcfe" means thousand cubic feet
equivalent, "MMcfe" means million cubic feet equivalent, "Bcfe" means billion
cubic feet equivalent, and "MMBtu" means million British thermal units.

With respect to information concerning the Company's working interests in
wells or drilling locations, "gross" gas and oil wells or "gross" acres is the
number of wells or acres in which the Company has an interest, and "net" gas
and oil wells or "net" acres are determined by multiplying "gross" wells or
acres by the Company's working interest in those wells or acres. A working
interest in a gas and oil lease is an interest that gives the owner the right
to drill, produce, and conduct operating activities on the property and to
receive a share of production of any hydrocarbons covered by the lease. A
working interest in a gas and oil lease also entitles its owner to a
proportionate interest in any well located on the lands covered by the lease,
subject to all royalties, overriding royalties and other burdens, to all costs
and expenses of exploration, development and operation of any well located on
the lease, and to all risks in connection therewith.

44
<PAGE>

"Behind-pipe recompletion" is the completion of an existing well for
production from a formation that exists behind the casing of the well.

"Capital expenditures" means costs associated with exploratory and
development drilling (including exploratory dry holes); leasehold acquisitions;
seismic data acquisitions; geological, geophysical and land related overhead
expenditures; delay rentals; producing property acquisitions; and other
miscellaneous capital expenditures. "Capital expenditure budget" means an
estimate prepared by management for the total expenditures anticipated to be
incurred during the subject time period. This amount can deviate or fluctuate
due to the timing of drilling of wells, environmental considerations,
acquisition of key fee, state and federal leases, and gas and oil prices.
"Reserve replacement cost" means the cost to the Company of additions to the
Company's reserve base divided by the aggregate costs of developing or
acquiring those additional reserves.

A "development well" is a well drilled as an additional well to the same
horizon or horizons as other producing wells on a prospect, or a well drilled
on a spacing unit adjacent to a spacing unit with an existing well capable of
commercial production and which is intended to extend the proven limits of a
prospect. An "exploratory well" is a well drilled to find commercially
productive hydrocarbons in an unproved area, or to extend significantly a known
prospect.

A "farmout" is an assignment to another party of an interest in a drilling
location and related acreage conditional upon the drilling of a well on that
location. A "farm-in" is an assignment by the owner of a working interest in a
gas and oil lease of the working interest or a portion thereof to another party
who desires to drill on the leased acreage. Generally, the assignee is required
to drill one or more wells in order to earn its interest in the acreage. The
assignor usually retains a royalty or reversionary working interest in the
lease. The assignee is said to have "farmed-in" the acreage.

"Present Value of Estimated Future Net Revenues" means the present value of
estimated future revenues to be generated from the production of proved
reserves calculated in accordance with Commission guidelines, net of estimated
production and future development costs, using prices and costs as of the date
of estimation without future escalation, without giving effect to non-property
related expenses such as general and administrative expenses, debt service,
future income tax expense and depreciation, depletion and amortization, and
discounted using an annual discount rate of 10%.

"Reserves" means natural gas and crude oil, condensate and natural gas
liquids on a net revenue interest basis, found to be commercially recoverable.
"Proved developed reserves" includes proved developed producing reserves and
proved developed behind-pipe reserves. "Proved developed producing reserves"
includes only those reserves expected to be recovered from existing completion
intervals in existing wells. "Proved developed behind-pipe reserves" includes
those reserves that exist behind the casing of existing wells when the cost of
making such reserves available for production is relatively small compared to
the cost of a new well. "Proved undeveloped reserves" includes those reserves
expected to be recovered from new wells on proved undrilled acreage or from
existing wells where a relatively major expenditure is required for
recompletion.

45
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report Of Independent Public Accountants.................................. F-2
Consolidated Balance Sheets as of March 31, 1996 (unaudited) and at
December 31, 1995 and 1994............................................... F-3
Consolidated Statements Of Income for the three months ended March 31,
1996 and 1995 (unaudited) and each of the three years in the period ended
December 31, 1995........................................................ F-4
Consolidated Statements Of Stockholders' Equity for the three months ended
March 31, 1996 and 1995 (unaudited) and each of the three years in the
period ended December 31, 1995........................................... F-5
Consolidated Statements Of Cash Flows for the three months ended March 31,
1996 and 1995 (unaudited) and each of the three years in the period ended
December 31, 1995........................................................ F-6
Notes to the Consolidated Financial Statements............................ F-7
Supplemental Gas And Oil Information...................................... F-22
</TABLE>

F-1
<PAGE>

REPORT OF ARTHUR ANDERSEN LLP

INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors
Barrett Resources Corporation
Denver, Colorado 80202

We have audited the accompanying consolidated balance sheets of Barrett
Resources Corporation (a Delaware corporation) and subsidiaries as of December
31, 1995 and 1994, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Barrett Resources
Corporation and subsidiaries as of December 31, 1995 and 1994, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1995, in conformity with generally accepted
accounting principles.

As explained in Note 8 to the financial statements, effective January 1,
1993, the Company changed its method of accounting for postretirement
benefits.

ARTHUR ANDERSEN LLP

Denver, Colorado
March 1, 1996

F-2
<PAGE>

BARRETT RESOURCES CORPORATION

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------ MARCH 31,
1994 1995 1996
-------- -------- ----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents.................... $ 12,348 $ 7,529 $ 10,945
Receivables, net............................. 34,522 31,089 36,290
Inventory.................................... 643 554 598
Other current assets......................... 1,099 574 535
-------- -------- --------
Total current assets....................... $ 48,612 $ 39,746 $ 48,368
Net property and equipment (full cost method).. 261,424 300,666 313,359
Other assets................................... 916 -- --
-------- -------- --------
$310,952 $340,412 $361,727
======== ======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C>
Current liabilities:
Accounts payable............................. $ 24,587 $ 14,369 $ 14,522
Amounts payable to gas and oil property own-
ers......................................... 16,091 13,366 9,656
Accrued and other liabilities................ 5,468 8,325 15,674
-------- -------- --------
Total current liabilities.................. $ 46,146 $ 36,060 $ 39,852
Long term debt................................. 53,000 89,000 100,000
Deferred income taxes.......................... 21,726 23,524 25,362
Postretirement benefits........................ 927 -- --
Other long-term liabilities.................... 1,017 -- --
Commitments and contingencies--Note 10
Stockholders' equity:
Preferred stock, $0.001 par value: 1,000,000
shares authorized, none outstanding......... -- -- --
Common stock, $0.01 par value: 35,000,000
shares authorized, 25,153,666 outstanding at
March 31, 1996 (25,092,246 and 24,694,669 at
December 31, 1995 and 1994, respectively)... 247 251 252
Additional paid-in capital................... 78,628 86,154 87,382
Retained earnings............................ 109,304 105,890 109,346
Treasury stock, at cost...................... (43) (467) (467)
-------- -------- --------
Total stockholders' equity................. $188,136 $191,828 $196,513
-------- -------- --------
$310,952 $340,412 $361,727
======== ======== ========
</TABLE>

(See accompanying notes)

F-3
<PAGE>

BARRETT RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------- ---------------
1993 1994 1995 1995 1996
-------- -------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Oil and gas production......... $ 80,911 $ 78,794 $ 96,996 $24,981 $29,544
Trading revenues............... 22,955 28,114 28,554 7,788 11,993
Revenue from gas gathering..... 216 353 1,074 291 448
Interest income................ 736 864 714 153 197
Other income................... 1,254 1,333 678 258 125
-------- -------- -------- ------- -------
$106,072 $109,458 $128,016 $33,471 $42,307
Operating expenses:
Lease operating expenses....... $ 30,383 $ 28,223 $ 34,525 $ 8,897 $10,947
Depreciation, depletion and
amortization.................. 20,185 22,760 33,480 8,100 9,404
Cost of trading................ 21,675 27,190 27,611 7,452 11,214
General and administrative..... 11,194 13,261 13,426 3,629 3,618
Interest expense............... 725 942 4,631 941 1,551
Other expenses, net............ 867 645 588 125 --
Merger and reorganization
expense....................... -- -- 14,161 -- --
-------- -------- -------- ------- -------
$ 85,029 $ 93,021 $128,422 $29,144 $36,734
Income (loss) before income taxes
and cumulative effect of change
in method of accounting for
postretirement benefits......... $ 21,043 $ 16,437 $ (406) $ 4,327 $ 5,573
Provision for income taxes....... 6,721 5,138 1,834 1,313 2,117
-------- -------- -------- ------- -------
Income (loss) before cumulative
effect of change in method of
accounting for postretirement
benefits........................ $ 14,322 $ 11,299 $ (2,240) $ 3,014 $ 3,456
Cumulative effect of change in
accounting for postretirement
benefits, net of tax............ (656) -- -- -- --
-------- -------- -------- ------- -------
Net income (loss)................ $ 13,666 $ 11,299 $ (2,240) $ 3,014 $ 3,456
======== ======== ======== ======= =======
Net income (loss) per common
share and common share
equivalent before change in
method of accounting for
postretirement benefits......... $ 0.58 $ 0.46 $ (0.09) $ 0.11 $ 0.14
Net income (loss) per common
share and common share
equivalent--cumulative effect... (0.03) -- -- -- --
-------- -------- -------- ------- -------
Net income (loss) per common
share and common share
equivalent...................... $ 0.55 $ 0.46 $ (0.09) $ 0.11 $ 0.14
======== ======== ======== ======= =======
</TABLE>

(See accompanying notes)

F-4
<PAGE>

BARRETT RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN TREASURY RETAINED STOCKHOLDERS'
STOCK CAPITAL STOCK EARNINGS EQUITY
------ ---------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balances, October 1, 1992 as
previously reported........ $ 97 $39,651 $ -- $ 3,567 $ 43,315
Effect of change to
December 31 year end
Net income for the three
month period ending
December 31, 1992...... -- -- -- 1,333 1,333
Pooling of interests with
Plains Petroleum
Company.................. 128 19,163 -- 84,144 103,435
---- ------- ----- -------- --------
Balance, December 31, 1992
as restated................ $225 $58,814 -- $ 89,044 $148,083
Exercise of stock
options.................. 1 515 (204) -- 312
Issuance of common stock.. 20 18,881 -- -- 18,901
Cash dividends--Plains
common stock............. -- -- -- (2,352) (2,352)
Net income for the year
ended December 31, 1993.. -- -- -- 13,666 13,666
---- ------- ----- -------- --------
Balance, December 31, 1993.. $246 $78,210 $(204) $100,358 $178,610
Exercise of stock
options.................. 1 970 (313) -- 658
Purchase of treasury
stock.................... -- -- (78) -- (78)
Retirement of treasury
stock.................... -- (552) 552 -- --
Cash dividends--Plains
common stock............. -- -- -- (2,353) (2,353)
Net income for the year
ended December 31, 1994.. -- -- -- 11,299 11,299
---- ------- ----- -------- --------
Balance, December 31, 1994.. $247 $78,628 $ (43) $109,304 $188,136
Exercise of stock
options.................. 4 7,690 (588) -- 7,106
Retirement of treasury
stock.................... -- (164) 164 -- --
Cash dividends--Plains
common stock............. -- -- -- (1,174) (1,174)
Net loss for the year
ended December 31, 1995.. -- -- -- (2,240) (2,240)
---- ------- ----- -------- --------
Balance, December 31, 1995.. $251 $86,154 $(467) $105,890 $191,828
Exercise of stock
options.................. 1 1,228 -- -- 1,229
Net income for the quarter
ended March 31, 1996
(unaudited).............. -- -- -- 3,456 3,456
---- ------- ----- -------- --------
Balance, March 31, 1996..... $252 $87,382 $(467) $109,346 $196,513
==== ======= ===== ======== ========
</TABLE>

(See accompanying notes)

