<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER UNITS OF
KELLEY PARTNERS 1994 DEVELOPMENT DRILLING PROGRAM
PURSUANT TO THE
OFFER TO PURCHASE
OF KELLEY OIL CORPORATION
DATED NOVEMBER 28, 2000
--------------------------------------------------------------------------------
The offer will expire at noon, Houston, Texas time on December 28, 2000
(the "expiration date"). You must validly tender your units on or before the
expiration date to receive the purchase price. You may withdraw any tendered
units before the expiration date.
To tender your units, complete and sign this letter of transmittal and
return it to us at the following address. For your tender to be valid, we must
receive this letter of transmittal by noon on the expiration date. Please allow
sufficient time for delivery.
KELLEY OIL CORPORATION
Attn: Offer
601 JEFFERSON, SUITE 1100
HOUSTON, TEXAS 77002
Ladies and Gentlemen:
I have received and read your Offer to Purchase dated November 28, 2000. I
understand that the Offer to Purchase and this letter of transmittal constitute
your offer to purchase all, but not less than all, my units of Kelley Partners
1994 Development Drilling Program (the "partnership") for $0.28 in cash per
unit, and I understand and agree to all of the terms of your offer. I understand
that your acceptance of this letter will constitute a binding agreement between
me and you on the terms of your offer. I also understand that your offer is
subject to certain conditions described in the Offer to Purchase and that you
may not be required to accept my units for purchase.
I am the registered holder of the following units of the partnership, which
I refer to as "my units". I do not own any other units of the partnership.
<TABLE>
<S> <C>
Limited Partnership Units: ___________________ General Partnership Units: _________________
</TABLE>
I hereby tender to you my units in whole and not in part in exchange for
payment of the purchase price described in your offer.
Subject to your acceptance of my tender and payment of the purchase price,
I hereby sell, assign, transfer and convey to you all right, title and interest
in and to my units. I represent and warrant to you that I have full power and
authority to tender, sell, assign, transfer and convey my units to you, and that
when you accept my units for purchase you will have good and unencumbered title
to my units, free and clear of all liens, restrictions and encumbrances (except
those provided for in the limited partnership agreement of the partnership), and
that my units will not be subject to adverse claims or proxies. I will, at your
request, execute and deliver any additional documents you deem necessary or
desirable to complete the sale, assignment, transfer and conveyance to you of my
units.
<PAGE> 2
I UNDERSTAND THAT NEITHER YOU NOR THE PARTNERSHIP HAS RECOMMENDED THIS
OFFER TO ME. I HAVE MADE MY OWN DETERMINATION OF THE MERITS OF THIS OFFER BASED
SOLELY ON THE INFORMATION INCLUDED OR INCORPORATED BY REFERENCE INTO THE OFFER
TO PURCHASE, INCLUDED THE ANNEXES.
Except as stated in the Offer to Purchase under "The Offer--Withdrawal
Rights", this tender is irrevocable.
Very truly yours,
x
-----------------------------------------------
x
-----------------------------------------------
IMPORTANT INSTRUCTIONS: You, as the registered holder of the units
described in this letter must sign this letter exactly as your name appears in
our records, which is reflected on the address label of the envelope in which
you received these materials. If your units are owned of record by two or more
joint owners, each owner must sign this letter.
If you are a transferee of units by operation of law or gift as permitted
under the partnership agreement but have not yet notified the partnership of
this transfer, you should contact the partnership immediately to have that
transfer reflected on the partnership's records. Otherwise, your tender may not
be accepted.
If your address has changed from that reflected in the partnership records,
you should notify the partnership immediately to have that change reflected on
the partnership's records. We will mail the purchase price only to registered
owners at the addresses reflected in the partnership's records.
If you have additional questions, please contact us at (713) 652-5200.
