PENNECO'S developmental gas and oil wells are drilled in our Penneco Drilling Associates (PDA) partnerships, and since 1979, PDA partnerships have raised over One Hundred Eighty Three Million ($183,000,000) Dollars in partnership capital.

Penneco Oil Company has purchased over 29% of the total investment in each PDA drilling partnership and has invested an aggregate of over Fifty One Million ($51,000,000) Dollars in these partnerships. PDA drilling partnerships offer both limited partnership interests (passive income/loss), general partnership interests (active income/loss), and a unique repurchase plan that offers liquidity.

PENNECO is the general partner of 33 oil and gas limited partnerships, which have drilled approximately 763 oil and gas wells in Allegheny, Armstrong, Bradford, Cambria, Clearfield, Greene, Fayette, Indiana, Jefferson, Washington and Westmoreland Counties in Pennsylvania and Monongalia, Preston, Tucker and McDowell Counties in West Virginia. PENNECO owns an additional 79 wells and operates approximately 734 wells in Western Pennsylvania. Many of the PDA partnerships have also included up to 25% interest in deep gas wells which have been drilled in Pennsylvania, Maryland, and West Virginia.

For 2006, the average PDA gas price was $9.292/MCF.

In 1998, Penneco introduced its Penneco Royalty Income Partnerships(PRP's.) which acquire proven oil and gas working interests, royalty interests, overriding royalty interests, production payments in producing oil and gas leases, oil and natural gas pipelines, and other oil and gas related assets. Income from the PRP's is passive income.

Penneco's business objective is to locate, develop, produce and profitably market gas and oil for the benefit of its PDA drilling partnerships.

With this in mind, we invite you to review our management, mineral reserves, and other opportunities.