F-5
<PAGE>

BARRETT RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
---------------------------- ------------------
(UNAUDITED)
1993 1994 1995 1995 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Cash flows from operations:
Net income (loss).......... $ 13,666 $ 11,299 $ (2,240) $ 3,014 $ 3,456
Adjustments needed to
reconcile to net cash flow
provided by operations:
Depreciation, depletion
and amortization........ 20,185 22,760 33,480 8,100 9,404
Unrealized (gain) loss on
trading................. (124) 58 1,139 -- (1,138)
Deferred income taxes.... 5,975 4,788 1,798 1,213 1,838
Other.................... 782 70 (787) -- --
-------- -------- -------- -------- --------
$ 40,484 $ 38,975 $ 33,390 $ 12,327 $ 13,560
Change in current assets
and liabilities:
Accounts receivables..... (4,304) (8,436) 3,433 6,185 (4,856)
Other current assets..... (209) (148) 525 265 (65)
Accounts payable......... (1,870) 6,803 (524) (14,133) 119
Other current
liabilities............. 7,479 (621) (1,286) 2,334 4,467
-------- -------- -------- -------- --------
Net cash flow provided by
operations.................. $ 41,580 $ 36,573 $ 35,538 $ 6,978 $ 13,225
Cash flows from investing
activities:
Proceeds from sale of gas
and oil properties........ 16,210 458 504 5 135
Purchase of short-term
investments............... (5,952) (11,322) -- -- --
Maturity of short-term
investments............... 1,984 15,290 -- -- --
Acquisition of property and
equipment................. (45,488) (95,589) (82,758) (18,252) (22,173)
Other...................... 65 146 -- (264) --
-------- -------- -------- -------- --------
Net cash flow used in
investing activities........ $(33,181) $(91,017) $(82,254) $(18,511) $(22,038)
Cash flows from financing
activities:
Proceeds from issuance of
common stock.............. 19,212 301 7,071 323 1,229
Purchase of treasury
stock..................... -- (78) -- -- --
Borrowing under line of
credit.................... 1,300 44,000 115,000 15,000 11,000
Payments on line of
credit.................... (7,800) (4,500) (79,000) (2,500) --
Dividends paid............. (2,352) (2,353) (1,174) (590) --
Other...................... 868 (147) -- -- --
-------- -------- -------- -------- --------
Net cash flow provided by
financing activities........ $ 11,228 $ 37,223 $ 41,897 $ 12,233 $ 12,229
Increase (decrease) in cash
and cash equivalents........ 19,627 (17,221) (4,819) 700 3,416
Cash and cash equivalents at
beginning of year........... 9,942 29,569 12,348 12,348 7,529
-------- -------- -------- -------- --------
Cash and cash equivalents at
end of year................. $ 29,569 $ 12,348 $ 7,529 $ 13,048 $ 10,945
======== ======== ======== ======== ========
</TABLE>

(See accompanying notes)

F-6
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION FOR THE THREE MONTH PERIODS ENDED
MARCH 31, 1996 AND 1995 IS UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Barrett is an independent natural gas and oil exploration and production
company with producing properties located in the mid-continent states and
Rocky Mountain region of the United States. Barrett also operates gas
gathering systems and related facilities in the areas which are synergistic to
the Company's production. Barrett has a gas marketing and trading subsidiary,
which allows the Company to market the Company's natural gas production and to
purchase and sell other companies natural gas.

Principles of consolidation

The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly owned. All significant
intercompany transactions have been eliminated in consolidation. Certain
reclassifications have been made to 1993 and 1994 amounts to conform to the
1995 presentation.

Use of estimates

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 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. There are many factors, including global events, that may influence
the production, processing, marketing, and valuation of crude oil and natural
gas. A reduction in the valuation of gas and oil properties resulting from
declining prices or production could adversely impact depletion rates and
ceiling test limitations.

Partnerships

The consolidated financial statements include the Company's proportionate
share of the assets, liabilities, revenues and expenses of its gas and oil
partnership interests.

Cash and cash equivalents

Cash in excess of daily requirements is invested in money market accounts
and commercial paper with maturities of three months or less. Such investments
are deemed to be cash equivalents for purposes of the consolidated statements
of cash flows. The carrying amount of cash equivalents approximates fair value
because of the short maturity of those instruments.

Gas and oil properties

The Company utilizes the full cost method of accounting for gas and oil
properties whereby all productive and nonproductive costs paid to third
parties that are incurred in connection with the acquisition, exploration and
development of gas and oil reserves are capitalized. No gains or losses are
recognized upon the sale, conveyance or other disposition of gas and oil
properties except in extraordinary transactions.

F-7
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Capitalized costs are accumulated on a country-by-country basis subject to a
cost center ceiling and amortized using the units-of-production method. The
Company presently has only one cost center since all of its properties are
located in the United States. Amortizable costs include developmental drilling
in progress as well as estimates of future development costs of proved
reserves but exclude the costs of unevaluated gas and oil properties.
Accumulated depreciation and amortization is written off as assets are
retired. Depletion and amortization equaled approximately $0.55, $0.52 and
$0.48 per Mcfe during the years ended December 31, 1995, 1994 and 1993,
respectively.

The Company capitalizes interest costs on amounts expended on assets during
the period in which activities are occurring to place the asset in service.
Amounts spent to develop properties included in the full cost center of gas
and oil properties are excluded from the interest capitalization computation.

The Company acquires nonproducing acreage for its exploration and
development activities. The cost of these leases is included in unevaluated
gas and oil property costs recorded at the lower of cost or fair market value.

The Company operates many of the wells in which it owns an economic
interest. The operating agreements for these activities provide for a fee
structure to allow the Company to recover a portion of its direct and overhead
charges related to its operating activities. The fees collected under the
operating agreements are recorded as a reduction of general and administrative
expenses. Any amounts collected from a sale of gas and oil interests or earned
as a result of assembling gas and oil drilling activities are applied to
reduce the book value of gas and oil properties.

Other property and equipment

Other property and equipment is recorded at cost. Renewals and betterments
which substantially extend the useful life of the assets are capitalized.
Maintenance and repairs are expensed when incurred. Depreciation is provided
using accelerated and straight-line methods over the estimated useful lives,
ranging from five to ten years, of the assets.

Amounts payable to gas and oil property owners

Amounts payable to gas and oil property owners consist of cash calls from
working interest owners to pay for development costs of properties being
currently developed, production revenue that the Company, as operator, is
collecting and distributing to revenue interest owners and production revenue
taxes that the Company, as operator, has withheld for timely payment to the
tax agencies.

Trading and hedging activities

The Company's business activities include buying and selling of natural gas.
The Company recognizes revenue and costs on gas trading transactions at the
point in time when gas is delivered to the purchaser.

The Company uses both commodity futures contracts and price swaps to hedge
the impact of price fluctuations on a portion of its production and trading
activities. The Company enters into a hedging position for specific
transactions that management deems expose the Company to an unacceptable
market price risk. Price swaps or commodities transactions without
corresponding scheduled physical transactions (scheduled physical transactions
include committed trading activities

F-8
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
or production from producing wells) do not qualify for hedge accounting. The
Company classifies these positions as trading positions and records these
instruments at fair value. Gains and losses are recognized as fair values
fluctuate from time to time compared to cost.

Gains or losses on hedging transactions are deferred until the physical
transaction occurs for financial reporting purposes. Deferred gains and losses
and unrealized gains and losses are evaluated in connection with the physical
transaction underlying the hedge position. Hedging gains or losses
significantly exceeding the price movement of the underlying physical
transaction are recorded in the consolidated statements of income in the
period in which the lack of correlation occurred. Gains or losses on hedging
activities are recorded in the consolidated statements of income as
adjustments of the revenue or cost of the underlying physical transaction.
Hedging transactions are reported as operating activities in the consolidated
statements of cash flows.

Earnings per share

Per share amounts were computed using the weighted average number of shares
of common stock and common stock equivalents outstanding during each year:
1995--24,931,000; 1994--24,967,000 and 1993--24,778,000. Options to purchase
stock are included as common stock equivalents, when dilutive, using the
treasury stock method.

Change in fiscal year

On July 18, 1995, the Company changed its fiscal year-end from September 30
to December 31. A transition report for the period October 1, 1994 through
December 31, 1994 was filed with the Securities and Exchange Commission.
During the three months ended December 31, 1994, the Company reported revenues
of $15 million and net income of $207,000.

Unaudited financial statements:

In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments necessary to present
fairly the financial position of the Company as of March 31, 1996 and the
results of operations and cash flows for the periods presented. All such
adjustments are of a normal recurring nature. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the SEC's rules and regulations. The results of operations for the
periods presented are not necessarily indicative of the results for the full
year.

2. MERGER

On July 18, 1995 Plains was merged with and into a subsidiary of the
Company, resulting in Plains becoming a wholly owned subsidiary of the
Company. Approximately 12.8 million shares of the Company's common stock were
issued in exchange for all of the outstanding common stock of Plains.
Additionally, outstanding options to acquire Plains common stock were
converted to options to acquire approximately 593,000 shares of the Company's
common stock. In connection with the merger, the Company's authorized number
of shares of common stock was increased to 35 million. The merger was
accounted for as a pooling of interests, and accordingly, the accompanying
financial statements have been restated to include the accounts and operations
of Plains for all periods prior to the merger.

F-9
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Plains used the successful efforts method of accounting for its gas and oil
exploration and development activities. In conjunction with the merger, Plains
adopted the full cost method used by the Company resulting in increases of net
property and equipment due to the capitalization of exploration costs,
reversal of impairment and adjustments of depreciation, depletion and
amortization expense for periods prior to the merger. The financial statements
for 1994 and 1993 have been retroactively restated for the change in
accounting method which resulted in increased net income. Retained earnings
and deferred income taxes have been adjusted for the effect of the retroactive
application of the new method.

Certain reclassifications have been made to the historical consolidated
financial statements of the separate companies to conform the financial
statements to a comparable presentation. There were no intercompany
transactions between the Company and Plains. Separate results for the periods
preceding the merger, including the conversion to full cost for Plains and the
change to a December 31 year-end for the Company, were as follows (in 000s):

<TABLE>
<CAPTION>
BARRETT PLAINS(1) ADJUSTMENTS(2) COMBINED
------- --------- -------------- --------
<S> <C> <C> <C> <C>
Six month period ended (unaudited): 6/30/95 6/30/95 6/30/95
Net revenues....................... $29,277 $ 35,823 -- $ 65,100
Net income......................... 2,200 3,771 -- 5,971
Twelve month period ended............ 9/30/94 12/31/94 12/31/94
Net revenues....................... $41,252 $ 63,024 $ 5,182 $109,458
Net income......................... 4,439 7,768 (908) 11,299
Twelve month period ended............ 9/30/93 12/31/93 12/31/93
Net revenues....................... $42,686 $ 64,998 $(1,612) $106,072
Net income......................... 5,756 8,128 (218) 13,666
</TABLE>
- --------
(1) Restated to full cost to conform accounting policies
(2) To conform year ends

In connection with the merger, approximately $14.2 million of merger and
reorganization costs and expenses were incurred and have been charged to
expense in the Company's third and fourth quarters of fiscal 1995. These
nonrecurring costs and expenses consist of (1) investment banker and
professional fees of $7.4 million; (2) severance and employee benefit costs of
$5.6 million for approximately 38 employees, terminated through consolidation
of administrative and operational functions; (3) a non-cash credit of
approximately $0.9 million associated with the termination of Plains'
postretirement benefit plans and other related benefit plans and (4) other
merger and reorganization related costs of $2.1 million.

3. RECEIVABLES

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Gas and oil revenue receivable.................................. $13,257 $15,535
Joint interest billings......................................... 14,542 7,652
Trading receivables............................................. 6,483 5,665
Other accounts receivable....................................... 240 2,237
------- -------
$34,522 $31,089
======= =======
</TABLE>

F-10
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Company's accounts receivable are primarily due from medium size gas and
oil entities in the Rocky Mountain region. Collection of joint interest
billings is generally secured by future production. The Company performs
periodic credit evaluations of customers purchasing production for which no
collateral is required. Historically, the Company has not experienced
significant losses related to these extensions of credit.

As of December 31, 1995 and 1994, receivables are recorded net of allowance
for doubtful accounts of $201,000 and $224,000, respectively.

4. PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1994 1995
-------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Oil and gas properties, full cost method:
Unevaluated costs, not being amortized. .............. $ 12,611 $ 10,579
Evaluated costs....................................... 346,950 420,784
Gas gathering systems................................. 8,388 8,815
Furniture, vehicles and equipment....................... 9,765 9,801
-------- --------
$377,714 $449,979
Less accumulated depreciation, depletion, amortization
and impairment......................................... 116,290 149,313
-------- --------
$261,424 $300,666
======== ========
</TABLE>

The Company capitalized interest costs of $0.4 million in 1995 with respect
to qualifying properties. Total interest costs incurred after recognition of
the capitalized interest amount was $4.6 million in 1995.

5. UNEVALUATED OIL AND GAS PROPERTY COSTS

Unevaluated gas and oil property costs consist of the following:

<TABLE>
<CAPTION>
COSTS INCURRED DURING
-------------------------------
1992 1993 1994 1995 TOTAL
---- ---- ------ ------ -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Acquisition costs........................... $71 $-- $2,130 $5,623 $ 7,824
Exploration costs........................... 11 32 53 2,659 2,755
--- ---- ------ ------ -------
$82 $ 32 $2,183 $8,282 $10,579
=== ==== ====== ====== =======
</TABLE>

The unevaluated costs were incurred for projects which are being explored.
The Company anticipates that substantially all unevaluated costs will be
classified as evaluated costs within the next three years.

6. LONG TERM DEBT

The Company has a reserve-based line of credit with a group of banks which
provides up to $200 million for a four year period ending July 19, 1999. The
amount actually available to the Company

F-11
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
under the line at any given time is limited to the collateral value of proved
reserves as determined by the lenders. Based on the lenders' determination of
collateral value, as of December 31, 1995 (which was based on the March 31,
1995 and December 31, 1994 reserve reports), the Company has a borrowing limit
of $160 million. In order to reduce the commitment fees, the Company
voluntarily requested that the lenders limit the maximum borrowing to $90
million through December 31, 1995. Subsequent to December 31, 1995, the
Company increased the maximum borrowing limit to $110 million. The lenders are
currently reviewing the December 31, 1995 reserve report to determine current
collateral value. The Company is required to pay interest only during the
revolving period. At its option, the Company has elected to use the London
interbank eurodollar rate (LIBOR) plus a spread ranging from 0.5 percent to
1.0 percent (depending on the Company's borrowing relative to its borrowing
base) for a substantial portion of the outstanding balance. As of December 31,
1995 the Company's outstanding balance under the line of credit was $89
million of which $83 million was accruing interest at an average LIBOR based
rate of 6.62 percent and $6 million was accruing interest on a prime based
rate of 8.50 percent. The line of credit agreement restricts the payment of
dividends, borrowings, sale of assets, loans to others, investment and merger
activity over certain limits without the prior consent of the bank and
requires the Company to maintain certain net worth and debt to equity levels.
Based on the variable borrowing rates and re-pricing terms currently available
to the Company for the line of credit, management believes the fair value of
long-term debt approximates the carrying value. As of March 31, 1996, the
Company's outstanding balance under the line of credit was $100 million, all
of which was accruing interest at an average rate of 6.3%.

7. OPTIONS

The Company has two employee stock option plans, a 1990 Plan and a 1994
Plan, under which the Company's common stock may be granted to officers and
employees of the Company and subsidiaries. The 1990 Plan, as amended, provided
for the granting of 775,000 shares. The 1994 Plan provides for the granting of
400,000 shares of the Company's common stock. In addition, the Company has a
non-discretionary stock option plan under which options for an aggregate of
100,000 shares of the Company's common stock may be granted to non-employee
directors. In connection with the merger discussed in Note 2, the Company
assumed preexisting Plains stock option plans and converted all options then
outstanding into options to acquire shares of the Company's common stock. No
further options will be granted under the Plains' plans.

Summary of options granted, exercised and outstanding during 1994 and 1995
is as follows:

<TABLE>
<CAPTION>
OPTION
NUMBER OF SHARES OPTION PRICE VALUE
---------------- ------------- --------
($000'S)
<S> <C> <C> <C>
Outstanding at December 31, 1993...... 336,500 $ 3.88-$13.38 $ 1,949
Plains outstanding options............ 592,611 $15.91-$27.50 13,962
--------- ------------- -------
Outstanding at December 31, 1993, re-
stated............................... 929,111 $ 3.88-$27.50 15,911
Granted............................... 585,500 $10.38-$20.88 8,560
Exercised or canceled................. (154,820) $ 3.88-$12.13 (712)
--------- ------------- -------
Outstanding at December 31, 1994...... 1,359,791 $ 3.88-$27.50 23,759
Granted............................... 110,000 $13.38-$22.75 2,454
Exercised or canceled................. (477,460) $ 3.88-$27.50 (9,443)
--------- ------------- -------
Outstanding at December 31, 1995...... 992,331 $ 5.00-$26.94 $16,770
========= ============= =======
Exercisable at December 31, 1995...... 354,883 $ 5.13-$26.94 $ 6,349
========= ============= =======
</TABLE>

F-12
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

8. RETIREMENT BENEFITS

The Company has a voluntary 401(k) employee savings plan. Under this plan,
the Company matches 50% of each of the participating employees contributions,
up to a maximum of 6% of base salary. Effective April 1, 1996, the Company's
match will be increased to 100% of each of the participating employees
contributions, up to a maximum of 6% of base salary, with one-half of the
match paid in cash and one half of the match paid in the Company's common
stock. The Company's matching contributions are subject to a vesting schedule.
Company contributions were $239,000, $179,000 and $166,000 in 1995, 1994 and
1993, respectively.

Plains had several employee benefit plans described below. Pursuant to the
terms of the merger agreement between Plains and the Company, these plans were
terminated.

Plains' qualified, defined benefit retirement plan covered substantially all
of its employees. The benefits were based on a specified level of the
employees compensation during plan participation. As of July 18, 1995, the
plan froze benefit accruals. Pursuant to the plan, all participants became
fully vested. Plan assets consist of cash and equivalents, corporate stocks
and bonds, U.S. treasury notes, insured annuity contracts, and accrued
interest. Contributions totaled $169,000, $312,000 and $341,000 for the 1995,
1994 and 1993 plan years, respectively.

The following table sets forth the plans funded status:

<TABLE>
<CAPTION>
1993 1994 1995
------- ------- ------
(IN THOUSANDS)
<S> <C> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested
benefits of $2,961,000, $1,637,000 and $1,290,000
respectively........................................ $(1,383) $(1,666) $2,961
======= ======= ======
Projected benefit obligation......................... $(2,321) $(2,396) $2,961
Plan assets at fair value............................ 1,977 2,205 2,709
------- ------- ------
Projected benefit obligation in excess of plan
assets.............................................. $ (344) $ (191) $ (252)
Unrecognized net (gain) loss......................... 16 (141) --
Prior service cost not yet recognized in net periodic
pension costs....................................... 64 93 --
Unrecognized net obligation being recognized over 9.5
and 10.5 years in 1994 and 1993, respectively....... 146 132 --
------- ------- ------
Accrued pension cost................................. $ (118) $ (107) $ (252)
======= ======= ======
Net pension cost included the following components:
Service cost--benefits earned........................ $ 346 $ 290 $ 140
Interest cost on projected benefit obligation........ 150 157 160
Actual loss (return) on plan assets.................. (145) 70 (369)
Net amortization of unrecognized obligation and
deferral............................................ 28 (216) 347
Curtailment gain..................................... -- -- (735)
------- ------- ------
Net periodic pension cost (benefit).................. $ 379 $ 301 $ (457)
======= ======= ======
</TABLE>

The weighted average discount rate used in determining the actuarial present
value of the projected benefit obligation was 4.5% (termination rates). The
rate of increase used for compensation levels was nil in 1995 and 5% in 1994
and 1993, respectively. The expected long-term rate of return on assets was
8.5%.

F-13
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Plains also contributed the lesser of 10% of its net earnings or 10% of
employee compensation to a profit sharing plan of Plains. No contributions
were made for 1995. Plains contributed $334,000 and $188,000 for 1994 and
1993, respectively.

Through June 30, 1995 and during 1994, Plains matched 401(k) plan deferrals
with contributions equal to 50% of each deferral up to 6% of current salary.
This matching contribution was invested in Plains stock and were subject to a
vesting schedule. Participants became fully vested with the merger with and
into Barrett. Contributions were approximately $112,000, $192,000 and $250,000
for 1995, 1994 and 1993, respectively.

The above described profit-sharing and 401(k) plans were terminated July 1,
1995; the pension plans were terminated September 18, 1995. Internal Revenue
Service approval for termination of these plans was received in January 1996.
Final distribution of plan assets will be made to participants in the second
quarter of 1996.

Plains' executive deferred compensation plan and directors' deferred plan
permitted the deferral of current salary or directors' fees for the purpose of
providing funds at retirement or death for employees, directors and their
beneficiaries. These plans were terminated effective June 30, 1995 and will be
disbursed to the participants by the trustee of the assets over a period
ending January 1, 1997. Total accrued liability under these plans at December
31, 1995 and 1994 was $36,000 and $1,006,000, respectively.

Concurrently with the effective date of the merger, Plains' postretirement
healthcare benefit and salary continuation plans were terminated. Participants
in the salary continuation plan received (1) a lump sum benefit equal to the
present value of the remaining monthly payments if receiving Death Benefits
under the plan at the date of the termination, or (2) insurance polices, the
cost of which was limited to the cash values of the life insurance policies
owned by Plains. Benefits associated with the postretirement healthcare
benefit plan were terminated and, accordingly, accrued postretirement benefit
costs were relieved.

Effective January 1, 1993, Plains adopted Statement No. 106 (FAS 106) issued
by the Financial Accounting Standards Board on accounting for postretirement
benefits other than pensions. In accordance with this statement, Plains
elected to recognize the accumulated postretirement benefit liability as of
the effective date, totaling approximately $800,000 (pretax). With the
termination of these plans in 1995, all future obligations were settled and
ceased to exist.

F-14
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Obligations for previous periods were as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1994
-----------------
(IN THOUSANDS)
<S> <C> <C>
Accumulated postretirement benefit obligation:
Active plan participants......................... $(458)
Retirees......................................... (302)
-----
$(760)
Plan assets...................................... 0
-----
Net accumulated postretirement benefit
obligation...................................... $(760)
Unrecognized net gain from past experience
different from that assumed and from changes in
assumptions..................................... (167)
-----
Accrued postretirement benefit cost.............. $(927)
=====
Net periodic postretirement benefit cost included
the following components:
Service cost of benefits earned.................. $ 41
Interest cost on accumulated postretirement
benefit obligation.............................. 61
-----
Net periodic postretirement benefit cost......... $ 102
=====
</TABLE>

9. HEDGING ACTIVITIES

The Company uses various hedging techniques to reduce the effect of price
volatility on the sales price of a portion of its gas and oil sales. The
objective of its hedging activities is to achieve more predictable revenues
and cash flows. The following is a summary of the Company's hedging
transactions in effect as of December 31, 1995.

A. The Company is the fixed price payor for hedging transactions relating to
6,000 MMBtu of gas per day for 1996 at $1.33 per MMBtu and approximately 7,000
MMBtu of gas per day for January through May 1996 at an average price of $2.12
per MMBtu. Under these price swap arrangements, the Company has agreed to buy
gas at a fixed price and sell gas at an index price. These price swaps were
entered to accommodate markets desiring fixed price supplies.

B. The Company will receive fixed prices ranging from $1.46 to $2.12 per
MMBtu in swap transactions associated with an average of 52,000 MMBtu of gas
per day to be produced by the Company subsequent to December 31, 1995 through
March 1996. The Company is required to pay an index price to its financial
counterparty. The Company sold a call option on 20,000 MMBtu per day for April
through October 1996. Under this option, the Company will receive $1.86 per
MMBtu should the option holder elect to exercise.

C. The Company's gas hedges also include a collar in which the Company sold
a call and purchased a put with respect to 10,000 MMBtu per day in 1996 with
an average floor (put) price of $1.60 per MMBtu and an average ceiling (call)
price of $1.92 per MMBtu. Under this arrangement, the Company receives a
payment if the index price falls below the floor and makes a payment to the
counterparty if the index price exceeds the ceiling. To reduce exposure to
increasing index prices, the Company purchased call options with prices
averaging $2.673 per MMBtu January-March and $1.969 per MMBtu April-December,
1996.

F-15
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

D. The Company has entered into basis swaps to minimize different index
price fluctuations. The Company will receive a payment in the event that the
New York Mercantile Exchange ("NYMEX") price per MMBtu for a reference period
exceeds the average specified index price by more than an average of $0.29 on
10,000 MMBtu of gas per day from January through March 1996 ($0.44 on 5,000
MMBtu of gas per day for April 1996). In separate basis swaps, the Company
will receive a payment in the event the specified index price exceeds the
NYMEX price net of a basis adjustment of an average of $0.48 on 10,000 MMBtu
of gas per day from January through October 1996. Conversely, the Company will
be required to make payments to the counterparty if the opposite situation
exists in these swaps. These swaps were entered to offset a portion of the
risk associated with the Company's long-term firm transportation portfolio.

E. With respect to crude oil production, the Company entered into a price
swap whereby the Company will receive a fixed price of $18.00 per Bbl for
1,000 Bbls per day through March 1996. The Company is required to pay the
counterparty a NYMEX settlement price.

As of December 31, 1995, some of the Company's hedging positions described
above did not qualify for hedge accounting due to reduced correlation between
the index price and the prices to be realized for certain physical gas
deliveries. Accordingly, the Company recognized hedging losses of $1.2 million
in the fourth quarter of 1995. These losses offset hedging gains of $1.6
million realized in 1995. The net hedging gain was included in gas and oil
revenues. The Company paid and received certain premiums related to its option
contracts for future periods. The unrealized hedging losses and net deferred
premium costs have been included in other liabilities.

During the first quarter ended March 31, 1996, the Company recognized net
production hedging expense of $812,000 which was recorded in the consolidated
statements of income as adjustments of gas and oil production revenue. As of
March 31, 1996, the Company held positions to hedge production of 0.075 Bcf of
gas and 91 MBbls of oil.

During 1995, the Company incurred a net cost of $2.1 million to hedge the
index based price for a portion of its gas purchased in various transactions
for gas trading activities. These payments allowed the Company to purchase gas
on a fixed price basis to satisfy fixed price sales commitments. This hedging
allowed the Company to avoid gas price fluctuations for the related
transactions so that the Company realized the gross profit margins anticipated
upon entering into the trading arrangements. This hedging cost is included in
the income statement as a component of "Cost of Trading."

10. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The minimum future payments under the terms of operating leases, principally
for office space, are as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Year ended December 31, 1996.. $1,012
1997........................ 988
1998........................ 1,001
1999........................ 887
2000........................ 610
2001........................ 205
------
$4,703
======
</TABLE>

The Company plans to sublet office space vacated with the consolidation and
relocation of its Denver offices and accordingly anticipates a substantial
reduction in rental expense for the years 1996 through 1999. Rent expense was
$956,000, $859,000 and $788,000 for the years ended December 31, 1995, 1994
and 1993, respectively.

F-16
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Litigation

On November 2, 1994, a putative class action was filed in Delaware Chancery
Court. In that case, entitled Miller v. Cody, the plaintiff has alleged that
certain named former directors of Plains, and Plains, have, among other
things, breached their fiduciary duties and otherwise acting to entrench
themselves in office. Plaintiff seeks various forms of injunctive relief,
damages and an award of plaintiff's costs and disbursements.

On May 3, 1995, the same day Plains announced it had executed a merger
agreement with the Company, a putative class action, entitled Crandon Capital
Partners v Miller, was filed in Delaware Chancery Court against Plains and the
then-current members of its Board of Directors. In this suit it is alleged
that, among other things, the agreement was inadequate, plaintiff seeks
various forms of declaratory and injunctive relief, damages and an award of
plaintiff's costs and disbursements.

In March 1996, these two putative class actions were dismissed without
prejudice. No defendant paid any consideration for such dismissals.

At December 31, 1995, the Company was a party to certain other legal
proceedings which have arisen out of the ordinary course of business. Based on
the facts currently available, in managements opinion the liability,
individually or in the aggregate, if any, to the Company resulting from such
actions will not have a material adverse effect on the Company's consolidated
financial position or results of operations.

Environmental Controls

At year end 1995, there were no known environmental or other regulatory
matters related to the Company's operations which are reasonably expected to
result in a material liability to the Company. Compliance with environmental
laws and regulations has not had, and is not expected to have, a material
adverse effect on the Company's capital expenditures, earnings or competitive
position.

Major Purchaser

During 1995, one purchaser accounted for 18 percent of the Company's total
revenue (24 percent of gas and oil revenues.) Sales of gas to this purchaser
represented 19 percent and 29 percent of total revenues in 1994 and 1993,
respectively.

11. INCOME TAXES

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
1993 1994 1995
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal................................................. $ 174 $ 233 $ 269
State................................................... 416 117 (233)
------ ------ ------
$ 590 $ 350 $ 36
Deferred:
Federal................................................. $5,138 $4,511 $2,039
State................................................... 993 277 (241)
------ ------ ------
$6,131 $4,788 $1,798
------ ------ ------
$6,721 $5,138 $1,834
====== ====== ======
</TABLE>

F-17
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The difference between the provision for income taxes and the amounts which
would be determined by applying the statutory federal income tax rate to
income before provision for income taxes is analyzed below:

<TABLE>
<CAPTION>
1993 1994 1995
------- ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Tax by applying the statutory federal income tax rate
to pretax accounting income (loss).................. $ 7,365 $5,753 $ (138)
Increase (decrease) in tax from:
Change in valuation allowance...................... (1,477) (2,148) 396
State income taxes................................. 1,409 394 (474)
Non-deductible merger costs........................ -- -- 2,429
Other, net......................................... (576) 1,139 (379)
------- ------ ------
$ 6,721 $5,138 $1,834
======= ====== ======
</TABLE>

Long-term deferred tax assets (liabilities) are comprised of the following
at December 31, 1995 and 1994:

<TABLE>
<CAPTION>
1994 1995
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Allowance for losses..................................... $ 624 $ 81
Loss carryforwards and other............................. 30,221 26,520
-------- --------
Gross deferred tax assets.............................. $ 30,845 $ 26,601
Deferred tax liabilities:
Deferred revenue--partnership activities................. $ (1,086) $ (466)
Depreciation, depletion and amortization................. (50,650) (48,460)
Capitalized interest on other assets..................... (38) (6)
-------- --------
Gross deferred tax liabilities......................... $(51,774) $(48,932)
Net deferred tax liability........................... (20,929) (22,331)
Valuation allowance.................................. (797) (1,193)
-------- --------
$(21,726) $(23,524)
======== ========
</TABLE>

Valuation allowances of $1,193,000 and $797,000 were provided at December
31, 1995 and 1994, respectively, based on carryforward amounts which may not
be utilized before expiration and the possible effect of exploratory drilling
costs.

F-18
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Company has the following net operating loss and investment tax credit
carryforwards available:

<TABLE>
<CAPTION>
EXPIRATION NET OPERATING INVESTMENT
YEAR LOSS TAX CREDIT
---------- ------------- ----------
(IN THOUSANDS)
<S> <C> <C>
1996....................... $ 4,227 $172
1997....................... 4,673 246
1998....................... 8,090 103
1999....................... 6,530 100
2000....................... 4,900 25
2001....................... 3,274 5
2002....................... 108 --
2004....................... 197 --
2005....................... 685 --
2006....................... 1,446 --
2007....................... 37 --
2008....................... 22,352 --
2009....................... 6,123 --
------- ----
Total...................... $62,642 $651
======= ====
</TABLE>

A substantial portion of the net operating losses were acquired in
conjunction with purchased operations.

The 1990 public offering of common stock by the Company before the Plains
merger resulted in a change in the Company's ownership as defined in Section
382 of the Internal Revenue Code. The effect of this change in ownership
limits the utilization of net operating losses for income tax purposes to
approximately $3,069,000 per year which affects $13,590,000 of the net
operating losses. The 1995 merger with Plains also resulted in a change in the
Company's and Plains' ownership as defined by Section 382 of the Internal
Revenue Code. The change effectively limits the utilization of the remaining
net operating losses for income tax purposes to approximately $14,000,000 for
each company. Portions of the above limitations which are not used each year
may be carried forward to future years.

The Internal Revenue Service (IRS) has examined the federal tax returns of
Plains for the calendar years 1991, 1992 and 1993. In a report to the Company,
transmitted by a "30-day letter" that requests a response by the Company
within a 30 day period, the IRS has proposed a tax deficiency of $5.3 million
together with penalties of $1.1 million, and an undetermined amount of
interest. The IRS proposed deficiency resulted primarily from the disallowance
of certain net operating loss deductions claimed during the periods under
examination. These net operating losses originally were incurred by a company
that was acquired by Plains in 1986. The Company currently has additional
unused net operating loss carryforwards of approximately $30 million related
to the same acquisition.

Management disagrees with the IRS position, and the Company has rejected the
IRS's position by refusing to accept the adjustments proposed in the 30-day
letter. In management's opinion, the federal tax returns of Plains under
examination reflect the proper federal income tax liability and the existing
net operating loss carryforwards are appropriate as supported by relevant
authority. The Company will vigorously contest these proposed adjustments and
believes it will prevail in its positions. It is anticipated that the final
determination of this matter will involve a lengthy process.

F-19
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

12. SUPPLEMENTAL CASH FLOW SCHEDULES AND INFORMATION

<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ------
(IN THOUSANDS)
<S> <C> <C> <C>
CASH PAID DURING YEARS:
Income tax................................................... $426 $338 $ 65
Interest..................................................... 792 711 5,129

SUPPLEMENTAL INFORMATION OF NONCASH INVESTING AND FINANCING ACTIVITIES:

Issuance of common stock exchanged for treasury shares in
cashless option transactions................................ $204 $313 $ 545
</TABLE>

In May 1994, Plains completed a contingent provision of the 1990 McAdams,
Roux and Associates, Inc. (MRA) Agreement and Plan of Merger, as it related to
the right of the MRA shareholders to receive additional shares of Plains'
common stock and cash subject to reserves additions on certain property
interests owned by MRA prior to the merger. Under this Agreement, 31,873
shares of Plains' common stock were issued and a cash payment of $1.5 million
was paid to MRA's shareholders in settlement of this obligation.

13. RELATED PARTIES

During the years ended December 31, 1995, 1994 and 1993 Zenith was billed by
the Company as operator, approximately $1,062,000, $1,853,000 and $2,555,000,
respectively, for Zenith's portion of lease operating expenses and development
costs in certain leases operated by the Company. Also as a result of Zenith's
working interest ownership, the Company distributed gas and oil revenue of
approximately $942,000, $936,000 and $1,074,000 to Zenith during 1995, 1994
and 1993, respectively. Zenith owns its working interests subject to the same
terms and arrangements that exist for all working interest owners in the
properties. Zenith owns approximately three percent of the Company's common
stock and its president is a member of the Company's board of directors.

During 1993, the Company and Zenith both sold their respective interests in
the Wattenberg field. The Company and Zenith jointly negotiated the sale but
the purchaser independently determined the individual offer prices and entered
into separate sales agreements with each party.

Grand Valley Corporation owns approximately 10 percent of a pipeline joint
venture for gas gathering of which a subsidiary of the Company owns
approximately 29 percent. A member of the Company's board of directors owns 10
percent of the outstanding stock, and is the president of Grand Valley
Corporation. His three adult children own the remaining 90 percent of the
outstanding stock of Grand Valley Corporation.

14. QUARTERLY INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------
3/31/95 6/30/95 9/30/95 12/31/95
--------- --------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
1995
Net revenues....................... $ 33,060 $ 31,277 $ 27,217 $ 35,070
Gross margin....................... 8,611 8,039 6,476 7,882
Income (loss) from operations...... 4,327 3,997 (11,389) 2,659
Net income (loss).................. 3,014 2,957 (11,848) 3,637
Net income (loss) per share........ 0.11 0.13 (0.47) 0.14
</TABLE>

F-20
<PAGE>

BARRETT RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------------
3/31/94 6/30/94 9/30/94 12/31/94
--------- --------- --------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
1994
Net revenues......................... $ 25,543 $ 24,420 $ 24,222 $ 33,076
Gross margin......................... 8,572 7,499 6,027 6,990
Income from operations............... 5,217 3,869 2,834 4,517
Net income........................... 3,799 2,610 2,081 2,809
Net income per share................. 0.15 0.12 0.08 0.11
<CAPTION>
THREE MONTHS ENDED
----------------------------------------
3/31/93 6/30/93 9/30/93 12/31/93
--------- --------- --------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
1993
Net revenues......................... $ 30,258 $ 26,157 $ 22,836 $ 24,831
Gross margin......................... 8,832 8,759 6,902 7,346
Income from operations............... 6,163 5,649 4,845 4,386
Income before cumulative effect of
change in method of accounting for
income taxes........................ 3,828 3,492 3,934 3,068
Net income........................... 3,172 3,492 3,934 3,068
Earnings per share:
From continuing operations......... 0.16 0.14 0.16 0.12
Net income......................... 0.13 0.14 0.16 0.12
</TABLE>

15. SUBSEQUENT EVENT (UNAUDITED)

On April 10, 1996, the Company acquired for $2.7 million additional gas and
oil interests located in the Piceance Basin from Zenith. In addition, GVC was
merged into and with a subsidiary of the Company in exchange for 350,000
shares of the Company's Common Stock. Through this merger, the Company
increased its interest in the Grand Valley Gathering System to approximately
39.5%.

Mr. C. Robert Buford, a director of the Company, owned 89 percent of the
outstanding stock of Zenith. Prior to the merger of GVC into the Company, Mr.
Buford owned 10 percent of GVC outstanding stock and his three adult children
owned the remaining 90 percent. A Special Committee of the Board of Directors
of the Company negotiated the terms of these transactions and obtained a
fairness opinion regarding such terms from an investment banking firm.

F-21
<PAGE>

SUPPLEMENTAL GAS AND OIL INFORMATION

The following is information pertaining to the Company's gas and oil
producing activities for the years ended December 31, 1995, 1994 and 1993.

Costs incurred in gas and oil property acquisition, exploration, and
development activities:

<TABLE>
<CAPTION>
1993 1994 1995
-------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Acquisition of evaluated properties............... $ 6,119 $35,234 $ 7,429
Acquisition of unevaluated properties............. 1,013 8,446 8,383
Exploration costs................................. 12,593 36,232 23,272
Development costs................................. 21,538 20,190 33,029
Other, principally proceeds from mineral convey-
ances............................................ (15,680) (173) (426)
-------- ------- -------
Total additions to gas and oil properties......... $ 25,583 $99,929 $71,687
======== ======= =======
</TABLE>

GAS AND OIL RESERVE INFORMATION (UNAUDITED):

The following reserve related information for 1995 is based on estimates
prepared by the Company. The 1995 reserve information for the Company,
exclusive of the reserves owned by its subsidiary, Plains, were reviewed by
Ryder Scott, an independent reservoir engineer. The 1995 reserve information
for Plains was reviewed by Netherland, Sewell & Associates, Inc., an
independent reservoir engineer. The Company's 1994 and 1993 reserves,
exclusive of Plains were prepared by the Company and reviewed by Ryder Scott
as of September 30, of each year. The 1994 and 1993 proved developed reserve
estimates of Plains were prepared by Netherland, Sewell & Associates, Inc.
whereas the proved undeveloped reserve estimates were prepared by Plains.
Reserve estimates are inherently imprecise and are continually subject to
revisions based on production history, results of additional exploration and
development, prices of gas and oil and other factors.

PROVED DEVELOPED AND UNDEVELOPED RESERVES:

<TABLE>
<CAPTION>
1993 1994 1995
--------------------- --------------------- ---------------------
GAS (MMCF) OIL (MBBL) GAS (MMCF) OIL (MBBL) GAS (MMCF) OIL (MBBL)
---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
PROVED RESERVES:
Beginning of year....... 370,621 10,553 364,791 6,947 458,820 11,444
Revisions of previous
estimates.............. (5,418) (3,426) (5,640) 772 (3,805) 1,209
Purchase of minerals in
place.................. 6,794 217 38,717 2,533 3,983 831
Extensions and discover-
ies.................... 28,482 1,208 94,276 2,547 102,329 1,232
Production.............. (31,712) (1,293) (33,282) (1,293) (47,692) (1,702)
Sale of minerals in
place.................. (3,976) (312) (42) (62) (104) (47)
------- ------ ------- ------ ------- ------
End of year............. 364,791 6,947 458,820 11,444 513,531 12,967
======= ====== ======= ====== ======= ======
PROVED DEVELOPED RE-
SERVES:
Beginning of year....... 350,131 7,398 342,287 5,548 393,051 7,848
End of year............. 342,287 5,548 393,051 7,848 419,672 11,669
</TABLE>

F-22
<PAGE>

The following is the standardized measure of discounted future net cash
flows relating to proved gas and oil reserves in which the Company has an
interest.

<TABLE>
<CAPTION>
1993 1994 1995
--------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Future cash inflows......................... $ 789,693 $ 931,404 $1,132,711
Future production costs..................... (266,920) (310,485) (355,756)
Future development costs.................... (22,349) (41,972) (46,888)
Future income tax expenses.................. (135,165) (152,890) (207,922)
--------- --------- ----------
Future net cash flows....................... $ 365,259 $ 426,057 $ 522,145
10% annual discount for estimated timing of
cash flows................................. (162,173) (183,436) (212,271)
--------- --------- ----------
Standardized measure of discounted future
net cash flows............................. $ 203,086 $ 242,621 $ 309,874
========= ========= ==========
</TABLE>

The future income tax expenses have been computed considering the tax basis
of the gas and oil properties, and net operating and other loss carryforwards.

The following are the principal sources of changes in the standardized
measure of discounted future net cash flows:

<TABLE>
<CAPTION>
1993 1994 1995
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Net change in sales price and production costs.. $ 12,283 $(22,409) $ 24,558
Changes in estimated future development costs... 11,160 14,492 10,301
Sales and transfers of gas and oil produced,
net of production costs........................ (53,594) (50,571) (62,294)
Net change due to extensions and discoveries.... 20,739 60,613 85,524
Net change due to purchases and sales of miner-
als in place................................... (1,210) 32,726 7,424
Net change due to revisions in quantities....... (18,272) (588) (1,393)
Net change in income taxes...................... (4,711) (10,202) (33,172)
Accretion of discount........................... 26,965 27,589 23,112
Other, principally revisions in estimates of
timing
of production.................................. 5,859 (12,115) 13,193
-------- -------- --------
Net changes..................................... $ (781) $ 39,535 $ 67,253
Balance, beginning of year...................... 203,867 203,086 242,621
-------- -------- --------
Balance, end of year............................ $203,086 $242,621 $309,874
======== ======== ========
</TABLE>

F-23
<PAGE>

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the U.S. Underwriters named below, and
each of such U.S. Underwriters, for whom Goldman, Sachs & Co., Salomon
Brothers Inc, Howard, Weil, Labouisse, Friedrichs Incorporated and Petrie
Parkman & Co., Inc. are acting as representatives, has severally agreed to
purchase from the Company, the respective number of shares of Common Stock set
forth opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
UNDERWRITER COMMON STOCK
----------- ------------
<S> <C>
Goldman, Sachs & Co................................................
Salomon Brothers Inc...............................................
Howard, Weil, Labouisse, Friedrichs Incorporated...................
Petrie Parkman & Co., Inc..........................................

---------
Total............................................................ 3,200,000
=========
</TABLE>

Under the terms and conditions of the Underwriting Agreement, the U.S.
Underwriters are committed to take and pay for all of the shares offered
hereby, if any are taken.

The U.S. Underwriters propose to offer the shares of Common Stock in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus and in part to certain securities dealers at
such price less a concession of $ per share. The U.S. Underwriters may
allow, and such dealers may reallow, a concession not in excess of $ per
share to certain brokers and dealers. After the shares of Common Stock are
released for sale to the public, the offering price and other selling terms
may from time to time be varied by the representatives.

The Company has entered into an underwriting agreement (the "International
Underwriting Agreement") with the underwriters of the international offering
(the "International Underwriters") providing for the concurrent offer and sale
of 800,000 shares of Common Stock in an international offering outside the
United States. The offering price and aggregate underwriting discounts and
commissions per share for the two offerings are identical. The closing of the
offering made hereby is a condition to the closing of the international
offering, and vice versa. The representatives of the International
Underwriters are Goldman Sachs International, Salomon Brothers International
Limited, Howard, Weil, Labouisse, Friedrichs Incorporated and Petrie Parkman &
Co., Inc.

Pursuant to an Agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between") relating to the two offerings, each of
the U.S. Underwriters named herein has agreed that, as a part of the
distribution of the shares offered hereby and subject to certain exceptions,
it will offer, sell or deliver the shares of Common Stock, directly or
indirectly, only in the United States of America (including the States and the
District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (the "United States") and to U.S. persons, which
term shall mean, for purposes of this paragraph: (a) any individual who is a
resident of the United States or (b) any corporation, partnership or other
entity organized in or under the laws of the United States or any political
subdivision thereof and whose office most directly involved with the purchase
is located in the United States. Each of the International Underwriters has
agreed pursuant to the Agreement Between that, as a part of the distribution
of the shares offered as a part of the international offering, and subject

U-1
<PAGE>

to certain exceptions, it will (i) not, directly or indirectly, offer, sell or
deliver shares of Common Stock (a) in the United States or to any U.S. persons
or (b) to any person who it believes intends to reoffer, resell or deliver the
shares in the United States or to any U.S. persons, and (ii) cause any dealer
to whom it may sell such shares at any concession to agree to observe a
similar restriction.

Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Underwriters of such number of shares of
Common Stock as may be mutually agreed. The price of any shares so sold shall
be the initial public offering price, less an amount not greater than the
selling concession.

The Company has granted to the U.S. Underwriters an option exercisable for
30 days after the date of this Prospectus to purchase up to an aggregate of
480,000 additional shares of Common Stock solely to cover over-allotments, if
any. If the U.S. Underwriters exercise their over-allotment option, the U.S.
Underwriters have severally agreed, subject to certain conditions, to purchase
approximately the same percentage thereof that the number of shares to be
purchased by each of them, as shown in the foregoing table, bears to the
3,200,000 shares of Common Stock offered. The Company has granted the
International Underwriters a similar option to purchase up to an aggregate of
120,000 additional shares of Common Stock.

The Company, its directors and certain of its executive officers, and their
affiliates, have agreed that during the period beginning from the date of this
Prospectus and continuing to and including the date 120 days after the date of
the Prospectus, they will not offer, sell, contract to sell or otherwise
dispose of any securities of the Company (other than pursuant to the employee
stock option plans existing, or on the conversion or exchange of convertible
or exchangeable securities outstanding, on the date of this Prospectus) which
are substantially similar to the shares of the Common Stock or which are
convertible or exchangeable into securities which are substantially similar to
the shares of Common Stock without the prior written consent of the
representatives, except for the shares of Common Stock offered in connection
with the concurrent U.S. and international offerings.

The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.

This Prospectus may be used by underwriters and dealers in connection with
offers and sales of the Common Stock, including shares initially sold in the
International Offering, to persons located in the United States.

Goldman, Sachs & Co. provided Plains, and Petrie Parkman & Co., Inc.
provided the Company, with investment banking services in connection with the
merger of Plains and the Company. Howard, Weil, Labouisse, Friedrichs
Incorporated provided the Company with an opinion that the terms of the recent
acquisitions from Zenith and GVC were fair to the Company.

Phibro Energy, a division of Salomon Inc, which is the parent company of
Salomon Brothers Inc, has engaged in swap transactions concerning natural gas
pricing with the Company. The Company does not pay Phibro or Salomon Brothers
Inc any compensation, other than its obligations pursuant to the swap
arrangement, in connection with this transaction. The Company may enter into
additional transactions with Phibro in the future.

U-2
<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFOR-
MATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

---------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 8
The Company.............................................................. 10
Use of Proceeds.......................................................... 10
Price Range of Common Stock.............................................. 11
Dividend Policy.......................................................... 11
Capitalization........................................................... 12
Selected Consolidated Financial Data..................................... 13
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 15
Business and Properties.................................................. 21
Management............................................................... 37
Beneficial Owners of Securities.......................................... 41
Description of Capital Stock............................................. 42
Legal Matters............................................................ 43
Experts.................................................................. 43
Available Information.................................................... 43
Incorporation of Certain Documents by Reference.......................... 44
Certain Definitions...................................................... 44
Index to Consolidated Financial Statements............................... F-1
Underwriting............................................................. U-1
</TABLE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

4,000,000 SHARES

BARRETT RESOURCES CORPORATION

COMMON STOCK
(PAR VALUE $0.01 PER SHARE)

---------------

[ART]

---------------

GOLDMAN, SACHS & CO.

SALOMON BROTHERS INC

HOWARD, WEIL, LABOUISSE, FRIEDRICHS
INCORPORATED

PETRIE PARKMAN & CO.

REPRESENTATIVES OF THE UNDERWRITERS

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses of the Offering described in this Registration
Statement are as follows:

<TABLE>
<S> <C>
Registration Fee..................................................... $ 37,177
NASD Filing Fee...................................................... $ 11,282
NYSE Additional Listing Fee.......................................... $ 47,800
Printing Expenses.................................................... $100,000*
Accounting Fees and Expenses......................................... $ 50,000*
Legal Fees and Expenses.............................................. $ 85,000*
Blue Sky Fees and Expenses........................................... $ 30,000*
Registrar and Transfer Agent Fee..................................... $ 10,000*
Miscellaneous........................................................ $ 48,741*
--------
Total.............................................................. $420,000*
========
</TABLE>
- --------
* Estimated

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Delaware General Corporation Law provides for indemnification by a
corporation of costs incurred by directors, employees, and agents in
connection with an action, suit, or proceeding brought by reason of their
position as a director, employee, or agent. The person being indemnified must
have acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation.

In addition to the general indemnification section, Delaware law provides
further protection for directors under Section 102(b)(7) of the General
Corporation Law of Delaware. This section was enacted in June 1986 and allows
a Delaware corporation to include in its certificate of incorporation, which
the Company has included, a provision that eliminates and limits certain
personal liability of a director for monetary damages for certain breaches of
the director's fiduciary duty of care, provided that any such provision does
not (in the words of the statute) do any of the following:

"eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under section 174 of this Title
[dealing with willful or negligent violation of the statutory provision
concerning dividends and stock purchases and redemptions], or (iv) for any
transaction from which the director derived an improper personal benefit.
No such provision shall eliminate or limit the liability of a director for
any act or omission occurring prior to the date when such provision becomes
effective. . .".

The Board of Directors is empowered to make other indemnification as
authorized by the Certificate of Incorporation, Bylaws or corporate resolution
so long as the indemnification is consistent with the Delaware General
Corporation Law. Under the Company's bylaws, the Company is required to
indemnify its directors to the full extent permitted by the Delaware General
Corporation Law, common law and any other statutory provision.

The Company also maintains directors and officers insurance that provides
protection for directors and officers of the Company against personal
liability for wrongful acts, including protection for certain matters for
which the Company may not provide indemnification, such as stockholder
derivative actions.

II-1
<PAGE>

ITEM 16. EXHIBITS.

<TABLE>
<C> <S>
1 Form of Underwriting Agreement.
2.1 Agreement And Plan Of Merger, dated as of May 2, 1995, among Barrett
Resources Corporation ("Registrant"), Barrett Energy Inc. (formerly
known as Vanilla Corporation), and Plains Petroleum Company ("Plains")
is incorporated by reference from Annex I to the Joint Proxy
Statement/Prospectus of Registrant and Plains dated June 13, 1995.
5 Opinion regarding legality.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Bearman Talesnick & Clowdus Professional Corporation
(included in the opinion regarding legality set forth in Exhibit 5).
23.3 Consent of Ryder Scott Company.
23.4 Consent of Netherland, Sewell & Associates, Inc.
99.1 Report of Ryder Scott Company.
99.2 Report of Netherland, Sewell & Associates, Inc.
</TABLE>

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering hereof.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities And Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

II-2
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF DENVER, STATE OF COLORADO, ON THE 17TH DAY OF MAY,
1996.

Barrett Resources Corporation

/s/ William J. Barrett
By: _________________________________
WILLIAM J. BARRETT
CHIEF EXECUTIVE OFFICER

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.

SIGNATURE TITLE DATE

/s/ William J. Barrett Chief Executive May 17, 1996
_____________________________________ Officer, Chairman
WILLIAM J. BARRETT Of The Board, and
Director (Principal
Executive Officer)

/s/ Paul M. Rady President, Chief May 17, 1996
_____________________________________ Operating Officer,
PAUL M. RADY and Director

/s/ A. Ralph Reed Executive Vice May 17, 1996
_____________________________________ President, and
A. RALPH REED Director

/s/ John F. Keller Executive Vice May 17, 1996
_____________________________________ President, Chief
JOHN F. KELLER Financial Officer,
Secretary, and
Director (Principal
Financial and
Accounting Officer)

/s/ C. Robert Buford Director May 17, 1996
_____________________________________
C. ROBERT BUFORD

/s/ Derrill Cody Director May 17, 1996
_____________________________________
DERRILL CODY

/s/ James M. Fitzgibbons Director May 17, 1996
_____________________________________
JAMES M. FITZGIBBONS

II-3
<PAGE>

SIGNATURE TITLE DATE

Director , 1996
_____________________________________
HENNIE L.J.M. GIESKES

Director , 1996
_____________________________________
WILLIAM W. GRANT, III

/s/ James T. Rodgers Director May 17, 1996
_____________________________________
JAMES T. RODGERS

/s/ Philippe S.E. Schreiber Director May 17, 1996
_____________________________________
PHILIPPE S.E. SCHREIBER

/s/ Harry S. Welch Director May 17, 1996
_____________________________________
HARRY S. WELCH

II-4

<PAGE>

Draft of May 16, 1996

Barrett Resources Corporation

Common Stock,

$.01 par value

Underwriting Agreement

(U.S. Version)

__________, 1996

Goldman, Sachs & Co.,
Salomon Brothers Inc,
Howard, Weil, Labouisse, Friedrichs Incorporated,
Petrie Parkman & Co., Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004

Ladies and Gentlemen:

Barrett Resources Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 3,200,000 shares (the "Firm Shares") and, at the election of the
Underwriters, up to 480,000 additional shares (the "Optional Shares") of Common
Stock, $.01 par value ("Stock") of the Company (the Firm Shares and the Optional
Shares that the Underwriters elect to purchase pursuant to Section 2 hereof
being collectively called the "Shares").

It is understood and agreed to by all parties that the Company is
concurrently entering into an agreement (the "International Underwriting
Agreement") providing for the sale by the Company of up to a total of 920,000
shares of Stock (the "International Shares"), including the overallotment option
thereunder, through arrangements with certain underwriters outside the United
States (the "International Underwriters"), for whom Goldman Sachs International,
Salomon Brothers International Limited, Howard, Weil, Labouisse, Friedrichs
Incorporated and Petrie Parkman & Co., Inc. are acting as lead managers.
Anything herein or therein to the contrary notwithstanding, the respective
closings under this Agreement and the International Agreement are hereby
expressly made conditional on one another. The Underwriters hereunder and the
International Underwriters are simultaneously entering into an Agreement between
U.S. and International Underwriting Syndicates (the "Agreement between
Syndicates") which provides, among other things, for the transfer of shares of
Stock between the two syndicates.
<PAGE>

Two forms of prospectus are to be used in connection with the offering
and sale of shares of Stock contemplated by the foregoing, one relating to the
Shares hereunder and the other relating to the International Shares. The latter
form of prospectus will be identical to the former except for certain substitute
pages as mentioned below. Although the International Shares will be registered
under the registration statement mentioned below, the form of prospectus
relating to the International Shares will not be included in such registration
statement. Except as used in Sections 2, 3, 4, 9 and 11 herein, and except as
the context may otherwise require, references hereinafter to the Shares shall
include all the shares of Stock which may be sold pursuant to either this
Agreement or the International Underwriting Agreement. References herein to any
prospectus (other than the Preliminary U.S. Prospectus, the Preliminary
International Prospectus, the U.S. Prospectus or the International Prospectus,
as such terms are defined below), whether in preliminary or final form, and
whether as amended or supplemented, shall include both the U.S. and the
international versions thereof. References herein to any Preliminary Prospectus
shall include each Preliminary U.S. Prospectus and each Preliminary
International Prospectus, and references herein to the Prospectus shall include
the U.S. Prospectus and the International Prospectus.

1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:

(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has filed a registration statement on
Form S-3 (File No. 333-....) (the "Initial Registration Statement") in respect
of the Shares with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits thereto
but including all documents incorporated by reference in the prospectus
contained therein, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration statement,
if any, increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Act, which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore been
filed with the Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Preliminary U.S. Prospectus";
the various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and including (i)
the information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective and (ii) the
documents incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became

-2-
<PAGE>

or hereafter becomes effective, each as amended at the time such part of the
Initial Registration Statement became effective, are hereinafter collectively
called the "Registration Statement"; such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, is hereinafter called the "U.S.
Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as the
case may be; and any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date
of the Initial Registration Statement that is incorporated by reference in the
Registration Statement);

(b) No order preventing or suspending the use of any Preliminary U.S.
Prospectus has been issued by the Commission, and each Preliminary U.S.
Prospectus, at the time of filing thereof, conformed in all material respects to
the requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;

(c) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman, Sachs &
Co. expressly for use therein;

(d) The Registration Statement conforms, and the U.S. Prospectus and any
further amendments or supplements to the Registration Statement or the U.S.
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission

-3-
<PAGE>

thereunder and do not and will not, as of the applicable effective date as to
the Registration Statement and any amendment thereto and as of the applicable
filing date as to the U.S. Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter through
Goldman, Sachs & Co. expressly for use therein;

(e) The Company has prepared a preliminary prospectus dated May ___, 1996
(the "Preliminary International Prospectus"), and will prepare a final
prospectus to be dated the same date as the U.S. Prospectus (the "International
Prospectus"), for use in connection with the offering of Shares outside the
United States and, accordingly, neither the Preliminary International Prospectus
nor the International Prospectus, nor any amendment or supplement thereto, has
been or will be filed with the Commission or included in the Registration
Statement; the Preliminary International Prospectus is substantially identical
to the Preliminary U.S. Prospectus dated the same date, and the International
Prospectus will be substantially identical to the U.S. Prospectus, except in
each case for the front and back cover pages and the sections entitled
"Underwriting", "Available Information", "Service of Process, Enforceability of
Civil Liabilities", "Prospectus Summary - The Offerings - Listings", "Share
Certificates and Transfer" and "General Information", or in such other respects
as you may have approved in the case of the Preliminary International
Prospectus, or hereafter may approve in the case of the International
Prospectus; the Preliminary International Prospectus, did not, as of its date,
and the International Prospectus and any amendment or supplement thereto will
not, as of their respective dates, contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman, Sachs &
Co. expressly for use therein;

(f) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital stock
or any exercisable rights for the Company's Common Stock (other than for
issuances of the Company's Common Stock under Company employee benefit plans and
issuances pursuant to existing conversion rights, each subsequent to the date
thereof) or any material change in the equity investments of the Company or any
increase in the long-term debt of the Company or any of its subsidiaries in
excess of $_________________ or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus;

-4-
<PAGE>

(g) The Company and its subsidiaries have legal, valid and defensible
title to substantially all of the interests in oil and gas properties underlying
the Company's estimates of its net proved reserves contained in the Prospectus
and to substantially all other real and personal property reflected on the
Company's most recent balance sheet contained in the Prospectus as assets owned
by them, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or would not have a material
adverse effect on the Company and its subsidiaries taken as a whole; and any
other real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases,
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries; and the Company's interests in its oil and gas properties are not
subject to any arrangements that do not conform to standard industry practice
except as disclosed in the Prospectus;

(h) Each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
or is subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction; and each subsidiary of the Company has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation;

(i) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Stock contained in the Prospectus; and all
of the issued shares of capital stock of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;

(j) The Shares have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein and in the International
Underwriting Agreement, will be duly and validly issued and fully paid and non-
assessable and will conform to the description of the Stock contained in the
Prospectus;

(k) The issue and sale of the Shares by the Company hereunder and under
the International Underwriting Agreement and the compliance by the Company with
all of the provisions of this Agreement and the International Underwriting
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such action

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<PAGE>

result in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Shares or
the consummation by the Company of the transactions contemplated by this
Agreement and the International Underwriting Agreement, except the registration
under the Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters and the International Underwriters;

(l) Neither the Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or By-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound;

(m) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a summary
of the terms of the Stock, and under the caption "Underwriting", insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair;

(n) Other than as set forth or contemplated in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of its
subsidiaries is subject, which if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries; and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;

(o) The Company is not and, after giving effect to the offering and sale
of the Shares, will not be an "investment company" or an entity "controlled" by
an "investment company", as such terms are defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act");

(p) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes; and

(q) Arthur Andersen LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder.

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<PAGE>

(r) The financial statements (including the related notes and supporting
schedules) filed as part of the Registration Statement or included or
incorporated by reference in the Prospectus present fairly the financial
condition and results of operations of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods involved.

(s) The Company and its subsidiaries have obtained all material licenses,
permits and other governmental or regulatory authorizations required for the
conduct or operation of their respective businesses and such material licenses,
permits or authorizations are in full force and effect, and the Company and its
subsidiaries are presently conducting their respective businesses in substantial
compliance with all applicable laws, the violation of which would have a
material adverse effect on the condition (financial or other), earnings,
business or properties of the Company and its subsidiaries taken as a whole.

(t) Other than violations that are not reasonably expected to have in the
aggregate a material adverse effect on the Company and its subsidiaries taken as
a whole, and to the best knowledge of the Company, the assets and business of
the Company and the subsidiaries have been operated in compliance with all
applicable Environmental Laws (as defined below); without limitation of the
foregoing, there is at the date hereof no pending litigation or action or, to
the best knowledge of the Company, any threatened litigation or action relating
to any violation of any Environmental Laws with respect to the assets or
business of the Company or its subsidiaries, other than violations, actions,
suits, investigations, inquiries or proceedings that are not reasonably expected
to have, in the aggregate, a material adverse effect on the condition (financial
or other), earnings, business or properties of the Company and its subsidiaries
taken as a whole; and, as of the date hereof, all material notices, permits or
similar documents relating to the operation of the assets or business, of the
Company and each of the subsidiaries including, without limitation, treatment,
storage, disposal or release of a hazardous substance or solid waste in the
environment, have been duly obtained or filed; as used in this Agreement, the
term "Environmental Laws" means any and all laws, statutes, ordinances, rules,
regulations, orders, judicial or arbitrated decisions, or determinations of any
governmental authority or court in effect and pertaining to properties utilized
or under the control of the Company, including, without limitation, the Clean
Air Act, as amended, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended ("CERCLA"), the Federal Water Pollution Control Act,
as amended, the Resource Conservation and Recovery Act, as amended ("RCRA"), the
Toxic Substances Control Act, as amended, and comparable state and local laws
and other safety, health and environmental conservation or protection laws; the
term "release" has the meaning specified in the CERCLA, and the term "disposal"
(or "disposed") has the meaning specified in the RCRA.

(u) The information underlying the estimates of reserves of the Company
and its subsidiaries, as described in the Prospectus and the documents
incorporated by reference therein, was, at the time such estimates were made,
complete and accurate in all material respects; other than normal production of
the reserves and intervening spot market product price fluctuations described

-7-
<PAGE>

in the Prospectus, the Company is not aware of any facts or circumstances that
are presently existing or reasonably likely to occur that would result in a
materially adverse change in the reserves, or the present value of future net
cash flows therefrom, as described in the Prospectus and the documents
incorporated by reference therein; estimates of such reserves and present values
comply in all material respects to the applicable requirements of Regulation S-X
and Industry Guide 2 under the Act.

2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $........................, the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto and
(b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the purchase price
per share set forth in clause (a) of this Section 2, that portion of the number
of Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction, the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder.

The Company hereby grants to the Underwriters the right to purchase at
their election up to 600,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.

3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.

4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company, shall be delivered by or on behalf of the Company to
Goldman, Sachs & Co., through the facilities of the Depository Trust Company,
("DTC") for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by certified or official bank
check or checks, payable to the order of the Company in immediately available
funds. The Company will cause the certificates

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<PAGE>

representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Shares, 9:30 a.m., New York City time, on ............., 1996 or
such other time and date as Goldman, Sachs & Co. and the Company may agree upon
in writing, and, with respect to the Optional Shares, 9:30 a.m., New York time,
on the date specified by Goldman, Sachs & Co. in the written notice given by
Goldman, Sachs & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Goldman, Sachs & Co. and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".

(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the cross
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(i) hereof, will be delivered at the offices
of Andrews & Kurth L.L.P., 425 Lexington Avenue, New York, N.Y. 10017 (the
"Closing Location"), and the Shares will be delivered at the Designated Office,
all at such Time of Delivery. A meeting will be held at the Closing Location at
.......p.m., New York City time, on the New York Business Day next preceding
such Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.

5. The Company agrees with each of the Underwriters:

(a) To prepare each of the U.S. Prospectus and the International
Prospectus in a form approved by you and to file the U.S. Prospectus pursuant to
Rule 424(b) under the Act not later than the Commission's close of business on
the second business day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Act; to make no further amendment or any supplement to the Registration
Statement or Prospectus prior to the last Time of Delivery which shall be
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed (or, in the case of the
International Prospectus, prepared) and to furnish you with copies thereof; to
file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares; to advise you, promptly
after it receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or prospectus, of the suspension of the qualification of the Shares
for offering or sale in

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<PAGE>

any jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or prospectus or
suspending any such qualification, promptly to use its best efforts to obtain
the withdrawal of such order;

(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;

(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request, and, if the delivery of a prospectus is required
at any time prior to the expiration of nine months after the time of issue of
the Prospectus in connection with the offering or sale of the Shares and if at
such time any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such period to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange Act, to notify you
and upon your request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as you
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission or
effect such compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time nine months
or more after the time of issue of the Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as many
copies as you may request of an amended or supplemented Prospectus complying
with Section 10(a)(3) of the Act;

(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
thereunder (including, at the option of the Company, Rule 158);

(e) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder and
under the International Underwriting Agreement, any securities of the Company
that are substantially similar to the Shares, including but not limited to any

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<PAGE>

securities that are convertible into or exchangeable for, or that represent the
right to receive, Stock or any such substantially similar securities (other than
pursuant to employee stock option plans existing on, or upon the conversion or
exchange of convertible or exchangeable securities outstanding as of, the date
of this Agreement), without your prior written consent;

(f) To furnish to its stockholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail;

(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);

(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement and the International Underwriting Agreement in the
manner specified in the Prospectus under the caption "Use of Proceeds"; and

(i) To list the Shares on the New York Stock Exchange ("NYSE").

(j) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act.

6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the International Underwriting
Agreement, the Agreement between Syndicates, the Selling Agreement, the Blue Sky

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<PAGE>

Memorandum, closing documents (including compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on the NYSE;
(v) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Shares; (vi) the cost of preparing stock certificates; (vii) the cost and
charges of any transfer agent or registrar; and (viii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.

7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:

(a) The U.S. Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to your reasonable satisfaction; if the Company has elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have become effective
by 10:00 P.M., Washington, D.C. time, on the date of this Agreement;

(b) Andrews & Kurth L.L.P., counsel for the Underwriters, shall have
furnished to you such opinion or opinions (a draft of such opinion is attached
as Annex 11(a) hereto), dated such Time of Delivery, with respect to the matters
covered in paragraphs (i), (ii), (vii), (xi) and (xiv) of subsection (d) below
as well as such other related matters as you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;

(c) Eugene A. Lang, Jr., General Counsel of the Company, shall have
furnished to you his written opinion (a draft of such opinion is attached as
Annex 11(b) hereto), dated at such Time of Delivery, in form and substance
satisfactory to you to the effect that:

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<PAGE>

(i) Neither the Company nor any subsidiary of the Company is not in
violation of its Certificate of Incorporation or By-laws or in default in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a
party or by which it is a party or by which it or any of its properties may
be bound.

(d) Bearman Talesnick & Clowdus Professional Corporation, counsel for the
Company, shall have furnished to you their written opinion (a draft of such
opinion is attached as Annex 11(c) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:

(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;

(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
(including the Shares being delivered at such Time of Delivery) have been
duly and validly authorized and issued and are fully paid and
nonassessable; the Shares conform to the description of the Stock contained
in the Prospectus; based upon information provided by NYSE and assuming the
Stock is sold in the manner described in the Registration Statement, the
Stock is duly authorized for trading through the NYSE; the certificates for
the Stock is in valid and sufficient form; and the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Stock;

(iii) The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no material
liability or disability by reason of failure to be so qualified in any such
jurisdiction (such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel and in respect of matters of
fact upon certificates of officers of the Company, provided that such
counsel shall state that they believe that both you and they are justified
in relying upon such opinions and certificates);

(iv) Each subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued shares of capital
stock of each such subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims (such counsel being entitled to rely in respect of the

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<PAGE>

opinion in this clause upon opinions of local counsel and in respect to
matters of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions and
certificates);

(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse effect on
the current or future consolidated financial position, stockholders' equity
or results of operations of the Company and its subsidiaries; and, to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;

(vi) This Agreement and the International Underwriting Agreement
have been duly authorized, executed and delivered by the Company;

(vii) The issue and sale of the Shares being delivered at such Time
of Delivery by the Company and the compliance by the Company with all of
the provisions of this Agreement and the International Underwriting
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such action result in any violation
of the provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties;

(viii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement and the
International Underwriting Agreement, except the registration under the Act
of the Shares, and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the
Underwriters and the International Underwriters;

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<PAGE>

(ix) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock, and under the caption "Underwriting",
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair;

(x) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act; and

(xi) The documents incorporated by reference in the Prospectus or
any further amendment or supplement thereto made by the Company prior to
such Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder; and they have no reason to believe that any
of such documents, when such documents became effective or were so filed,
as the case may be, contained, in the case of a registration statement
which became effective under the Act, an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the case of
other documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such documents
were so filed, not misleading; and

(xii) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Act and the
rules and regulations thereunder, although they do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (xi) of this Section 7(c); they
have no reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior to
such Time of Delivery (other than the financial statements and related
statements and related schedules therein, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that, as of its date, the
Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial statements
and

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<PAGE>

related schedules therein, as to which such counsel need express
no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading or that, as of such Time of
Delivery, either the Registration Statement or the Prospectus or
any further amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement of
a material fact or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; and they do not know
of any amendment to the Registration Statement required to be
filed or of any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement
or required to be incorporated by reference into the Prospectus
or required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or
described as required;

(xiii) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement.

In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction outside the
United States.

(e) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Arthur Andersen LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex 1(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex 1(b) hereto);

(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus, and
(ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or any
exercisable rights for the Company's Common Stock (other than for issuances of
the Company's Common Stock under Company employee benefit plans and issuances
pursuant to existing conversion rights, each subsequent to the date thereof) or
any material change in the equity investments of the Company or any increase in
the long-term debt of the Company or any of its subsidiaries in excess of
$_______________ or any change, or any development involving a prospective

-16-
<PAGE>

change, in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in Clause (i) or (ii), is in the
judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;

(g) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities;

(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on NYSE; (iii) a
general moratorium on commercial banking activities declared by either Federal
or New York State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
Clause (iv) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;

(i) The Shares to be sold at such Time of Delivery shall have been duly
listed, for quotation on NYSE; and

(j) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement;

(k) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as you may reasonably request.

8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the

-17-
<PAGE>

Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through Goldman, Sachs & Co.
expressly for use therein.

(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Goldman, Sachs & Co.
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.

(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or

-18-
<PAGE>

contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.

(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the
Shares purchased under this Agreement, in each case as set forth in the table on
the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent

-19-
<PAGE>

misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.

(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.

9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company shall be entitled to a further period of thirty-
six hours within which to procure another party or other parties satisfactory to
you to purchase such Shares on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Shares, or the Company notifies you that it has so
arranged for the purchase of such Shares, you or the Company shall have the
right to postpone such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.

(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.

(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company

-20-
<PAGE>

shall not exercise the right described in subsection (b) above to require non-
defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Company to
sell the Optional Shares) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.

10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.

11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, any Shares
are not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Shares not so delivered, but the Company shall then be
under no further liability to any Underwriter in respect of the Shares not so
delivered except as provided in Sections 6 and 8 hereof.

12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.

All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof.

-21-
<PAGE>

13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.

14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.

15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.

16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.

-22-
<PAGE>

If the foregoing is in accordance with your understanding, please sign and
return to us seven (7) counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters (U.S. Version), the form of which shall be
submitted to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.

Very truly yours,

BARRETT RESOURCES
CORPORATION

By:
---------------------------------
Name:
Title:

Accepted as of the date hereof:

Goldman, Sachs & Co.
Salomon Brothers Inc
Howard, Weil, Labouisse, Friedrichs
Incorporated
Petrie Parkman & Co., Inc.

By:
------------------------------------
(Goldman, Sachs & Co.)

By:
------------------------------------
Name:
Title:

-23-
<PAGE>

SCHEDULE I

<TABLE>
<CAPTION>
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
---------- --------------- ------------------
<S> <C> <C>
Goldman, Sachs & Co.
Salomon Brothers Inc
Howard, Weil, Labouisse Friedrichs Incorporated
Petrie Parkman & Co., Inc.
[Names of other Underwriters]

--------------- ------------------
Total
=============== ==================
</TABLE>

-24-
<PAGE>

ANNEX I

[Insert appropriate form of
non-shelf comfort letter]

-25-

<PAGE>

May 17, 1996

U.S. Securities And Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Gentlemen and Ladies:

We have acted as counsel for Barrett Resources Corporation (the "Company")
in connection with the registration under the Securities Act Of 1933, as
amended, of 4,600,000 shares of the Company's $ .01 par value common stock (the
"Common Stock") on Form S-3.

We have examined the Company's Certificate Of Incorporation, as amended,
its bylaws, as amended, and the record of its corporate proceedings with respect
to the registration described above. In addition, we have examined such other
certificates, agreements, documents and papers, and we have made such other
inquires and investigations of law as we have deemed appropriate and necessary
in order to express the opinion set forth in this letter. In our examinations,
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, photostatic, or conformed copies and the
authenticity of the original of all such latter documents. In addition, as to
certain matters we have relied upon certificates and advice from various state
authorities and public officials, and we have assumed the accuracy of the
material and the factual matters contained therein.

Subject to the foregoing and on the basis of the aforementioned
examinations and investigations, it is our opinion that the 4,600,000 shares of
Common Stock the sale of which is being registered by the Company will be, if
and when sold and delivered as described in the Company's Registration Statement
on Form S-3 (the "Registration Statement"), legally issued, fully paid and
nonassessable shares of the Company's Common Stock.

We hereby consent (i) to be named in the Registration Station, and in the
prospectus that constitutes a part thereof, as the attorneys passing upon the
validity of the issuance of the Common Stock on behalf of the Company and (ii)
to the filing of this opinion as an Exhibit to the Company's Registration
Statement.
<PAGE>

U.S. Securities And Exchange Commission
May 17, 1996
Page 2.

This opinion is to be used solely for the purpose of the registration of
the Common Stock and may not be used for any other purpose.

Very truly yours,

/s/Bearman Talesnick & Clowdus
Professional Corporation

BEARMAN TALESNICK & CLOWDUS
Professional Corporation

<PAGE>

CONSENT OF ARTHUR ANDERSEN LLP

As independent public accountants, we hereby consent to the use of our
report dated March 1, 1996 in this Registration Statement (Form S-3) and
related Prospectus of Barrett Resources Corporation for the registration of
4,600,000 shares of its common stock and to all references to our Firm
included in this Registration Statement.

We also consent to the incorporation by reference therein of our report with
respect to the financial statements of Barrett Resources Corporation for the
years ended December 31, 1995, 1994 and 1993 included in the Annual Report
(Form 10-K) for 1995 incorporated by reference.

Arthur Andersen LLP

Denver, Colorado
May 17, 1996

<PAGE>

CONSENT OF RYDER SCOTT COMPANY

We hereby consent to the references to Ryder Scott Company Petroleum
Engineers as experts in the field of petroleum engineering in this
Registration Statement (Form S-3) and related Prospectus of Barrett Resources
Corporation for the registration of 4,600,000 shares of its common stock and
to all references to our Firm included in this Registration Statement.

Very truly yours,

Ryder Scott Company Petroleum
Engineers

Denver, Colorado
May 17, 1996

<PAGE>

CONSENT OF NETHERLAND, SEWELL & ASSOCIATES, INC.

We hereby consent to the references to Netherland, Sewell & Associates, Inc.
as experts in the field of petroleum engineering in the Registration Statement
(Form S-3) and related Prospectus of Barrett Resources Corporation for the
registration of 4,600,000 shares of its common stock and to all references to
our Firm included in this Registration Statement.

Very truly yours,

Netherland, Sewell & Associates,
Inc.

Dallas, Texas
May 16, 1996

<PAGE>

[LETTERHEAD OF RYDER SCOTT COMPANY APPEARS HERE]

January 30, 1996

Barrett Resources Corporation
1515 Arapahoe Street
Tower 3, Suite 1000
Denver, Colorado 80202

Gentlemen:

Pursuant to your request, we have reviewed your estimates of the net
proved reserves attributable to the interests of Barrett Resources Corporation
(referred to herein as the "Company") as of December 31, 1995. This review
consisted of approximately 900 wells, and reserves attributed to certain behind
pipe zones and undeveloped locations which were evaluated by the reservoir
engineering staff of Barrett Resources Corporation. The subject properties are
located in the States of Arkansas, Colorado, New Mexico, North Dakota, Oklahoma,
Texas and Wyoming. Based on your reserve estimates, the proved net reserves as
of December 31, 1995 are presented below.

Reviewed
Proved Net Reserves
PREPARED BY BARRETT RESOURCES CORPORATION
As of December 31, 1995
-----------------------------------------
LIQUID, BARRELS GAS, MMCF
--------------- ---------
Developed 1,283,299 157,988

Undeveloped 192,694 87,275
--------- -------
Total Proved 1,475,993 245,263

In general, it is our opinion that the methods and techniques used in
preparing your report are in accordance with generally accepted procedures for
the determination of reserves. Further, in our judgement, there was no evidence
of bias in the application of the methods and techniques for estimating proved
reserves, and that the total proved net reserves estimated would be within 10
percent of those estimated by Ryder Scott Company. However, on a well by well
comparison, differences of greater than 10 percent may exist.

Total proved developed reserves in the Grand Valley-Rulison Field Area,
Garfield County, Colorado and the North Waltman Area in Natrona County, Wyoming
have established significant proved undeveloped reserves. Because of the direct
relationship between quantities of proved undeveloped reserves and development
plans, we have included in the proved undeveloped category only reserves
assigned to undeveloped locations that we have been assured will definitely be
drilled. As with all

<PAGE>

Barrett Resources Corporation
January 30, 1996
Page 2

reserves estimates, future development and performance data, as well as changes
in the market prices of oil, condensate and gas may necessitate significant
revisions in the estimates of reserves prepared at a future date for these wells
and undeveloped locations.

The proved reserves presented in your report comply with the Securities
and Exchange Commission's Regulation S-X Part 210.4-10(a) as clarified by the
Commission's Staff Accounting Bulletin No. 40, and are based on the following
definitions and criteria:

Proved reserves of crude oil, condensate, natural gas, or natural gas
---------------
liquids are estimated quantities that geological and engineering data
demonstrate with reasonable certainty to be recoverable in the future from
known reservoirs under existing conditions. Reservoirs are considered
proved if economic producibility is supported by actual production or
formation tests. In certain instances, proved reserves may be assigned on
the basis of a combination of core analysis and electrical and other type
logs which indicate the reservoirs are analogous to reservoirs in the same
field which are producing or have demonstrated the ability to produce on a
formation test. The area of a reservoir considered proved includes (1)
that portion delineated by drilling and defined by fluid contacts, if any,
and (2) the adjoining portions not yet drilled that can be reasonably
judged as economically productive on the basis of available geological and
engineering data. In the absence of data on fluid contacts, the lowest
known structural occurrence of hydrocarbons controls the lower proved limit
of the reservoir. Proved reserves are estimates of hydrocarbons to be
recovered from a given date forward. They may be revised as hydrocarbons
are produced and additional data become available. Proved natural gas
reserves consist of non-associated, associated and dissolved gas. An
appropriate reduction in gas reserves has been made for the expected
removal of natural gas liquids, for lease and plant fuel, and for the
exclusion of non-hydrocarbon gases if they occur in significant quantities
and are removed prior to sale. Reserves that can be produced economically
through the application of established improved recovery techniques are
included in the proved classification when these qualifications are met:
(1) successful testing by a pilot project or the operation of an installed
program in that reservoir or one in the immediate area with similar rock
and fluid properties provides support for the engineering analysis on which
the project or program was based, and (2) it is reasonably certain the
project will proceed. Reserves to be recovered by improved recovery
techniques that have yet to be established through repeated economically
successful applications are included in the proved category only after
successful testing by a pilot project or after the operation of an
installed program in the reservoir provides support for the engineering
analysis on which the project or program was based. Improved recovery
includes all methods for supplementing natural reservoir forces and energy,
or otherwise increasing ultimate recovery from a reservoir, including (1)
pressure maintenance, (2) cycling, and (3) secondary recovery in its
original sense. Improved recovery also includes the enhanced recovery
methods of thermal, chemical flooding, and the use

<PAGE>

Barrett Resources Corporation
January 30, 1996
Page 3

of miscible and immiscible displacement fluids. Estimates of proved reserves do
not include crude oil, condensate, natural gas, or natural gas liquids being
held in underground storage. Depending on the status of development, these
proved reserves are further subdivided into:

(i) "developed reserves" which are those proved reserves reasonably
expected to be recovered through existing wells with existing equipment
and operating methods, including (a) "developed producing reserves"
which are those proved developed reserves reasonably expected to be
produced from existing completion intervals now open for production in
existing wells, and (b) "developed non-producing reserves" which are
those proved developed reserves which exist behind the casing of
existing wells which are reasonably expected to be produced through
these wells in the predictable future where the cost of making such
hydrocarbons available for production should be relatively small
compared to the cost of a new well; and

(ii) "undeveloped reserves" which are those proved reserves reasonably
expected to be recovered from new wells on undrilled acreage, from
existing wells where a relatively large expenditure is required and from
acreage for which an application of fluid injection or other improved
recovery technique is contemplated where the technique has been proved
effective by actual tests in the area in the same reservoir or one with
similar rock and fluid properties. Reserves from undrilled acreage are
limited to those drilling units offsetting productive units that are
reasonably certain of production when drilled. Proved reserves for
other undrilled units are included only where it can be demonstrated
with reasonable certainty that there is continuity of production from
the existing productive formation.

The Company has interests in certain tracts which have substantial
additional hydrocarbon quantities which cannot be classified as proved and
consequently are not included herein. The Company has active exploratory and
development drilling programs which in all likelihood will result in the
reclassification of significant additional quantities to the proved category.

Our reserve estimates are based upon a detailed study of the properties
in which the Company has interests; however, we have not made any field
examination of the properties. The Company informed us that it has furnished us
all of the accounts, records, production data, geological and engineering data
and reports and other data as were required for our investigation. The
ownership interests, prices, lease operating and developing costs, and other
factual data furnished to us in connection with our investigation were accepted
as represented.

<PAGE>

Barrett Resources Corporation
January 30, 1996
Page 4

Neither Ryder Scott Company nor any of its employees has any interest in
the subject properties and neither the employment to make this study nor the
compensation is contingent on our estimates of reserves and future cash inflows
for the subject properties.

Very truly yours,

RYDER SCOTT COMPANY
PETROLEUM ENGINEERS

/s/ GARY KRIEGER, P.E.

Gary Krieger, P. E.
Vice President

GK:clb

APPROVED:

/s/ LARRY T. NELMS

Larry T. Nelms, P. E.
Senior Vice President

<PAGE>

[LETTERHEAD OF NETHERLAND, SEWELL & ASSOCIATES APPEARS HERE]

February 1, 1996

Mr. A. Ralph Reed
Plains Petroleum Operating Company
Tower 3, Suite 1000
1515 Arapahoe Street
Denver, Colorado 80202

Dear Mr. Reed:

In accordance with your request, we have audited the estimates prepared
by Plains Petroleum Operating Company (Plains), as of December 31, 1995, of the
proved reserves and future net revenue to the Plains interest in certain oil and
gas properties. These estimates were prepared using constant prices and costs in
accordance with the guidelines of the Securities and Exchange Commission (SEC).
The following table sets forth Plains' estimates of the proved reserves and
future net revenue, as of December 31, 1995, for the audited properties:

Net Reserves Future Net Revenue (M$)
--------------------- -------------------------
Oil Gas Present Worth
(MBBLS) (MMCF) Total at 10%
------- --------- --------- -------------
Proved Developed
Producing 8,717.9 258,538.4 374,435.3 211,589.5
Non-Producing 1,667.9 3,144.9 26,147.7 18,280.4
Proved Undeveloped 1,104.8 6,584.7 16,419.8 10,828.2
-------- --------- --------- ---------
Total Proved 11,490.6 268,268.0 417,002.8 240,698.1
Proved Developed
Producing CO//2// 0.0 204.2 33.4 26.5

The oil reserves shown include crude oil and condensate. Oil volumes are
expressed in barrels which are equivalent to 42 United States gallons. Gas
volumes are expressed in thousands of standard cubic feet (MCF) at the contract
temperature and pressure bases.

When compared on a lease-by-lease basis, some estimates of Plains are
greater and some are lesser than the estimates of Netherland, Sewell &
Associates, Inc.; however, in our opinion, the estimates of Plains' net proved
oil and gas reserves and future net revenue, as shown herein and in certain
computer printouts on file in our office, are in the aggregate reasonable and
have been prepared in accordance with generally accepted petroleum engineering
and evaluation principles. These principles are set forth in the Standards
Pertaining to the Estimating and Auditing of Oil and Gas Reserve Information
promulgated by the Society of Petroleum Engineers. We are satisfied with the
methods and procedures utilized by Plains in preparing the December 31, 1995
reserve and revenue estimates and, with consideration given to the variations on
a lease-by-lease

<PAGE>

basis as noted above, we saw nothing of an unusual nature that would cause us to
take exception with the estimates, in the aggregate, prepared by Plains.

The estimated net reserves and future net revenue shown herein are for
total proved reserves which include proved developed producing, proved developed
non-producing, and proved undeveloped hydrocarbon reserves and for proved
developed producing carbon dioxide (CO//2//) reserves. Our audit did not include
consideration of probable or possible reserves which might be established for
these properties; neither did it include consideration of undeveloped acreage
beyond those tracts for which undeveloped reserves have been estimated.

It should be understood that our above-described audit does not
constitute a complete reserve study of the Plains oil and gas properties. In our
audit, we accepted without independent verification the accuracy and
completeness of the information and data furnished by Plains with respect to
ownership interest, oil and gas production, well test data, oil and gas prices,
historical costs of operation and development, and any agreements relating to
current and future operations of the properties and sales of production.
However, if in the course of our examination something came to our attention
which brought into question the validity or sufficiency of any such information
or data, we did not rely on such information or data until we had satisfactorily
resolved our questions relating thereto or had independently verified such
information or data.

Oil prices used by Plains are based on a December 31, 1995 West Texas
Intermediate posted price of $18.00 per barrel, adjusted by lease for gravity,
transportation fees, and regional posted price differentials. Gas prices used by
Plains are based on either December 1995 regional spot market prices, adjusted
for gathering and transportation fees, or the contract prices. Lease and well
operating costs for non-operated properties include the per-well overhead
expenses allowed under joint operating agreements along with costs estimated to
be incurred at and below the district and field levels. Lease and well operating
costs for the operated properties include only direct lease and field level
costs. Oil and gas prices, along with operating costs, are held constant in
accordance with SEC guidelines. Capital costs are included as required for
workovers, new development wells, and production equipment. Plains' estimates of
future net revenue do not include any salvage value for the lease and well
equipment nor the cost of abandoning the properties.

We are independent petroleum engineers with respect to Plains Petroleum
Operating Company as provided in the Standards Pertaining to the Estimating and
Auditing of Oil and Gas Reserve Information promulgated by the Society of
Petroleum Engineers. We do not own an interest in these properties and are not
employed on a contingent basis.

Very truly yours,

/s/ FREDERIC D. SEWELL